If Utah County commissioners have their way, the county will be able to lease space in the old courthouse to any agency it wants.
The commissioners Wednesday, acting as the Utah County Building Authority, instructed deputy county attorney Guy Burningham to find out if a lien held on the courthouse by bond insurers would be released if the county redeemed about $1.8 million in bonds earmarked for remodeling the building. If allowed to do so, the county will redeem the money and find alternative financing to complete the remodeling project - removing any restrictions on the building's use."With this proposal our hands would no longer be tied and restricted as to who our tenants can be," Commissioner Gary Herbert said. "Economically it makes sense and functionally it makes sense."
The $1.8 million was set aside from the original $29 million in bonds used for construction of the County Administration Building and the State Regional Office Complex. When state officials decided to move the 4th District Courts into the new judicial center the county was left with an empty building.
County officials have hoped to use the money to remodel the building for use as a government and cultural center. However, because the bond is tax-exempt and because of stipulations in the bond agreement, the county is limited in who can be tenants if it uses the money to remodel the building. Most of the agencies that have approached the county about leasing space do not meet criteria established in the bond agreement.
Last month the county asked bond insurers if the money could be used for remodeling if it limited the space leased to non-governmental agencies to less than 5 percent of the total space covered by the bond. Bond insurers responded by saying any space used by non-government agencies would have to be remodeled with other money.
Commissioners now say it's time to pursue other options. County treasurer Leonard Ellis told commissioners that the county has an excellent bond rating and could likely find financing comparable to the original bond if it chooses to do so. The original tax-exempt bond was issued at an interest rate of 7 percent. Because interest rates have dropped the county could probably obtain financing at about the same rate.
The county may also be able to use about $1 million it placed in reserve when the bond was first issued. Normally, the reserve would go toward making the bond's last payment. However, the county may be able to use the reserve by buying an insurance policy on the bond.
"We have several options," Herbert said. "We may end up finding new financing or we may just pay as we go."
Meanwhile, some remodeling has already taken place. County engineer Clyde Naylor said most of the cleanup work is complete and the electrical, voice and data systems have been refurbished. The county recently approved agreements with Val Killian to assist in the remodeling process and with Advanced Concept Engineering Inc. for a mechanical study on the building. Naylor estimates the remodeling project will cost about $1.1 million.
"That gives us adequate allowances to do a quality job for our new tenants," Herbert said.
The remodeling cost does not include earthquake modifications. Naylor said it would cost about $400,000 more to do the modifications and it would only improve safety by about 5 percent. Rather than spend the additional money, the county will brace the roof's parapets to keep them from falling during an earthquake.
"They're the biggest danger anyway," Naylor said.
Prospective tenants for the old county courthouse:
- Utah County Travel Council
- Provo/Orem Chamber of Commerce
- United Way
- Offices of Rep. Bill Orton, D-Utah
- Offices of Sen. Orrin Hatch, R-Utah
- Offices of Sen. Jake Garn, R-Utah
- Utah County Justice Court
- Civil division of the Utah County sheriff's office
(County officials say an undisclosed government agency has expressed interest in leasing the entire second floor.)