In June, Chattanooga Housing Authority officials wanted to sell the agency's central office building for $5 million.
But when the Holtzclaw Avenue building was put on the market in July, the price had dropped to $2.9 million.
Now, after seven months with no buyers, housing officials say they'll lease it if the right deal comes along.
"The sign in front of the (CHA Holtzclaw Avenue) building says 'Available,'" said Bill Lord, the housing authority's chief information officer. "The idea is that it's listed for any number of options. Anything that would be viable to the housing authority would be considered."
The authority's interim executive director, Betsy McCright, said the property appraised at $5 million in 2008 but since has dropped in value. She declined to give the current appraised value.
A 2008 appraisal listed at the Hamilton County Assessor's Office valued the property - without including the building - at $36,000. The value of the building will not be included until the city sends out its new commercial reappraisals, which are due to be mailed between mid February and April 6, according to the Hamilton County Property Appraiser's office.
In early 2006, the housing agency took out a $3.1 million loan under its Holtzclaw Avenue LLC Subsidiary to construct the building. Since moving into the central office that same year, the number of authority staff in the building has dropped from about 80 to 40 people, officials have said.
Unfortunately, the housing authority may have to take a loss regardless of whether it leases or sells because of the type of building, said Henry Glascock, a local commercial real estate appraiser. The 28,000-square-foot building was a warehouse that was renovated by the housing authority for more than $3 million.
"The value on special-purpose properties, unique properties, is far less than the cost to build," Mr. Glascock said. "So what you end up with is trying to lease or sell at market rate a building for a lot less than you have invested in it."
In June, housing authority officials told the U.S. Department of Housing and Urban Development that selling the central office building would net about $5 million. The money was needed to stave off the authority's $4.5 million budget shortfall, which HUD personnel were watching closely.
But from July until December, the property was listed through Charter Realty for $2.9 million.
A local businessman said he tried to buy the building for $4.5 million in June and allow the housing agency to remain in it on a lease. No one at the housing authority acted on his offer, said Tom Kale Jr., president of Commercial Associates.
Mr. Kale said he made the offer as a representative of United Trust Fund, a Miami-based corporate realty firm.
He said no formal contract was written because he never got a response after sending e-mails to Ms. McCright and authority Chief Financial Officer John Coxwell. He said he also had telephone conversations with Naveed Minhaus, the authority's vice president of development.
Mr. Lord said Mr. Kale never made an offer to any housing official or to Charter Realty.