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Lago Vista council directs staff to pursue appraisal and return with KC Building details
Summary
Councilors discussed purchasing the KC Building at 2624 FM 1431 after staff presented purchase price and preliminary finance estimates; council instructed staff to finish inspections, appraisal and return with detailed numbers for an April meeting.
Lago Vista’s City Council resumed public discussion of a potential purchase of the KC Building at 2624 FM 1431 after an executive session and directed staff to complete due diligence and return with financial details.
City staff reported the owner offered the building for $3.5 million and described a financing scenario that would use $1,000,000 from the city’s restricted real estate fund as a down payment. Staff estimated financing of roughly $2–2.5 million at a 6–6.5% interest rate would produce monthly mortgage payments near $17,000–$18,000. Under current leases staff said the building generates about $20,900–$22,200 in annual rental totals next year and projected a modest positive cash flow of roughly $2,000–$3,000 per month, before accounting for appraisal, inspection and other transaction costs. Staff emphasized no remodeling would occur immediately and the building would initially be used for administrative offices.
Councilors debated long‑term needs — staff said an eventual city hall would need about 15,000 square feet — and compared the building buy to the estimated cost of building new. One council member said building new on city‑owned land could cost $6–$12 million or more now and likely be a decade away due to bond limits and water/wastewater priorities. Several members said the potential that tenant lease revenue could offset mortgage costs made the proposal worth more study. Others stressed caution about spending upfront appraisal and inspection funds without broad council consensus.
After discussion, Council signaled consensus to allow staff to complete appraisal and inspection work and to bring fuller financial and feasibility data to the council’s next meeting (staff indicated some materials would be available next week and more by April 2). The council did not approve a purchase tonight and took no final action; staff will return with the compiled information for a future decision.
The next procedural step is staff‑driven due diligence and a public follow up with appraisal, inspection results and a clearer estimate of net fiscal impact to the city.
