Norfolk Daily News

Friday – February 22, 2008

Nolan: Shared Building Would Cost $2.39 Million More
Discussion continued Friday morning on what approach the Norfolk City Council should take on finding a new location for city hall.

Council members and Mayor Gordon Adams heard from representatives of groups interested in sharing office space with the city.

Randy Gates, city finance director, opened with an analysis of figures offered for constructing and leasing a shared building on the Salvation Army parking lot that would be twice as large as what the city says it needs just for itself.

Gates said the additional annual net cost to the city over 20 years would be $120,000 more than the cost to buy and remodel the Nebraska Health and Human Services building downtown just for city office space.

Estimates have been as high as $5.45 million for a new shared building on the parking lot. The owner of the state office building has been offered to the city for $1.4 million. After remodeling, total cost is estimated at $2.1 million or less.

Mike Nolan, city administrator, then distributed to the council a list of 22 considerations to take into account before pursuing a joint building. He said the city would be in the position of subsidizing the partners when there are other unmet city needs and expenditures ahead to improve Memorial Field and Ta-ha-zouka Park.

“There are a lot more important things than having a huge facility that allows us to co-locate with partners,’’ he said.

He said the real issues of who’s going to pay and what the revenue stream would actually be to finance a shared building haven’t been explored.

Another concern for Nolan: Shouldn’t the city expect to ask citizens to vote on any bond issue for a building that could cost as much $5 million?

Tops on his list of considerations is that co-location makes sense only if it’s less expensive for the city to do when compared to other options, the convenience to taxpayers justifies the increased expense and the council wants to subsidize the participants. A shared building would cost the city $2.39 million more over 20 years than other options, he wrote.

Another consideration is that any new or remodeled building will require a tax increase, which should be minimized.

Also speaking next about unmet needs in their departments were representatives of the city’s firefighters and police before Mayor Gordon Adams redirected the discussion to hear from others. He said the city is aware of budget constraints facing city departments and has made difficult decisions to hold the line on spending.

Builder Pete Becker of Zodiac Properties, which owns the state office building, said the lease, which expired Jan. 1, has been renegotiated but is in the agency’s Lincoln office awaiting a signature from the agency head. It contains a provision that either party can opt out with 18-24 months notice, meaning it could still be sold to the city.

No decisions were made Friday, but the council is facing a mid-March deadline on whether to exercise an option to buy the former First Christian Church building on North 13th Street for $650,000. The city figures it would cost $2.27 million to buy and remodel it just for municipal offices.

Council members also weighed in on what they would like to see happen next in the process.

If the city goes it alone, it can do that possibly without a bond issue, said Ivan Van Dyke, who added that the public should be allowed to decide if they want a bond issue for a joint facility.

Dave Fauss said the current city office is an embarrassment, but more study is needed to help the council decide and more dialogue is needed with the potential partners.

Dale Coy said he would like to see a space-needs study done and the church eliminated as an option. Responding to a question from Van Dyke, Coy said an architect told him a study could be done for $5,000 to $6,000.

But Mayor Adams said that the city did such a study in 1985, and he asked why it should be repeated. The next step, he said, is for the council to decide if it wants the church building and then if it wants to explore co-location or go it alone.

Jim Lange said the problem he sees is that the potential partners are more commercial entities than civic agencies and he could see “separation by outside wall” for them. Any new building, he said, would be at least a year into the future.

Karl Reeder said the council needs to decide whether the partners can be included under one roof with the city and that a study is important.

The potential partnering groups with the city are 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.