Arroyo Grande City Council votes to move forward with Village project

After several hours of discussion late Tuesday, the Arroyo Grande City Council voted 4-1 to move ahead on a project that would add commercial development to the Village, increase city facilities and create an area to recognize the city’s Centennial in 2011.

With Councilman Chuck Fellows dissenting, the council voted to move ahead with three stipulations: that the council within 45 days decide what to do with its current City Hall building; that it agree on how to fund acquisition of the former Farm Credit building at 300 E. Branch St., which would be used for city facilities; and to determine staff and operational needs at both buildings.

Councilmen Ed Arnold and Jim Guthrie would work with staff on the last condition. Guthrie expressed concern at the meeting that the current city facilities are deficient and said he believes the city could fit its current staff into the Farm Credit building.

Guthrie also wants the council to consider other ways to pay for that building rather than using sales tax revenues. Under the current proposal, the city would pay about $1.2 million for the building, which City Manager Steve Adams said the city would pay for with a low-interest federal loan. The annual cost to the city is expected to be about $78,000 for a 30-year-term, of which $58,000 would be funded by local sales tax revenues.

The council will hold a special meeting at 6 p.m. on March 29 to discuss those conditions.

Under the plan, San Luis Obispo-based NKT Commercial would sell the city the former Farm Credit building in exchange for the Conrad House, the 1950s-era city Building Department office and the parking lot between the buildings.

The Conrad House would be restored, and NKT Commercial would construct a 5,700-square-foot commercial building in the area of the current parking lot and 200 E. Branch St. More than 20 people attending Tuesday night’s meeting urged the council to preserve the Building and Life Safety Services building at 200 E. Branch St., also known as the “malt shop.” Read more about Tuesday’s meeting at http://www.sanluisobispo.com/2010/02/24/1041977/new-issue-raised-over-ag-centennial.html.

Short Street would be made one-way and realigned, adding $30,000 to $50,000 to the cost of the project, depending on the design. That money would come from local sales tax revenue currently budgeted for city hall improvements, Adams said.