County business services director David Hartwig laid out the situation in a letter notifying interested buyers that the sealed bid process was out and that the building is now available on a first-come, first-served basis. "Marion County will consider any proposals and/or offers on the building," he wrote. "Time is of the essence. Proposals should be submitted without delay … ."

The minimum bid price for the auction that attracted no bidders was $1.275 million, just slightly over the appraised price. Open houses were held in mid-March to garner interest, and they did, county facilities manager Bob McCune told GlobeSt shortly after the auction deadline. "I expected it to get bids," he said. "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, told GlobeSt that the 30 days for due diligence and 30 days to close allowed by the county 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 told GlobeSt shortly after the auction. "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, said 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," said Arthur, explaining why he advised the county to sell the property rather than pay the $1 million it would cost to renovate and lease up the structure.

As for redevelopment for a non-office use, Arthur said there has been 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, Arthur said.

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 told GlobeSt.com. Neither Hartwig nor Arthur could be reached for comment Tuesday to see if anyone had approached the county since the letter was mailed out.

The Franklin 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.

Instant Insights /

County Wants Quick Sale of Franklin Building

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