After an hours-long study session Tuesday afternoon, the Goleta City Council voted unanimously to move forward with negotiations and fact-finding for the acquisition of a new city hall.

The decision was not without major reservations from council members, however, as they expressed concerns about financing for the $14.4 million facility, given the state of Goleta’s economy, the permitting process and other wrinkles the city would have to iron out with developer Sares-Regis, with which they have been negotiating.

“I have some real concerns about some outstanding issues,” Councilman Michael Bennett said, pointing out elements in the draft agreement, such as the city shouldering cost overruns exceeding $120,000, or a $5 million deposit toward the construction of the building, which he called “laughable.”

The proposed building for Goleta’s new city hall is two stories and 40,000 square feet at 6767 Hollister Ave., between Storke and Los Carneros roads, in the developing Cabrillo Business Park. The city intends to pay for the building through several means: funds designated for the purpose, borrowing from its reserves and issuing bonds.

While the city’s consultants estimate that only 20,000 square feet is necessary for its operations, the plan is to purchase the entire building and lease out the top floor, with the funds going toward the purchase of the facility.

“I think the message here is location, location, location,” said Sares-Regis’ Russ Goodman, highlighting the benefits of having a public building in that location, close to local businesses, transportation routes, UCSB and commercial areas.

While the goal for the city has been to eventually purchase its own facility instead of continuing to rent space at 130 Cremona, even in this soft real estate economy council members were reluctant to jump at what was touted as a good opportunity.

“Now is not the right time,” Mayor Roger Aceves said, adding that the city just laid off two employees and cut funding to several programs to balance its budget. The city hasn’t even begun renegotiation of its Revenue Neutrality Agreement with Santa Barbara County, a contract that requires Goleta to share up to half of its revenues with the county. Aceves also pointed out that the city’s current landlord, Jeff Bermant, has offered new lease terms on their facilities.

Councilwoman Margaret Connell aired her concern over the scheme to purchase twice the amount of space needed and lease out half.

“This whole thing is dependent on the lease,” she said. “And I’m concerned about some of the risks. … I don’t know that there’s a huge rush; I think we can wait on this.” Councilman Ed Easton echoed her comments.

Councilman Eric Onnen, while still skeptical of the proposed agreement, was the most optimistic of the panel, urging the rest of the council to vote to continue with the negotiations and fact-finding, despite what had been called “deal killers” in the draft agreement and permitting issues, such as archaeologically sensitive findings in the area, that could pose problems in the face of an impending September deadline, when the due-diligence time line runs out.

“Bottom line, this whole process for me demonstrates that we have an opportunity in front of us,” he said.

The City Council is scheduled to take up the matter again Sept. 1.

— Noozhawk staff writer Sonia Fernandez can be reached at sfernandez@noozhawk.com.