The city is considering a proposal that would enable it to take ownership in 20 years of a $2.9-million building that houses offices of the Florida Department of Health and Rehabilitative Services (HRS). Under the lease-purchase plan, a not-for-profit corporation would be created to buy the building from owners Kevin T. Roberts and Thomas E. Smith, who are facing foreclosure proceedings on the building on State Road 52.
HRS would pay its rent to the city, which would pay the corporation. Holders of "certificates of participation" _ the corporation's investors _ would get 9 percent tax-free interest on their investment until the building is paid off.
The city would take ownership of the structure's clear title in April 2012.
A spokesman with William R. Hough and Co., a St. Petersburg investment firm, made the proposal to the Dade City Commission at its meeting Tuesday, and the commission voted to examine the plan.
Charles Corcoran, the company's first vice president, said the city would not be obligated to stay with the plan if the state pulls its services out of the two-story structure, which was built in April 1990.
If the state, and then the city, abandon the plan under allowable terms, ownership would revert to the corporation, which would lease or sell the building, Corcoran said.
If the state pulls out and the city wants to keep control of the building, it would have the option to use it for municipal offices or to lease it to another governmental agency and maintain its tax-free status.
Dade City commissioners liked the idea, particularly the promise of collecting up to $500,000 annually in rent once the city takes ownership in 2012.
They also remember the new building's recent history, when the city decided not to annex the property it is on because of a public outcry against the plan.
Although annexation would have meant considerable property taxes, neighbors opposed the building's construction and placement in the city's limits, saying they feared increased traffic.
The commission abandoned pursuit of annexation.
"This commission shot itself in the foot one time over this building and it seems like we've got a second chance here," said Commissioner Fred Johnson. "I don't see how the city can lose on this. It's a win-win situation."
City Manager Ben Bolan also praised the plan and said the removal of obligation from the city is a deal that shouldn't be rejected.
"You've got a situation where you've got a guaranteed tenant," he said.
"It's a . . . situation where, if the state breaks the lease, we simply don't appropriate the funds to continue the lease."
Bolan said the potential rent that would fall into the city's hands when it takes possession of the building is a major factor.
"I would love to have that kind of cash flow into the city right now with our current budget problems," he said.