WARREN - The city will begin a fund for capital improvement projects with rent money from leasing out space at the Gibson building.
Councilwoman Helen Rucker, D-at large, sponsor of the legislation that passed unanimously Thursday, said rents from the building are projected to be $390,000 a year through 2016.
The Social Security Administration and Women, Infants and Children are leasing approximately 46 percent of the building.
After 2016, the amount of rent from the lease will drop by approximately $60,000 because an additional amount currently being paid by Social Security Administration for previous improvements will be paid off.
Rucker wants half of the money to be used for the upkeep and improvements of the Gibson building, as well as other city-owned properties, and the remaining half to be placed in a capital improvement fund.
"We have not had a capital improvement fund in the city since former Mayor Hank Angelo's administration," Rucker said. "I believe we should have money available to use if a company comes into the area and needs a local match for improvements that may be needed on a building or property that they may be interested in purchasing.
"Warren has been so reactive," Rucker said. "It never has money available to do big projects."
She said some of the money may be used to hire someone to market the city, instead of only depending on the regional chamber .
"If a company is looking to bring in jobs, we should have income available to provide some level of incentive to convince them to move into the city," Rucker said.
Rucker envisions the capital improvement portion of money also could be used for a variety of purposes, including as a match for money needed to buy or repair equipment.
Because several council members during the bond discussions called the city a bad landlord because of its inadequate maintenance of buildings it currently owns, Rucker emphasized that once the Gibson building is prepared for occupancy, maintenance portion of money will be available for other city buildings. The money will not be used for buildings the city intends to tear down.
"I'm not trying to hamstring either the administration or the council if emergencies come up in the future," Rucker said. "If there is a future need we will know where the money will come from.
"I know there are some council members that want to use the profits to do an early pay off for the bond," she said. "It is something we can look at in the future."
City auditor Dave Griffing said city has not officially purchased the Gibson building.
"We sold the bonds today (Thursday)," Griffing said. "After we get the signatures on the various required papers, we are expecting to receive the money from the bond sale on Dec. 23."
The city sold $8.6 million worth of bonds.
Griffing said the purchase of the building should take place before the end of the year. Improvements on the building, as well as work on the other bond issue projects, likely will not take place until 2014.
"The legislation passed by Councilwoman Rucker restricts the use of the lease income," Griffing said. "The funds cannot be used to pay off the debt of the bonds, unless council changes the ordinance's language."
Although Councilman Vince Flask, D-5th Ward, said he was hesitant in supporting the legislation because half of the rent money would be used for building maintenance he said he is very supportive of the idea of the remainder being used as a fund for capital improvement and investment in the city.