Bozeman gets zero bids on City Hall

By AMANDA RICKER Chronicle Staff Writer

The city of Bozeman has extended indefinitely the window to bid on City Hall - because no offers were received as of last Friday’s deadline.

“We got zero, which has happened to us before,” City Manager Chris Kukulski said Tuesday.

It’s been one month since the city opened the bidding on the appraised $1.68 million property at 411 E. Main St. The 13,160-square-foot-building sits on a 20,625-square-foot lot.

City workers will move out of the building in mid-September, and into the renovated former city library at 220 E. Lamme St.

The city is trying to save money by selling City Hall without using a real estate agent, but some say it would be in the taxpayers’ best interest to hire a professional.

Kukulski said the city will reconsider its marketing strategy in seven to 10 days if City Hall still doesn’t draw any offers.

“Everything will be on the table - whether we should hire a real estate agent, whether we should auction the property, or whether we should continue waiting for bids,” he said.

Commercial properties like City Hall typically sit on the market for anywhere from three to six months, according to local real estate professionals.

Mike Elliott, owner and managing broker for Grubb & Ellis Montana Commercial LLC, said that on average a property like City Hall should take about three or four months to sell. Colette Lang, executive vice president of the Gallatin Association of Realtors, said it could take three to six months.

Even though City Hall has been for sale for only a month, Elliott said it might sit there “for quite sometime.”

“The feedback I’ve received from numerous sources is it is overpriced,” he said.

Elliot said a lot of buyers also just don’t like the municipal bidding, or request for proposal, process. There’s far less opportunity to negotiate than with traditional real estate sales and buyers could wind up spending a lot of time researching the property and preparing their bid for nothing.

Bozeman has succeeded in selling property without hiring a real estate agent before.

The city sold 9,775 square feet of retail space at the new downtown parking garage for $1.3 million, about $65,000 more than the appraised value per square foot, Finance Director Anna Rosenberry said earlier this month.

In that case, Kukulski said Tuesday, the city also didn’t receive any bids by the first deadline. The property did sell, though, after about a month and a half.

By law, Bozeman can’t accept less than 90 percent of the property’s appraised value.

Lang said City Hall is a valuable property because of its downtown location. Potential buyers more interested in the location might consider tearing the building down.

Elliott said the location is likely to be used as a retail or mixed-use space.

“It definitely could be a scrape,” he said. “The highest and best use for that land is not its current use.”

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