The Fort Smith Streets Department will not move into the former Arkansas Department of Transportation District 4 headquarters. 

The streets and utilities departments currently share a building at 3900 Kelley Highway, but due to the expansion of utilities in order to comply with the consent decree, the two are are “cramped” at the single location.

Utilities had planned to pay for the ArDOT building — it was appraised by the city at $300,000 and by ArDOT at $391,000 — in order to keep the current space and have the streets department located on Towson Avenue.

ArDOT previously offered multiple trades for the building, including the maintenance of certain Fort Smith streets in return for the space, but none of the proposed solutions were in the city’s best interest, City Administrator Carl Geffken told the directors last week, and the land would go to auction.

Geffken attended the 11 a.m. auction Tuesday, but the city lost to a private bidder.

“I deferred to the private firm to start the bidding; he did so at $100,000,” Geffken wrote in an email to Mayor Sandy Sanders and the directors. “After a series of 11 bids, the private company won the bidding at $200,000.”

Geffken said he did not want to go over the $200,000 amount, because he said the appraisal occurred two years ago and, “I don’t believe the value of the site has increased since then.”

When the request was originally presented, Geffken said the building would need work to comply with city code. He said it will cost approximately $160 per square foot to renovate the building, whereas starting new would cost $200 per square foot. Geffken estimated the building upgrades will total $3.6 million.

Because the city lost the bidding process, however, Geffken said it will continue to look for other options.

“I said, ‘I’ll find another option that is more cost-effective for the city,’” Geffken said. “On the benefits side, now that it’s privately owned, it’ll go on the tax rolls, so that’s a win.”

For now, the street department will continue to share a location with utilities. Geffken said the city may attempt to find a “contiguous piece of land” where the two departments are currently or see if there’s another location in the city that may be put up for auction in the near future.

“There’s no need for us to waste money to say, ‘I’m going to win this for $300,000,” Geffken said. “I didn’t think that was a good thing to do with the city’s money.”