The town-owned former Ministry of Transportation (MTO) building will be put on the sales block following a decision from the town’s finance committee.

At their last meeting on March 13, the committee voted to list the property for $1.195 million with Homelife/Muskoka Real Estate Ltd.

Fire chief and interim CAO team member Steve Hernen told the committee that all local real estate companies were invited to a meeting about the building, and that two submitted marketing plans and letters of appraisal.

The fate of the building, located at 215 Main Street West, has been up in the air for months as council grappled with the best use of the property.

It was purchased in February 2001 by the municipality for $507,000.

Since that time, the space has been leased to various businesses and organizations by the municipality.

A $500,000 debenture was used to finance the purchase of the building, and about $426,000 remains, Doughty told the committee.

As part of the sales agreement, it was not eligible to be sold until 2007, when it was put in the budget to bring in $1.2 million.

The property was never declared surplus, however, as council chose to hold off on the sale until the feasibility of establishing some form of a post-secondary institution in the facility could be investigated.

Doughty told the committee that the letters of appraisal had put the value of the property at about $700,000 or $800,000.

“As more money was needed for the previous strategic plan, the cost of that building or the anticipated selling price of that building was inflated on the (town’s) books to about $1.2 million to net abut $780,000 for the municipality,” finance chair Chris Zanetti told council Monday night. “That anticipation of getting that $780,000 is far from gonna happen, I think.”

But Doughty suggested at the finance committee meeting that the listing price be put at $1.195 million because “in the commercial market the purchasers make the decisions, not based on what the listing value is.”

At the finance meeting, councillor Bill Beatty told the committee that, while Hernen’s report itself was fine to discuss in open session, disclosing appraised values of a building when they are “significantly lower” than what the town’s asking price would be is counter-productive.

“I’d say that’s probably a closed session item (when) we’re talking about property matters and we’re talking about values on those matters,” he said.

Following Beatty’s’ comments, councillor Fran Coleman replied, “If we’re looking at numbers and wanting those numbers out there (in the public realm), there was an appraisal done prior to us purchasing it at $2.2 million. So it can be worth whatever the buyer wants to pay.”

It was stated both at the March 10 council meeting and the finance committee that the MTO building has now become a financial burden on the municipality.

Earlier this year, five tenants of the building, who leased space from the town primarily for storage, were given eviction notices because of inadequate fire protection in the building.

Because of that loss of revenue, the building is now an expensive asset to run.

Hernen’s report stated that under current conditions, the building would operate with a $30,000 deficit for 2008. However Doughty suggested that number might be closer to $100,000.

Although it was widely agreed that the building should be sold, some councillors cautioned against too much optimism about the sale.

“It’s not going to solve our budget problems this year, necessarily,” said councillor Mike Greaves at the finance committee meeting. “It may take quite along time for the right purchaser to come along and buy that property.”

Councillor John Davis asked if a contingency plan should not be in place in case the building fails to sell at all.

Hernen also pointed out to the committee that the Drive Test centre has a lease for their portion of the building for about another 20 years, which would have to be a consideration of any offer to purchase.

In the meantime, Zanetti told committee that the 2008 budget has been altered to reflect a tightening up of spending at the MTO building, including shutting down heat and hydro to areas that are not being used, and doing minimal to no repairs once the last of the evicted tenants have left.