Norfolk Daily News

Wednesday – February 20, 2008

Concept Drawings Intended as a Tool to “See What’s Possible”
Concept drawings for a shared office building for the City of Norfolk and other groups have been unveiled, along with information about how such a building could be paid for.

The coordinator of the Shared Facility Work Group has unveiled concept drawings for a shared office building for the City of Norfolk and other groups.

It would be built on the northeast corner of the Seventh Street and Norfolk Avenue intersection on the Salvation Army parking lot, which is one of four locations the city council is considering as it explores its options for new city office space.

The council has yet to decide whether to go it alone with a new or remodeled building just for the city or to partner with other groups in a joint facility such as that put forth by Tom Schommer, who is serving as the coordinator of what’s called the Shared Facility Work Group.

“It’s merely conceptual,’’ Schommer said of information compiled for the work group. “It’s intended to serve as a tool so we could see what’s possible if we take time to discuss the issue and not rush into a decision too quickly.’’

The city has an option until mid-March to buy the former First Christian Church building on North 13th Street for $650,000. The city estimates it would cost $2.27 million to buy and remodel it for municipal offices.

City staff members have estimated costs for the other three finalist sites, which are all downtown: Nebraska Health and Human Services building at Fifth Street and Braasch Avenue, $2.17 million to buy and remodel; build new at the council chambers location at Fourth Street and Madison Avenue, $3.1 million; build new on the Salvation Army parking lot, $3.03 million.

Involved in the work group are representatives of Madison County, the Northeast Economic Development District, Norfolk Area Chamber of Commerce, Madison County Convention & Visitors Bureau, Elkhorn Valley Economic Development Council, Norfolk Area Recruiters and Service Corps of Retired Executives.

Recently added, Schommer said, was the state employment agency Workforce Development.

For a shared building, he said, the idea involves the city entering into lease-purchase arrangements with the other groups, which would pay rent to have offices in the building.

“If I was the city in this and the potential landlord, I’d want to cooperate knowing I’d own the building in 20 years and knowing I’d only pay for half of it. It’s a revenue stream to the city without raising taxes. This plan would generate an ongoing annual revenue stream to the city of $165,000 to $200,000, depending on final cost of the facility,’’ Schommer said.

The potential partners haven’t committed to anything yet.

“None of these entities is saying they’ve agreed to do anything other than continue on with the discussion, look at the final plan and then make a determination,’’ Schommer said.

With almost double the floor space because of the addition of the other groups, the cost of the proposed two-story building would be higher than for just a city office building on the site.

After consulting with builders, Schommer’s estimates — for discussion purposes — are
$4.59 million at $125 per square foot or $5.45 million at $150 per square foot.

Using those figures means the city would have to come up with $170,937 or $202,892 — depending on the construction per foot costs as its annual share of the cost for a 34,361-square-foot building. City officials say they need only 17,500 square feet.

Schommer said he trusts the city has a plan to finance the portion for its needs, and those funds could go toward a shared facility — without raising taxes.

The issuance of municipal bonds, some of them tax-free, would be used to pay for initial construction costs. Revenue from the leased portion of the shared building would go toward paying off the cost of those bonds.

Asked about the funding mechanism, Mayor Gordon Adams wasn’t so sure a tax increase could be avoided.

“We can handle some of it from the current budget but not a whole lot,’’ he said, adding that the rest would have to come from property taxes.

“I would foresee limiting it as much as possible. We’re not trying to think of building a fancy building because it will raise taxes substantially,’’ he said. “A lot of the proposed tenants are not income-producing entities that can actually pay rent at market value.’’

The city, for example, gives $25,000 annually to Norfolk Area Recruiters.

“The money comes out of taxpayers’ pockets one way or another,’’ he said.

Schommer said he understands there may be some hurdles to overcome in what is being proposed, but he hopes the city will take a closer look at the concept.

“The city would want to be a very friendly landlord because ultimately it will own the building that these other agencies pay 49.07 percent of,’’ he said. “There’s no reason to make a killing off them if you want to help them out.’’

“I think we ought to look at this project more in light of how can we facilitate it to make it happen. If after we’ve done due diligence and it’s not feasible, we’ll go away. Until that day, you’re doing a disservice to the taxpayer by closing the door on this idea,’’ Schommer added.

The concept calls for locating the council chambers on the second floor of the building that also would have an elevator and 100-plus parking spaces. The Salvation Army and Bank of the West buildings would remain.

Future steps would include hiring a firm to do a master plan for the project and come up with a final design and actual lease-purchase costs, Schommer said.

The city council and mayor will continue discussions at a finance committee meeting Friday at 7 a.m. at the council chambers.