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Development

Postal Service seeks new bidders for damaged downtown post office

From the Series: Downtown Napa Post Office Recovery Timeline series
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It’s back to square one for Napa’s historic downtown post office.

An offer to buy the earthquake-damaged building has fallen through and bids are once again being accepted. Even faced with the costly task of redeveloping a historic building, the city and those familiar with the project remain optimistic a new buyer can be found.

As of late March, a buyer had made an offer and was taking the time to “kick the tires” and review the property, according to Gus Ruiz, United States Postal Service spokesman.

However, after doing so, “The buyer terminated the contract,” said Ruiz.

He did not elaborate on who the buyer was, how much the buyer had offered for the property or why the bid was withdrawn.

Napa County Landmarks spokeswoman Juliana Inman said she’d been in talks with the first buyer. She declined to name the party, saying only it was a local business, not a developer.

“I think the project was outside of their core business area expertise,” she said, explaining why the prospective buyer dropped out.

“I’m hoping one of the previous bidders comes forward with another proposal,” Inman said. She believes that those other bidders were local or regional buyers, “people with knowledge of the Napa market.”

The deadline to submit new proposals is Tuesday, said Inman. Previous bidders must resubmit their bids if they would like their offer to be considered.

The post office, which was built in 1933 in the Art Deco style, was badly damaged in the August 2014 earthquake and has remained closed since then.

In early July, the USPS first proposed demolishing the structure at 1351 Second St.

The agency said that it would cost $8 million to repair quake damage, while it would cost only $500,000 for demolition.

After considerable public outcry, the agency decided to try selling it to a buyer who can repair the structure and preserve its architectural integrity. The USPS has since consolidated operations at a new location across the street and at a larger facility on Trancas Street.

Inman said the possibility that the building could be demolished still concerns her.

“We need to keep moving in the direction of preservation and rehabilitation and adaptive reuse,” said Inman.

“I think it will sell,” she said. “It’s in the heart of downtown Napa, a very hot market right now. It’s going to be a lot of work for somebody, but there are great opportunities for redevelopment of the site.”

“Sometimes these things do take a couple of tries,” she said.

Chris Jonas, a partner at ZFA Structural Engineers, toured the post office on Tuesday to do an assessment for a client. Jonas said only one or two other people attended the tour. About a dozen people were at a tour earlier this year.

Jonas was representing a potential buyer he declined to name.

The project is a challenge, he acknowledged. “On top of the structural repairs, which are, in itself, a challenge, so is the retrofit of this building.”

In addition, other criteria have to be met because it’s listed on the National Register of Historic Places.

“It’s extra work and extra cost,” Jonas said, and “in the end it has to be financially viable.”

Likely uses of the property include a hotel, restaurant, apartments or office space. It is possible to add underground parking, Jonas said.

The best-case scenario, according to Jonas, “is that the deal is made and that we create a project that fits downtown, and the developer can make some money at it.”

The worst case is that “nobody takes an interest because it’s not financially viable and the Post Office ends up demolishing the building.”

Napa real estate broker Joe Fischer toured the historic post office earlier this year.

On Tuesday, he said the latest 30-day due diligence period to review the property is “highly problematic.”

There is no certainty from the city on what could be built on the property, he noted. Therefore, the USPS “is effectively asking a well-intentioned developer and capital to acquire the property on faith and hope,” he wrote.

City planning manager Ken MacNab said that the city understands that once the parcel is sold and no longer used for government work, the zoning needs to be updated.

“We are supportive of re-designating that site to what we call downtown mixed-use,” said MacNab.

The city is meeting with prospective bidders in advance, said MacNab. “We can talk about approaches.” Developers who “meet our development standards and allowed uses should have a level of comfort there’s a good chance their project will be approved,” he said.

According to Fischer, a 30-day close really only works for cash-rich buyers “that like to speculatively buy, then hold properties,” said Fischer.

“I don’t think the city really wants that kind of buyer for such an important property,” Fischer said.

“The city wants to see it preserved. We’ll do what we can to help that happen,” said MacNab. “There is a lot to do and process in a short time, but I don’t think it’s insurmountable.”

In Fischer’s view, “I think something needs to change or we will wind up with fencing around (a) dilapidated property for a long time. There has to be some creativity applied to get what I think the community and preservationists want to see happen.”

“When the Post Office first had the property out for bid, I talked to a number of prospective parties who had ideas for future reuse and preservation,” said MacNab.

“None I spoke with were thinking it would be a post office but they had other conceptual ideas for commercial use. I hope that those parties will be excited they have another opportunity to bid for the property,” he said.

MacNab said he doesn’t think it’s a white elephant. “There are certainly challenges with the preservation and damages. It’s a challenging situation.”

However, “I am optimistic we will have a successful bidder who will bring us a project that preserves the building and adds a great use to downtown,” said MacNab.

“We were close before, and I think there are other groups out there,” he said. “I’m optimistic someone will come forward and make this work. “

Rep. Mike Thompson is another advocate of saving the old post office.

“I’m determined to see the Franklin Station Post Office remain standing for future generations,” said Thompson in a statement. “I’m pleased that the USPS will continue to pursue the sale.”

The original posting incorrectly identified the person who said the deadline for new bids is Tuesday. 

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Business Editor

Jennifer Huffman is the business editor and a general assignment reporter for the Napa Valley Register. I cover a wide variety of topics for the newspaper. I've been with the Register since 2005.

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