Williamsport – Lycoming County purchased the Third Street Plaza for $13.7 million in 2007, but the building’s last assessed value was marked at just over $7 million, according to the county’s assessment office.
The 2007 purchase could be passed off as a mistake from a prior board of commissioners, but it’s one that continues to affect the county today. Third Street Plaza is one of a few properties under a microscope as the county works to determine the best way to consolidate, or sell, its excess assets.
“There’s a lot of movement, but I think there are a lot of things that need to be further thought out,” said Matthew McDermott, chief clerk for Lycoming County.
The county owns 18 separate properties including 12 buildings, four vacant land plots, and the Court Street parking lot and one golf course, according to the county assessment office.
The Third Street and Executive plazas in downtown Williamsport house a number of county departments, but in recent years a mass exodus of the commercial renters have left much of the two buildings vacant.
Third Street Plaza
Full of tenants when the six-story building was bought, Third Street Plaza now sits mostly vacant with a couple of county offices on the first and fifth floors and two commercial properties. The building’s second, fourth, and sixth floors are vacant, according to McDermott.
When the building was purchased, the intent was to eventually house more government services but, McDermott said, it is a mystery why the Third Street Plaza was purchased at a price so much higher than the assessed value.
Coming to the commissioners’ board in 2012, Commissioner Tony Mussare said he looked for an appraisal, which would have been done before the building was purchased, but couldn’t find any. Given the price it was purchased at and the assessed value, just selling the building is not as simple as it sounds, Mussare added.
“We shouldn’t be in it, but we are.” he said.
As owners of what is considered Class A office space, the county competes with the private sector for tenants.
“I don’t want to compete with private markets,” Commissioner Jack McKernan said. “We won’t undercut anybody.”
McDermott added that although this puts the county in a difficult position, he believes they have done a good job by providing market value and “making sure that we don’t undercut the rental price.”
There are a myriad of future options for the building, but nothing final, McDermott said. Options include moving the majority of the county’s department into the building, working out a deal with the City of Williamsport to lease or share space in the building, or selling the plaza and cutting their losses.
For Mussare, selling the building, even for $10 million, would be worth it to get the “milestone off our backs” and forgo the roughly $4 million in renovations and improvements the building will need in the future.
But, while getting a buyer willing to offer that amount may give McKernan occasion to pause, he added that it would mean the county would have to become a tenant in a commercial property, a prospect he is not keen on.
“We would need to be someone’s tenant,” McKernan said. “I don’t think we could sell Third Street (Plaza) and get what we want.”
McDermott also added that by law the county must sell the property at market value, and without an appraisal it still is unclear what that is. No appraisal is currently underway for the Third Street Plaza.
Still looking for other ways to consolidate, the commissioners have moved forward with selling the Executive Plaza, located about a half-block away on Pine Street. Executive Plaza includes the county commissioners’ office, fiscal services, the department of planning, and the department of human resources.
It was most recently assessed at nearly $2.8 million, but was purchased by the county in 1987 for $560,000. This building also has seen a decline in commercial tenants over the years. High rent prices are often to blame, and the commissioners concede that their aim is not to undercut the prices of the private sector so they have charged what they considered a fair market price.
An appraisal of the building has been completed, but in an effort to keep the building’s assessed value under wraps, the appraisal has remained sealed, Mussare said.
Conversations are underway with commercial realtors and brokers as the county determines how it will sell the building.
“Once the commissioners decide which path we’re going to go – as far as which type of sales process we’re going to go through for Executive Plaza – that will answer a lot of questions for Third Street Plaza,” McDermott said.
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