The Vero Beach City Council has a $1.2 million offer on the table for the mid-Twentieth Century block structure that houses the downtown U.S. Post Office, plus the parking lots on either side of the building, but not everyone wants to sell it.
The council announced recently that a resolution declaring the property surplus would be on the April 17 agenda. Should a majority of the council approve, City Manager Jim O’Connor said that resolution gives city staff the power to enter into a contract for sale. He said the city may hire a closing agent, but the potential buyer has offered to cover the cost of that agent and other expenses related to the closing.
Members of the public questioned why the city would want to “lose control” of the property and what it might become down the road should the postal service ever move out, but Mayor Harry Howle is in favor of the sale for several reasons.
“The city doesn’t have the best history when it comes to being a landlord,” he said.
Right now, the city is responsible for repairing the aging building and major things could need fixing, with no money in the budget to do so.
Howle said the potential buyer has not requested any information on zoning restrictions on the property like a developer would, because Cedarhurst, N.Y.-based Nationwide Postal Management is a company that owns about 700 similar buildings in 46 states as an investment in real estate with a revenue stream from long-term leases. “This is what they do,” he said.
It’s been widely reported that the Postmaster has questioned the need for the Downtown Post Office with the fairly new post office on U.S. 1 having the capacity to serve the whole area, so it could be a good time for the city to make an exit. The postal service can get out of the lease with one year’s notice.
“If something happens with that lease, we’re going to be stuck with a property worth about $300,000,” Howle said, referring to the base value of the property without the lease income.
O’Connor said an analysis of the deal showed that the $1.2 million offered compensates the city up-front for more than a decade of $110,000-per-year rent revenue. That could be used to pay down debt or invested to accrue interest, without the cost of upkeep on the aging building and paved lot.
The city has not received any competing offers in writing since the discussion two weeks ago, but O’Connor said his office is open to proposals up to the April 17 hearing date. He said the proposals could be for more than $1.2 million, or even the same amount if the buyer offered deal points attractive to the city.
