Norfolk Daily News

Friday – February 29, 2008

The numbers have been flying fast and furious in the debate over future office space for Norfolk city offices.

A spokesman for potential partners that want the city council to explore a shared building disagrees with estimates made by city staff in comparing costs of a shared office building on the Salvation Army parking lot vs. a city-only option.

The city says the cost of a shared building would be considerably higher — even after factoring in lease payments from the partners — than going it alone and buying the building that houses Nebraska Health and Human Services.

Tom Schommer, a spokesman for the partners, doesn’t see it that way.

Differences stem partly from the city using an estimate of $150 per square foot, which Councilman Jim Lange, a building contractor, has said is a solid — if not low — figure derived from the planned Nucor Detailing Center bid.

Schommer has an estimate from an architect of $115 to $125 per square foot and talked with building contractors who say $120 to $130.

At a recent finance committee meeting, Lange, who heads a Norfolk construction company, called a $125 figure completely unrealistic.

Another difference is what’s called the net-to-gross conversion factor accounting for shared space like hallways, meeting rooms and restrooms. The city uses a higher figure than that used by the partners, Schommer said.

In any case, it’s a bit like comparing apples and oranges because the city and Schommer haven’t been on the same page in another way.

At the council’s finance committee meeting last Friday, the city finance director analyzed the figures provided for a shared building. But those figures didn’t include the possible involvement of Nebraska WorkForce Development in a shared facility.

Although the work force development office in Norfolk is in the middle of an existing lease, representatives have expressed an interest in being part of a shared facility.

In an interview Thursday, Schommer said the numbers that city staff looked at didn’t include WorkForce Development, which would have an impact on the bottom-line cost.

Schommer said the partners also believe that city calculations for common space and square footage costs are skewed upward.

Schommer also said he has met privately with council members and the mayor to show them the partners’ numbers, which include an added 7,280 square feet for the state work force agency.

Randy Gates, city finance director, said he wasn’t given a chance to review those figures. He also stands by his analysis.

“The first time I heard of those numbers is just now,’’ he said Thursday. “If I had them before I sent (the analysis) out, I could have put them in there. The additional annual cost would go up, I’m guessing.’’

It could be as much as $1 million more, he said, using $150 per square foot. But another partner in the building also would add to the lease payments made to the city, Schommer said.

Schommer said he also disagrees that more parking would be needed across the street from the Salvation Army on the former KFC lot. He said the partners’ plan already would provide 126 parking stalls with other options available.

But Gates said that even more parking would be needed with the addition of the state agency, which has frequent visits from job seekers.

Schommer also said his numbers show the break-even point for lease payments by the partners to the city would be $9.77 per square foot and not $23.82 as estimated by the city.

“The partners would actually be subsidizing the city, paying for 49.07 percent of the cost of the facility, including site preparation,’’ he said, adding that he doubted a tax increase would be needed with the lease arrangement.

City officials have said otherwise and that a tax increase is likely.

The city has figured a two-story building with seven partner groups (not including WorkForce Development) on the Salvation Army lot could cost an estimated $5.79 million, while buying and remodeling the state-occupied building for the city alone could cost $2 million or less.

Schommer has estimated the cost of the shared building as high as $5.45 million and as low as $4.59 million, including WorkForce Development.

The disparities are all the more reason for the city to conduct a study on the issue, he said.

“By using a common area factor of 1.3 vs. city staff’s factor of 1.82 combined with a square footage calculation of $125 vs. staff’s calculated $150 per square foot, the overall costs are reduced by almost $2 million,’’ he said.
“This is reason enough to slow down the process and hire an architect and perform a real needs assessment and space requirement study.’’

Identified as potential partners are the Norfolk Area Chamber of Commerce and the groups inside its building, which are the Service Corps of Retired Executives, Madison County Convention and Visitors Bureau and Elkhorn Valley Economic Development Council. Also interested are Madison County, which could use the space for the probation office, Norfolk Area Recruiters and Nebraska Workforce Development.

How they differ
Differences stem partly from the city using an estimate of $150 per square foot as compared to $115 to $125 per square foot used by the group pushing for a shared building.

The city’s figures didn’t include the possible involvement of Nebraska WorkForce Development in a shared facility.

Differences remain on the number of parking stalls needed.