FORT SMITH -- The Fort Smith Board of Directors voted Tuesday to purchase the building at 623 Garrison Ave., which the city has been renting for use as city offices.
The board last month approved an agreement to purchase the downtown property for $4 million.
According to a city memorandum, one of the conditions of the agreement was the board's approval of acceptable financing terms from participating banks. The board was presented Tuesday with a 20-year, $4 million joint-loan from Arvest Bank and First National Bank, with Arvest being the primary servicer.
The memo also stated the board could choose to forego the loan option and vote to make a cash-purchase of the building. The outright purchase of the Garrison property would save the city an estimated $2.8 million in interest over the expectancy of the loan.
Director Kevin Settle made a motion to amend the resolution to say the city would purchase the building outright with unobligated funds out of the city's 2025 general fund and final approval of the purchase would be deliberated after completion of the due diligence period of the real estate transaction.
Director Neal Martin said he wanted to see the inspection of the building -- which is part of the real estate due diligence period -- before the board approved the purchase.
A contractor has been hired and the inspection process is underway, according to the city's memo.
The building owner -- who is also the seller in the transaction -- had contracted out "the weatherization of the building and remediation of the interior moisture problem on the building's west wall at his expense."
The remediation work in the building had started and is intended to be complete before closing.
The six-story building was built in 1992, has a total of 60,146 square feet and 92 parking spaces, according to LoopNet, an online commercial real estate marketplace.
Fort Smith resident Kim Fodge said she is for the purchase of the Garrison property and believed "the board should choose to purchase the building outright for cash and save the taxpayers $2.8 million that would be incurred due to interest if we finance this over 20 years."