January 6th, 2011
Kyle council approves new county lease for Wells Fargo building

By SEAN BATURA
News Reporter

After a lively debate, Kyle City Councilmembers Tuesday night voted 4-2 to charge Hays County 85 percent more for renting the old Wells Fargo Bank building at 111 North Front Street.

The county has run many of its Precinct 2 offices serving Buda and Kyle from the building since 2007.

Councilmember Bradley Pickett, who cast one of the two dissenting votes, said that even at the increased rate of $7,500 per month, the county is getting too good of a deal at the expense of city taxpayers. Pickett favored charging the county $10,000 per month — the rate proposed by the council in early December, before the county’s recent counteroffer of $7,500.

The city bought the former Wells Fargo building for $1.5 million with borrowed funds. Even at the increased rental fee approved by the council, the debt service on the building will exceed rent revenue by $1,260 per month.

“We were not charging a sufficient amount for that building, and our citizens got stuck with the difference,” said Councilmember Jaime Sanchez. “And by going to $7,500, we’re doing the same thing.”

The county has been fruitlessly searching at least a year for another place to house its Precinct 2 justice of the peace (JP) and county commissioner offices, which are housed in the 8,098 square foot building. The county has rented the building for two years and currently pays $4,051.69 per month in rent.

Sanchez cast the other dissenting vote against charging $7,500 per month. Though she ended up siding with the majority in the end, Councilmember Diane Hervol joined Sanchez in attempting to persuade Councilmember Becky Selbera to support an increased rate of $8,760 per month — the cost of the debt service on the building. Selbera had made a motion to charge the county $7,500 per month.

Selbera said accepting the county’s counteroffer was important to maintaining a good working relationship between the two entities. Selbera said Kyle residents benefit from the presence of the county’s JP court in the building.

“We’re not bargaining here, we’re just giving them whatever they want,” objected Pickett, who opposed the county’s counteroffer and the lack of termination notice in the lease agreement.

Selbera amended her motion to include a 60-day notice termination clause in the new 12-month lease agreement, with the $7,500 per month rate.

“I do not feel that we are giving the county exactly what they want,” said Kyle Mayor Lucy Johnson. “They wanted $4,000 a month and the continuation of their sweetheart deal. That was significantly less than market rates for the last two years. And they wanted a two-year contract that gave them even further time to decide whether they were going to build a new building, and which site to build it on.”

Pickett ironically suggested that councilmembers simply give the county the building. Selbera jokingly offered to amend her motion to give the county the building.

The council approved her pre-jest motion to approve a resolution to execute the new lease agreement. The resolution does not require a second reading.