SEYMOUR – The Board of Selectpersons unanimously voted to sell the former Center School at 98 Bank St. to the Naugatuck Valley Health District last month for $350,000.
The board during its meeting Dec. 20 voted to authorize First Selectwoman Annmarie Drugonis to sign a sale contract.
Employees of the Naugatuck Valley Health District are familiar with the property – it’s been their headquarters for some 19 years.
The building has three floors. The NVDH has been leasing two of the building’s three floors from the town for $16,667 a year, according to a 30-year lease signed in 2003.
The sale will allow NVHD to move its employees out of the basement office area and into the upper floors. The NVHD plans to spend about $1 million in repairs and upgrades on the old building.
Town records have the building, which sits on 1.09 acres, assessed at $1.02 million, based on 2020 values.
Prior to selling to NVHD, the town had an appraisal done in August by Advisra Consulting, LLC, based in Milford, which said the property had a market value of $330,000.
Drugonis told the Valley Indy that the $350,000 sale price was a fair deal.
She said the $1.02 million assessment on the property’s field card on file in the Assessor’s Office did not represent an accurate picture of the building’s worth, given the below market-value lease on the building the town had with NVHD.
Town Attorney Richard Buturla called the building a “distressed asset.”
“The assessment did not reflect the impact the long-term, substantially below market lease had on the value of the building,” Buturla said. “The appraisal obtained by the town reflected the negative impact of the long-term lease on the value of the building. The appraised value is indicative of the market value. The town disposed of this distressed asset based upon the actual market value of the building. The appraisal confirms that the town made a prudent decision.”
The appraisal report noted that the building’s value declined given the COVID-19 pandemic’s impact on commercial real estate and the recent rise in mortgage interest rates.
“Overall capitalization rates have been increasing, resulting in value declines,” the report states.
The appraisal, according to the report, was arrived at using both a sales comparison approach (a value of $315,000) and an income capitalization approach (a value of $342,000), and then estimated the property’s market value at a mid-point of $330,000. It also took into account a shortfall of about $580,000 in the below market value lease.
Drugonis said if the town sold to someone else other than NVHD, the town would have to buy out the remainder of the lease, and make other costly improvements to bring the building up to code.
“Because the building would have to be brought up to code – meaning an elevator, new roof and other work that would need to be done to bring it up to the value stated on record-we feel this is a true value of the building,” Drugonis said.
The building was built in 1925 and housed Center School for decades.
Drugonis said the town has been discussing selling the building for more than a decade. She said it costs the town between $60,000 and $80,000 a year to heat, cool and maintain the building.
Adam Bronko, chairman of NVHD’s Board of Directors, said the health district has outgrown its current space in the building. It currently has 20 employees. He said the intent is for the health district to take over the whole building, with no plans to lease any of the space to other entities.
Bronko said he expects renovations and repairs to the building to cost more than $1 million. They’ll include replacement of mechanical systems, waterproofing the basement, parking lot resurfacing, interior/exterior lighting upgrades, addition of central air-conditioning systems and installation of an elevator, to name a few, Bronko said.
In addition, Bronko said plans include creation of meeting room space to host community clinics and events.
Bronko noted the basement area, which currently houses the health district, has a water problem. It’ll be fixed and then be used as a basement, not office space.
“There are serious water intrusion issues that frequently occur in the basement area of the building during storms which cause flooding and air quality issues that our staff continually have to deal with,” he said. “We believe that those conditions are something that staff should not have to deal with on an ongoing basis. The purchase will now allow us to move our staff entirely out of the basement of the building and into the first and second floors, leaving the basement area to be used primarily as a storage area for records and files that we are mandated to keep.”
The third floor of the building was previously occupied by the Seymour Board of Education’s central offices (the superintendent and supporting administrative offices). That changed in November 2022 when central offices moved out of 98 Bank St. and into a wing of Seymour High School.