SEQUIM — Consultants for the city of Sequim using ground-penetrating radar and boring into the ground have uncovered two underground fuel tanks, but no leaks were found at property the city seeks to purchase as part of a package for a new city hall and police station.

Asbestos also was found in the 1912 commercial and apartment building owned by Serenity House at the corner of North Sequim Avenue and West Cedar Street, which is the last piece needed for city ownership of property to build new facilities.

The asbestos will be cleaned up without major cost, city officials said.

“We knew there was a buried oil tank because it was in use” for heating fuel, City Attorney Craig Ritchie said.

Another gas tank at the former corner store, now a beauty shop, was decommissioned in the past and was not leaking, he said.

The asbestos was expected, Ritchie said, because of the age of the building.

City Manager Steve Burkett said the city was merely performing its “due diligence” to ensure that the existence of the fuel tanks or asbestos was not too expensive to clean up.

The City Council discussed the issues Monday night while looking over a proposed addendum to the real estate purchase agreement with Serenity House.

The council went into closed executive session to discuss the matter but did not take any action when it reconvened in public.

Close deal

The city is expected to close the deal on the property acquisition as late as Feb. 28 or as early as Feb. 21, Ritchie said.

The City Council in late November approved the $1.25 million purchase of a 22,000-square-foot property with existing buildings at the corner of North Sequim Avenue and West Cedar Street for the future site of a new city hall and police station.

The property adjoins existing city-owned property on West Cedar Street, giving the city all the land it needs to build a new city hall.

The property includes commercial space for Serenity House, a homeless shelter and transitional housing organization for the needy, plus a hair salon and 10-unit apartment complex for transitional housing.

The city’s purchase would in effect create public ownership of the entire block of the north side of West Cedar Street from North Second Avenue to North Sequim Avenue.

The city and Clallam Transit share the Sequim Transit Center building where the City Council now meets.

Under the agreement that has to go through escrow, the city would lease the property to Serenity House for $1,500 a month for three years as long as Serenity House pays for insurance and maintenance.

The city would lease the property back to Serenity House because it would not need it immediately, Burkett said.

Under one roof

The new city hall would put the public works department, city police, planning, human resources and the city attorney all under one roof.

While the city had more than enough budgeted — $2.25 million — to make the final land acquisition, estimates on total cost of the project have ranged from $12 million to $18 million.

The existing City Hall, which was recently remodeled to make existing space more efficient, has been at the same location for about 100 years.

The city recently remodeled its lease space in the Sequim Village Plaza near J.C. Penney, south of West Washington Street, for the existing police and sheriff’s station and for additional police storage and workout area next door, along with space for the human resources department, the city attorney and some planning officials.

The city now pays $193,000 in rent at the shopping center and for public works and planning on North Fifth Avenue.

City offices now occupy about 20,000 square feet, 80 percent of which is rented, according to the city manager.

Burkett estimates the new city hall and police department together would be about 40,000 square feet.

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Sequim-Dungeness Valley Editor Jeff Chew can be reached at 360-681-2391 or at jeff.chew@peninsuladailynews.com.