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4/5/2013 6:00:00 AM
Kingman sells downtown building at a $500K loss
The Development Services building.
The Development Services building.

Doug McMurdo
Miner Staff Reporter

KINGMAN - Werner Fleischmann submitted the lone bid to purchase the former Development Services building in downtown Kingman from the city.

The City Council on Tuesday voted 7-0 to accept the bid from Fleischmann Arizona Investment Corporation, which offered $350,000.

The figure met the City Council's minimum requirement and equals the building's current appraised value.

The city purchased the building early in 2009 for its then-appraised value of about $875,000 to house Development Services.

If only one bidder would get involved, the City Council is probably pleased it was Fleischmann, who is in the middle of restoring downtown's historic Brunswick Hotel and has roughly half a dozen other downtown properties he intends to restore.

"Werner's trying to improve the downtown area and attract businesses and tourists," said Steve Wagner of ReMax Prestige Properties. "He's from Switzerland and understands the European interest in the Old West is strong."

Wagner, Fleischmann's agent, said he is uncertain what his client plans to do with the former city building located on the corner of Beale and Fourth streets - except that he's actively searching for a tenant.

Fleishmann's priority, however, is the Brunswick Hotel. He's still looking for people to run the hotel, restaurant and bar, said Wagner, and the restoration is in full swing.

While the city likely will never recoup the roughly $500,000 it lost on the building, Wagner believes changing its use from a government function to some sort of retail operation could serve a couple of purposes.

"The idea is to take buildings used for office space in the area's only real destination, Kingman's downtown and put in retail that will produce sales tax revenue for the city and attract people to downtown at the same time," said Wagner.

Wagner said Fleischmann is thinking about building a handful of condominiums on the second floor of the 8,741 square-foot building that was built in 1941 and used to be home to a JC Penney outlet.

"Hopefully, his actions will inspire some of the other downtown property owners to fix up their properties," he said.

The city moved Development Services out of the building in 2011 after the effects of the housing market crash hit home.

The city initially leased the building starting in 2006 when construction was booming and the city's Development Services department was expanding.

In 2005, more than 930 building plans were submitted to the department. By 2011, the number of plans dwindled to 35 and staff was cut in half.

The City Council hoped to lease the building to a private party to recoup its investment, but the Legislature enacted a punitive $2.51-per-square-foot property lease excise tax on publicly owned buildings leased for retail purposes.

The tax alone amounted to $22,000 annually, making it cost prohibitive to prospective businesses.

In addition to the building, the property includes a small garage and a fenced picnic area. The parking lot, according to city staff, sits on a separate parcel, but traditionally has been used with the property.

The City Council was able to sell the property without voter approval because both the building and its appraisal fell under the $500,000 statutory threshold.

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Related Stories:
• Former city building's new life: A place to party
• Kingman could lose $500K on downtown building

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Reader Comments

Posted: Friday, April 5, 2013
Article comment by: anonymous anonymous

Is this a example of fiscal republican geniuses at work? Guess they can raise taxes on the consumers in form of sales taxes, claim they are pro-tax cutting for the 2% job creators, and pretend loosing $500,000 is a example of good fiscal abilities!

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