Old Billings federal courthouse hits auction block

2013-02-06T09:37:00Z 2013-05-09T16:19:08Z Old Billings federal courthouse hits auction blockBy CLAIR JOHNSON cjohnson@billingsgazette.com The Billings Gazette

The asbestos-contaminated former James F. Battin Federal Courthouse went on the online auction block Wednesday, and within hours the downtown building got some nibbles.

William A. Morgan, a project manager for the federal General Services Administration in Fort Worth, Texas, said the agency already had received expressions of interest in the property.

The minimum bid is $1. A bidder has to provide a $45,000 refundable deposit for what the GSA has declared surplus property.

Completed in 1965, the five-story box measures 221,000 square feet on nearly an acre at 316 N. 26th St. The property also has a 56-car underground parking garage.

GSA’s listing calls the sale “a unique opportunity to acquire a significant building located in the Central Business District of Billings.”

A fact sheet on the building at GSA’s website provides notice about the asbestos, with more details to be included as part of sale information.

Asbestos contamination ultimately led to the construction of a new $80 million federal courthouse that opened last fall a block away. Another $30 million federal office building is under construction to house the remaining federal employees still working in the old courthouse.

When state and local government agencies and homeless assistance agencies all passed last year on acquiring the building, GSA decided to sell it as surplus property. Last spring, GSA said it would be conveying the property “as is, where is.”

While two Billings developers said they didn’t know how much asbestos removal would cost or what the property is worth, they saw potential for the property and hoped it would end up in the hands of locals.

Marty Connell, president of the East Billings Urban Renewal District and restorer and developer of the former Pierce Packing plant into the Kairos Center, envisions “Class A rental space” for the building.

“I would love to see local people coming together” to buy the property, remove the asbestos, upgrade and modernize the space, Connell said.

“It’s a nice building in a great part of town. I think it’s too much of gem for the city to say we’re going to let it be in someone else’s hands. That’s my controlling-freak approach to it,” he said.

Connell’s original dream of the city and county acquiring the property and converting it into a central location for local government services was “shot down,” he said. “They decided it didn’t fit them.”

Connell said Billings doesn’t have a lot of Class A office space available and it would take time for the market to absorb that much space. But done right, the building will attract people, he said.

“I have a problem with being too optimistic. We may be able to attract a company like Halliburton,” Connell said. Another possibility may be federal or state agencies looking to consolidate offices, he said.

“You got to think in the future of Billings, Montana,” Connell said.

Mike Schaer, of Computers Unlimited, who has spent more than 30 years transforming Montana Avenue into a popular area with restaurants and art galleries, thinks the asbestos issue will result in the GSA practically giving away the property.

Tearing the building down would probably be easier than trying to work on it, Schaer said.

But if someone removes the asbestos, Schaer suggested apartment housing for the building’s second life.

“That would be fantastic. I think the best use would be apartments. The next-best use would be a parking lot. I think there’s plenty of commercial space available downtown now,” he said.

“If it were closer to Montana Avenue, I would be more interested,” Schaer said.

GSA has not yet set an end date for the bidding.

Sally Mayberry, GSA spokeswoman in Denver, said the agency typically has a “soft close” or “inactivity period” beginning in the last 24-hour period before a preset sale closing date.

GSA will announce when the auction is closing when “sufficient marketing efforts have been met” and potential bidders have had a chance to inspect the property, Mayberry said. The notice will be posted on GSA’s sale website two to three weeks before closing. The sale will end after the inactivity period has passed without any bids being placed.

That inactivity period could be less than 24 hours and GSA encourages bidders to pay close attention to the countdown clock on at www.realestatesales.gov.

Mayberry said GSA does not share what it considers to be the fair market value of the building but encourages bidders to do their own research on value.

In setting the minimum bid at $1, the online auction is similar to a live auction and an auctioneer setting starting bids to encourage buyers, Mayberry said.

If no one bids, will GSA demolish the building or try another sale?

GSA has “a high success rate at conveying property” and will use its expertise to make sure the sale of the old Battin courthouse also is a success, Mayberry said.

The public can find more information about the auction by contacting Morgan at 817-978-4239 or william.morgan@gsa.gov or by visiting RealEstateSales.gov or PropertyDisposal.gsa.gov.

Copyright 2014 The Billings Gazette. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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