ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, February 21, 1996 TAG: 9602210030
SECTION: CURRENT PAGE: NRV-1 EDITION: NEW RIVER VALLEY
DATELINE: BLACKSBURG
SOURCE: BRIAN KELLEY STAFF WRITER
Plans to restore a "sick" building to good health in Blacksburg for centralized offices for the New River Valley Community Services Board got a boost Tuesday.
But a wrinkle involving both financing for a new Riner elementary school and an obscure section of the federal tax code may pose a problem.
The Montgomery County Industrial Development Authority gave a preliminary OK to plans to assist the community services agency with $1.6 million in low-interest financing to gut and rebuild the University City Office Building.
That building, at 700 University City Blvd., has been empty for five years, since Virginia Tech pulled 200 employees out of the leased space after widespread complaints about health problems believed to have been caused by a lack of fresh-air circulation.
Now the Community Services Board, which provides mental health, mental retardation and substance abuse services for the New River Valley, wants to consolidate seven of its 15 current locations into the structure after a $2 million overhaul.
Andy McCready, CSB vice chairman, said the option is the best of several alternatives and ultimately will save money for New River Valley taxpayers.
The building would go off the real-estate tax rolls under the proposal, but it would bring 125 full-time CSB employees to work in Blacksburg. Town officials see that as an economic plus.
The CSB bought the building for $900,000 in December through its nonprofit holding corporation, called Mountain Empire Services of the Southwest Inc. It put $400,000 down from cash reserves and financed the balance with a short-term note.
The $1.6 million in Montgomery IDA financing, which Mountain Empire Services is seeking through the Blue Ridge Bank, would enable the Community Services Board to pay off the short-term note and put $1.1 million into renovations.
About 40 percent of the renovation estimate, or $440,000, would go to replace the building's mechanical system, said Glenn Reynolds, the Blacksburg architect designing the renovation. The new system would bring more fresh air into the building, which should eliminate the situation that caused many of the respiratory complaints that bothered Tech workers. The building's original equipment, installed at the height of the late-'70s energy crisis, didn't allow enough fresh air inside, Reynolds said.
The balance of the renovation budget would go to make the building handicapped accessible and equipped, to upgrade restrooms and the elevator and to paint and install new carpet, Reynolds said.
The Community Services Board hopes to start construction in June and move in by December.
But before all that can happen, the Montgomery County Board of Supervisors will have to OK the plan on Monday.
Complicating the scenario is the effect of federal tax regulations that limit the type of local government borrowing the Community Services Board needs to $10 million a year.
The CSB and its attorney learned Tuesday that because Montgomery County already has plans to borrow more than $9 million this year to finance a new Riner elementary school, that could limit its access to a bank-qualified low-interest loan. The CSB previously had thought the school borrowing would be in the $7 million range.
Without that low-interest status, the CSB would have to pay an estimated $30,000 a year more in financing costs at current rates, said its lawyer, Daniel Siegel. That would cut into the amount of money that could go toward renovations.
Siegel and county officials are looking at various scenarios to spread out the second phase of the school borrowing, tentatively set for the fall, to avoid pushing the $10 million limit.
Lynn Chenault, the CSB's executive director, said it's too early to say if it would be feasible to proceed with or scale back the plans should the low-interest financing be unavailable.
LENGTH: Medium: 76 linesby CNB