Federal building's future looms large over Broadway

It has been 226 days since the former federal building in Cape Girardeau was put on the market. While Mayor Harry Rediger worries the building will blight the newly improved Broadway Corridor, its real-estate broker remains optimistic that a buyer will be found.

Cape Girardeau began work on a project to renew the street last April, and the building at 229 Broadway sits in the middle of the city's efforts to spruce up the gateway to historic downtown and the new Isle Casino Cape Girardeau. Paid from the voter-approved Transportation Trust Fund, the Broadway improvements cost $4.7 million to date, according to city engineer Casey Brunke.

"Unfortunately, the federal building is the biggest negative on the Broadway streetscape," Rediger said Thursday.

He said at least six businesses have improved their properties in an enthusiastic effort to make Broadway a destination for residents and visitors.

During an auction process last spring that culminated in the former federal building being purchased for $325,015 by Magid Hemmasi of RDRH Holdings Inc. of Austin, Texas, the mayor said the building sitting empty would be a "worst-case scenario."

Wood bookshelves line an office in the former Federal Building, 339 Broadway in Cape Girardeau. (ADAM VOGLER)

"That's my biggest fear and it's coming to fruition," Rediger said Wednesday.

Cape Girardeau County considered purchasing the building and entering into a partnership to share space with Cape Girardeau municipal offices. The General Services Administration [GSA], which oversees the sale of all federally owned property, turned down proposed deals with the county for as much as $1.27 million. The GSA put the building up for auction and rejected bids as high as $625,000 before selling it in a second auction to Hemmasi in excess of the county's final $300,000 bid. The county was given a chance to purchase it at retail, but passed on the $525,000 asking price, citing needed costly improvements. The city and county also struggled to come to an agreement on how to share the space.

Hemmasi put the building back on the market at its current asking price, $1 million.

Thomas M. Meyer of Exit Reality of Cape Girardeau believes that price is reasonable considering the building's quality, which includes materials such as marble, oak and terrazzo. Unlike many commercial properties, he said, it was constructed for long-term use.

"It's built like a fortress," Meyer said. "It is still a very attractive building."

A holding cell in the former Federal Building, 339 Broadway in Cape Girardeau. (ADAM VOGLER)

Comparable new construction would cost $800 to $900 per square foot, he said. Based on the 44-year-old building's 54,400-square-foot finished size -- not including the basement and penthouse areas -- the asking price is just above $18 per square foot.

There have been a few serious inquiries in the last six months, Meyer said. Now that the election season and holidays have passed, he expects interest to pick up, especially with the approach of spring.

"Warmer weather enhances the market," Meyer said.

Along with interior and exterior photographs, Meyer is sharing with potential buyers images of the Broadway Corridor upgrade as seen from the roof of the building.

He said the improvements, including the renovation of adjacent properties, are a positive selling point.

A hallway in the former Federal Building, 339 Broadway in Cape Girardeau. (ADAM VOGLER)

The building is being maintained and heated to be ready for viewing. Though a buyer may choose to make cosmetic changes, the building is structurally sound and ready for use.

Meyer, who has experience selling unique properties such as the former Louis J. Schultz School and the Marquette Hotel, anticipates a potential buyer would be looking for office space, but ideas "outside the box" would be welcome.

Rediger is less confident a buyer will be found near-term. He believes the asking price is too high and the building would be "monumental" to transform into something other than a government building. He expressed disappointment at the GSA's failure to make agreements that would have retained it for governmental use.

"It's been very, very discouraging," Rediger said.

Representatives for Hemmasi said he was not available for comment.

salderman@semissourian.com

388-3646

Pertinent address:

339 Broadway, Cape Girardeau, MO