The minimum bid price for the 30,467-sf building was $1.275 million, just slightly over the appraised price. Open houses were held in mid-March to garner interest, says Bob McCune, the county's facilities manager. "I expected it to get bids," McCune tells GlobeSt.com. "I was in the building during the open houses and there were quite a few people asking pertinent questions and seeming interested."

Curt Arthur, the associate broker with Coldwell Banker Commercial who advised the city to sell the building, says 30 days for due diligence and another 30 days to close simply wasn't enough for someone to make an informed decision with regard to the structure. "When you have an old building in need of a lot of work, you really need to do your full due diligence to make sure it will work," Arthur tells GlobeSt.com. "It needs to be gutted and remodeled from head to toe; somebody could easily have $3 million-$4 million into it before all was said and done."

Beyond that, says Arthur, there is the current vacancy rate for class C buildings in downtown Salem, which is running at about 15% right now. "You throw in the Franklin Building and you're at 25% real quick," he says.

There was strong interest from someone interested in converting the building into a boutique hotel, akin to the Hotel Oregon in Downtown McMinnville that was bought and renovated by the McMenamin brothers. There was also interest by someone interested in remodeling the building and turning it into an office condo.

In both instances, says Arthur, the interested party wasn't confident about the building itself to forego the normal due diligence process. "The person interested in the boutique hotel said if it is eventually listed with a brokerage firm, he'd take a longer, more serious look at the building," Arthur tells GlobeSt.com

McCune's facilities staff will meet in the next couple of weeks to put together a list of options that it will present to the county commissioners with a recommendation later this month. The most likely option is to put out a request for proposals from brokerage firms interested in actively marketing the property for sale.

The building once housed the offices of the assessor, tax collector, treasurer, district attorney and other county staff. Save for some non-profit agencies that are receiving free rent, the building has been largely vacant since the county consolidated its offices last year at Courthouse Square.

The county wants to sell the property rather than pay the $1 million it would cost to renovate and lease up the structure. The commissioners are following the lead of county staff, which recommends selling the building outright because it would be too expensive to retain it for future expansion.

Instant Insights /

No Bidders for County's Franklin Building

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