Ten days after the City Council rejected a proposal to lend $1
million to a contractor for his planned renovation of the historic
Pendergrass Building in downtown Hollister, preservationist Tim
Lantz is
”
in limbo
”
over whether to continue pursuing the purchase.
And while other interested buyers await word on the property’s
fate, one Hollister official said the city’s involvement, at least
for now, is a
”
dead issue.
”
Ten days after the City Council rejected a proposal to lend $1 million to a contractor for his planned renovation of the historic Pendergrass Building in downtown Hollister, preservationist Tim Lantz is “in limbo” over whether to continue pursuing the purchase.
And while other interested buyers await word on the property’s fate, one Hollister official said the city’s involvement, at least for now, is a “dead issue.”
“I’m not actively pursuing anything without direction from the Council,” said Bill Avera, director of the Hollister Redevelopment Agency.
Avera’s proposal that the city lend $1 million to Lantz became the subject of heated debate over the past six weeks. Opponents said Lantz did not present a sufficiently detailed plan for the renovation, while proponents said Lantz, who has won awards for previous historic preservation projects, has rare talents the city should take advantage of.
Lantz has said he plans to recruit a commercial tenant for the Pendergrass Building’s first floor, where a potential renter has already shown interest in opening a sports bar. Lantz’s plans also include a commercial tenant for the second floor, but he does not have plans for the third and fourth floors.
Now the sale remains in escrow, where it had been placed until the Council’s decision on the loan. Even though Lantz has previously said he needs city assistance to finance the building’s extensive renovation, he also said he has not abandoned the deal.
“The fact that the city is not willing to be helpful in the project,” Lantz said, “it isn’t something that kills the project.”
Lantz planned to pay for the $575,000 purchase out of his own pocket and use a loan for the restoration. Since the City Council has backed out of involvement in the Pendergrass sale – for the second time – Lantz must find an alternate means of funding the renovation. On Wednesday, he said he will not pursue a private loan, and he declined comment on possible plans for obtaining financial backing.
The city initially expressed interest in purchasing the Pendergrass Building when Union Bank moved from the site and placed it on the market in September. The building was appraised at $495,000, but Union Bank requested a minimum of $525,000. Therefore, the city did not bid. However, several private entities did; officials said 12 bids were submitted.
One of the interested parties was Ray Barragan, a local investor who planned to renovate the building with 100-percent private money, according to his contractor, Art Correa, who owns California Construction Company.
“If it’s available, he definitely will pursue it,” Correa said.
Correa said Barragan had hoped to lease the first floor for a restaurant, the second for senior housing and the top two floors as apartments. Correa said he would perform an “extensive restoration.”
Barragan’s crew had already examined the structure, including “figuring out fire exits and elevators,” Correa said.
He called Lantz’s request from the city “far-fetched” and said the $1 million was “not enough money” to perform the restoration Lantz had planned. Correa said he recently renovated a 4,300-square-foot Victorian on Fifth Street at a cost of $800,000.
“Pendergrass is four times that size,” said Correa, adding that he is unsure whether the building will become available again.
Council members – who informally voted 3-2 during a study session to discontinue consideration of the loan – are not sure whether the city may still get involved with the sale.
“Time will tell,” Mayor Brian Conroy said. “I will say that the building is important to the downtown. I would still like to hear more about what was planned (by Lantz).”
Conroy called the information presented to the Council April 14 “very vague.”
Councilwoman Pauline Valdivia said she “didn’t feel comfortable with the approach” because Lantz had “no detailed plan.”
“If a private person wants to do that (renovate without city assistance), more power to them,” she said.
Union Bank’s real estate agent from Grubb & Ellis, Terry Deveau, could not be reached for comment before press time. Grubb and Ellis Vice President Bob Engles declined to comment.
In 1927, then-Hollister Mayor J.E. Pendergrass built the structure and opened a hotel. Officials have become disconcerted in recent years because the upper floors have remained vacant for more than two decades.
