The City of Carmel intends to pay $1.5 million to purchase the second floor of the Lurie Building, a space that it’s been renting from art dealer Evan Lurie for the Carmel Utilities offices since 2013.
The city pays $11,330 per month or $135,960 per year to rent the 7,363-square-foot space, which also houses several employees from the Community Relations and Economic Development Dept. The Carmel Redevelopment Commission, which moved its offices to Midtown this spring, also leased space on the second floor beginning in 2008.
Carmel Utilities has paid Lurie approximately $775,000 to rent the space since 2013, a figure that does not include previous rent payments from the CRC. The city has also spent at least $189,000 to build out the space.
City officials say purchasing the space instead of leasing it will save money in the long term. Rent is set to increase 3 percent in 2022, bringing the annual payment to $140,040 per year. With an expected 20-year loan at 3 percent interest, the city would pay $100,152 annually as building owners, according to city spokesman Dan McFeely, leading to more than $390,712 in estimated savings in 10 years.
“By purchasing instead of the leasing, we will see substantial savings,” McFeely said.
He also said interest rates were not favorable for purchasing the second floor in 2013 and that Lurie wasn’t interested in selling at that time. Lurie, who owns and operates the Evan Lurie Gallery on the first floor, said the city purchasing the space had been discussed as a future option since the building’s early days. He said now the timing is right to sell.
“It just made sense, because they’ve been up there a long time,” he said. “It just seemed like a logical thing for everybody.”
The sale is expected to be complete by Dec. 20.
Drew Pattyn, a broker and president of Northern Commercial, said he thought the purchase price would be higher based on the building’s size and location.
“I would’ve expected the (sale) to be closer to $2 million,” he said.
Funds for the purchase are proposed to come from a proposed $17 million water works bond package that also includes water system upgrades and solar panel installation.
Carmel Utilities Director John Duffy told the Carmel City Council finance committee Oct. 28 it would cost $20,000 to $30,000 to move out of the Lurie Building to a new location. He said the current office provides plenty of space for the department’s 11 employees based there and that it has room for a few more.
“It is our base, and it seems to work well. Our customers have gotten used to it,” Duffy said. “We don’t have a strong desire to move. I think our lease deal is acceptable in terms of dollars, but it just saves money, particularly at the low interest rates we’re looking at now.”