Acquiring Palm Building Still The Goal

The Palm Building, located at 101-103 E. Spring St., is the piece of property the city of St. Marys is looking to purchase for its new municipal building and as a step toward its efforts of revitalizing the downtown area.
Managing Editor

St. Marys Administrators approached council during a Feb. 25 council meeting to ask for the passage of a resolution in an attempt of acquiring property on Spring Street in order to construct a new municipal building to not only keep the main city operations downtown but to serve as a move toward its downtown revitalization efforts.

As part of that resolution, the city is also seeking eminent domain if the property owner of 101-103 E. Spring St. — Kalvin Schanz — does not negotiate with the city.

This story is a breakdown of the property the city and Schanz are at crossroads with.

The majority of city administrators hold offices at the current municipal building at 101 E. Spring St. It was built in 1924 and has a laundry list of issues and concerns for its employees. Some of those issues are the steel floor joist rusting through caused by water infiltrating through concrete floor slabs, the heating system is an old boiler that was installed in the 1950s — making the system unreliable and inefficient, asbestos insulation is on heating pipes and the building is not handicapped assessable. 

“It really has outlived its useful life,” Director of Public Service and Safety Greg Foxhoven said. “It has served us well, but we fight this building through every season.”

A new municipal building is planned to be constructed during the final phase of the Spring Street reconstruction Project — a multi-phase, multi-year project from Knoxville Avenue to Wayne Street.

“We understand that the new building would still be in the flood plain, but we have a plan for it,” Foxhoven said.

Plans for a location of a new municipal building has been in the works for years, Foxhoven said. The city has been working with Garmann Miller & Associates during that time and were in serious discussion about constructing a new municipal building on High Street in the parking lot behind The Evening Leader when the city received word that someone else was interested in buying the Palm Building. The High Street location was not an option as time moved forward because the logistics of fitting a building of that size in that location were too difficult.

That’s when the city turned its attention to the Palm Building after the party or parties were no longer interested in the site.

“We want to be on Spring Street and we think it is important to be on Spring Street,” Foxhoven said. “When you look at the area, our options are limited and that is the most viable location for us.”

Foxhoven said the current municipal building — which is one story with a basement — would, in essence, be flipped as a two-story facility with no basement. Parking would be available underneath the elevated building and if flooding occurs, only parking would be affected. City administrators decided against renovating the current municipal building because the cost would be too high and continuing day-to-day operations while stripping down the entire foundation would be too difficult.

The plan is to construct the facility, move out of the old municipal building and destroy it to make additional space at Memorial Park.

With the need of acquiring the Palm Building, the city is currently in a stalemate with Schanz and his company, Counsel Appraisals Inc., which had its charter revoked by the state of Ohio according to City Law Director Kraig Noble.

The city sent a letter to Schanz to negotiate for the purchasing of the property on March 9, 2017, Dec. 7, 2017 and a final offer on Feb. 7, 2019. Foxhoven confirmed that the city did offer him $60,000 for the property in one of those letters. According to the Auglaize County Auditor, the property is valued at $133,760, but the last time the property was purchased was just for $75,000 in 1993.

“The auditor’s value, sometimes those are accurate and sometimes they aren’t,” Noble said at last week’s council meeting when a member of the public had questions about the eminent domain process.

If the two sides cannot reach an agreement by then, the case would go to a jury panel to assess the value.

The city’s third letter indicated to Schanz that it would more than likely follow-up with the eminent domain process if it is not able to obtain a negotiated agreement from the owner.

“The law requires us to negotiate and we want to negotiate with the property owner,” Foxhoven said. “If at any point in this process, the property owner decides to corporate and negotiate, we will gladly sit down and talk to him.”

According to Cornell Law School, eminent domain refers to the power of the government to take private property and convert it into public use. The Fifth Amendment of the United State Constitution stipulates, however, that government may only exercise this power if it provides compensation to the property owner or owners. 

With no contact from Schanz in the two years the city has reached out to him, council passed, unanimously, Resolution 2019-07, declaring the necessity and intention to appropriate for municipal purposes for property during that February meeting. The resolution is the first step of the eminent domain process.

“This isn’t the government just running rickshaw over taxpayers,” Foxhoven said. “Usually this happens because negotiations have maybe never started or they have stalled, but there is always compensation. The government does not just come in and seize your property and you walk away with empty pockets.

“That doesn’t happen. The offers have been out there, they have been ignored and this is the next process. It is like your hand is forced at this point to go through this process. That law is in place because we have to be able to function.”

To read the full story, see Tuesday's print edition of The Evening Leader.