SPRINGDALE -- The City Council on Monday said it would consider the purchase of a building that sits in front of the city's airport.
Mayor Doug Sprouse presented a letter of intent to buy the Atco Rubber Products building and the land it sits on at 1403 S. Powell St. The city would make an offer to pay $2.5 million, Sprouse noted.
The council in March told Sprouse to pursue a possible purchase of the building.
A letter of intent would be the first step in drafting a formal purchase and sales agreement, reads the letter of intent as prepared by Greg Taylor, an executive broker with Griffin Company Realtors.
Taylor is handling the discussions for the city with officials from Mueller Industries in Memphis, Tenn. Mueller purchased Atco in 2018.
"I continue to think this is a very important acquisition for our city," Sprouse said.
The building sits between the Springdale Municipal Airport and Powell Street.
Sprouse has said he would like to see East Sunset Avenue extended east to South Powell Street and create a new entrance to the airport.
He noted the Springdale School District has plans to rebuild Jones Elementary School, which neighbors the airport, behind the current school building.
Patsy Christie, director of the city's Planning Department, noted new residential development is planned in the neighborhoods near the airport.
And the extension of Sunset Avenue as a major collector street was put on the city's Master Street Plan in 2017, she said.
Sprouse said the letter would not bind the city or Atco into any agreements.
The letter, once signed by both bodies, would set usable terms for negotiation of the purchase, he said.
"It gets the conversation started," Sprouse said.
The letter also would set 90 days for both sides to research and come to an agreement.
The 59,400-square-foot building and 5 acres was appraised at $2.54 million in the summer of 2021, Sprouse reported. The Washington County Assessor shows a 2021 market value assessment of $1,711,600.
The city would lease the building back to Atco at $3 a square foot for three or four years.
"But we could do all this, and they could still say no," council member Brian Powell said.
Sprouse said the city is a good financial position to buy this building.
Colby Fulfer, the mayor's chief of staff who attended the meeting via Zoom, said the undesignated portion of the city's budget currently holds about $18 million.
Council member Mark Fougerousse said city officials needed to determine if the rental income would earn the city more money on its investment than the money would earn sitting in a bank.
"I know spending for something in the future can give you heartburn, but it'd be sad not to take this opportunity when we're in a better position to do it," Sprouse said.
Sprouse said he did not know what purpose the building would serve. The Airport Commission might want to use it for hangar space or an aviation-related business, or the city might tear it down.
"I have no good answer right now," he said.
Sprouse told the council how fruitful their forward thinking has been for the city.
He reminded them of the $4 million purchase of the building that became the city's recreation center and the purchase of a building from Allen Canning Co. that now houses a mechanic's garage for the Springdale Police Department.
Discussion of the city's possible purchase of the Atco building began with Taylor calling area property owners looking for some place to build new bathrooms for the Razorback Greenway, Sprouse said.