Chatham-Kent Council will be deciding whether or not to buy the former Sears building at the mall in downtown Chatham next week.
Councillors will be asked to approve an agreement to buy the old Sears building for $2.95 million from 100 King Street CK Holdings Inc. at their council meeting Monday night.
A report going to council stated the agreement would have a buy-back provision to allow 100 King Street CK Holdings Inc. to repurchase the building at the same price within 18-24 months, if the municipality decides not to proceed with redeveloping the property for municipal use, including a civic centre, a library, and a museum.
"The Municipality’s intention would be to relocate part of its municipal services to this location once refurbishment of the building is completed for this purpose by the Municipality," wrote Director of Legal Services David Taylor.
Taylor's report also noted the municipality will be retaining consultants and contractors for this work if it's approved and future reports to Council will address the design, construction, and project management of the redevelopment.
Administration believes the price tag of $2.95 million is justified even after a consultant appraised the property at only $630,000.
Staff said a third-party consultant estimated the municipality can save $11.7 million in construction costs by using the existing Sears building at the Downtown Chatham Centre.
"While the value of the land alone would not support the purchase price sought by the current owners, with the significant cost savings to construction based on the value of the existing building structure, the value of owning existing plans and drawings prepared to date, and the unique terms of this transaction including the assumption of solar lease responsibilities and long term parking rights, Administration believes that the purchase price of $2,950,000 can be supported for this transaction," the report stated.
The money would come from the Building Lifecycle Reserve, which has $6 million in it. The funds will be returned to the reserve if the deal falls through.
The target closing for the sale of the property is January 31, 2024.
Administration is also recommending not buying the parking garage and instead advising council to lease 175 parking spaces for 50 years.