City’s Plan To Buy Post Office Building Unravels

Editor’s note: Contributing columnist, Steve Nicklas, expresses his views and insight on various topics in Marketplace.

— Steve’s Marketplace —

Fernandina Beach officials had a conventional plan that unconventionally fell apart – via a letter from the U.S. Postal Service.

Local officials figured to outgrow a suitable City Hall building on Ash Street as they continually hired new employees. According to plan, the bigger staff would necessitate a move into a larger facility. Ideally, the city would buy the coveted post office building on Centre Street – from the U.S. Postal Service.

Like many city efforts these days, the plan unraveled. A letter from USPS emphatically informed city officials the historic building was not for sale. This follows years of futile negotiations between the two sides.

In a letter penned a month ago, USPS Vice President Tom Samra said:

“After evaluation of our options, we have decided the best course for the Postal Service is to retain the building and continue retail operations on the ground level.”

But Samra was not finished closing the door on the issue. “Based on your letter, which indicates you are at a critical point for needing expanded government space,” Samra writes, “we’re willing to explore leasing the upper floors of the building, provided we can address such things as acceptable access arrangements and an agreeable market rate for the space.”

You see, these are some of the irredeemable obstacles. Like the access issue. There would be little access and space for city workers and vehicles (especially with an active post office there). And the market rate, or price, is a chasm-size roadblock. The landmark structure is conservatively valued at around $2.5 million. This would be a significant purchase, even for the city’s tax-spend-and-grow plans. And leasing would be complicated.

In the last few years, the city has added 40 full-time employees. In doing so, some workers have been relocated to the city-owned Peck Center. It is only blocks from City Hall, so hardly an inconvenience. However, the city has wanted to buy the post office building for many years.

Some high-ranking, non-city officials were also part of the negotiations with the USPS. For instance, former U.S. Sen. Bill Nelson spent many hours trying to convince the postal service to sell the building to the city.

The USPS has hardly been a model of financial success. A seismic move to electronic transactions and communications has devastated traditional mail. Therefore, city officials believed their offer to buy the 24,000-square foot building from the USPS would be appealing. Apparently not.

It has been implied that the city would sell the City Hall location at 204 Ash St. to purchase the post office building. City officials have moaned about the inadequacies of the old City Hall and the lack of space – as the staff has grown exponentially. All the while, the city has awaited the postal service’s response.

The city gave the postal service a deadline of Aug. 30, 2019 for a final answer, so the building’s purchase could be figured into the new budget. The USPS letter formally shut down these acquisition efforts, for now at least.

The city owns a lot of property already. According to the tax rolls, the city owns about $80 million worth of property, including the city marina and golf course and other facilities like the Peck Center.

Moving the City Hall to Centre Street might look and sound good, but it is not very practical. Centre Street has enough traffic and activity without moving City Hall into the center of it. So this looks like an expensive, and impractical, idea from the beginning.

Some explained and defended the city’s pursuit of the post office building as an effort to protect and preserve a valuable structure. For now, it looks like the postal service will continue to fill this vital role – at a cheaper cost to the city’s taxpayers. But who in the city worries about the taxpayers anyhow?

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Steve Nicklas is a financial advisor for a U.S. regional brokerage firm who lives and works on Amelia Island. He is also an award-winning columnist. His columns also appear regularly in several newspapers in North Florida and South Georgia, and on his website: www.SteveNicklasMarketplace.com. He has also published a book, “All About Money,” consisting of some of his favorite columns over the past 20 years. The book is available at local stores and on Amazon. He can be reached at 904-753-0236 or at [email protected].