Monroe ends potential interest in health district facility

Monroe has given up any potential financial claim of ownership in the Snohomish County Health District’s Rucker Building in Everett.

City councilmembers voted unanimously to relinquish any interest in the facility during their meeting Tuesday, Feb. 28, by entering into an interlocal agreement with the health district. The question of ownership has been up in the air for the past two months.

In December, the health district asked and Snohomish County and 20 cities within the county to give up any claims of ownership, forsaking any revenue that could be generated if the building sells. The health district finalized its decision to put the building on the market in January.

“This request begs the more fundamental question of whether and to what extent the City actually holds — or ever held — a legal, enforceable interest to this effect in the first instance,” wrote Interim City Administrator David Moseley in a Feb. 21 email to Mayor Geoffrey Thomas.

The nearly 95,000-square-foot space is currently underutilized, said Heather Thomas, health district public and government affairs manager. Nearly 9,800 square feet is being leased to the Internal Revenue Service while nearly 8,700 feet is vacant. The health district uses about 50,000 square feet. The health district plans to move into a smaller building — around 30,000 square feet — somewhere in the Everett area. Any remaining proceeds will go into a capital fund, she said.

The health district hosted three public meetings in Monroe, Edmonds and Marysville to answer questions and concerns regarding the lack of evidence that any other government entity has a claim of ownership to the Rucker Building, and to discuss plans to purchase a new facility.

“In order to be transparent and open with all the cities we wanted to have this conversation in advance,” Heather Thomas said. “We didn't want anyone to feel like we were hiding something, because we aren't.”

So far, five cities including Monroe have agreed to relinquish any interest, Thomas said. During the process, the county found documentation that showed the agency already had an agreement in 1996. Some cities are still looking into their records, and some haven't had a chance to put the item on their council's agenda yet, she said.

The building was purchased for $5.15 million in 1990 with a loan taken out by the health district. The loan was paid off largely by the health district by 1995, but also with funds from 20 municipalities and the county. Those payments were established in an interlocal agreement, which effectively ended when the loan was satisfied.

“It is reasonably certain that Monroe made payments for five years for its portion of the purchase totaling $24,428, or 0.273 percent of the total of the purchase price,” Moseley said previously. “The reason I say ‘reasonably certain,’ is because the city has no record of making these payments, however, that would have been our contribution, and the building was paid off during this period.”

After the agreement ended, an amendment was made to the health district charter to clarify how sales proceeds would be distributed. No other documentation was finalized to implement the amendment, so there is no legal evidence that any agency other than the health district has any claim, which is solely named on the deed and title, said city attorney Zach Lell.

City finance director Dianne Nelson determined the current value of the building is roughly $9.15 million. In total, the health district paid about $6.4 million, and the other municipalities $2.5 million of the assessed value. The health district has also taken financial responsibility for interest on the loan, taxes, utilities, operations, maintenance and capital improvements of the building, according to a health district resolution. 

If Monroe had found an enforceable method by which to collect money from the sale of the building, the return would be $24,969, so $541 more than it originally paid.

The building is not up for sale yet, but will be on the market within the next few weeks, Thomas said. It likely won't be put up for more than the assessed value, she said, but the final amount has not yet been determined.

The interlocal agreement entered with the health district earmarks sales capital to go toward the “acquisition, operation and maintenance of a replacement facility,” according to Moseley's email.