The financial benefits of a plan to build a new municipal service center outweigh the costs of the plan, the city’s development administrator told a city council committee.
The project would generate up to $ 5.7 million in new property tax revenue over 10 years, Alan DeLisle told the council’s utilities and infrastructure committee on Thursday as he took stock of the plan.
The city is working on a terms sheet and development agreement with a joint venture between Third Lake Partners and Echelon, the team that Mayor Rick Kriseman selected in February to build a new municipal service center and renovate the existing MSC. DeLisle said he hoped to bring the development deal to the Council “as soon as possible”, but declined to specify a date.
The municipal service center at 1 4e St. N. is an 11-story building, constructed in 1925, which houses municipal offices such as billing and collections administration, code compliance assistance, construction services, economics and development, finance and real estate and property management.
While details are still subject to change, DeLisle highlighted several aspects of the project:
- The city would sell the existing municipal service center to the Third Lake / Echelon joint venture for $ 12.5 million. This saves the city about $ 37 million in deferred maintenance costs on the existing MSC.
- Municipal staff would remain in the existing MSC rent-free for three years, while a new municipal service center is being built at the west end of a municipal parking lot at 2sd North Avenue in front of the Town Hall. The proceeds from the sale of the existing MSC would be used as a down payment on the new MSC. Locating the new MSC across from City Hall would improve the city’s efficiency and productivity by creating a municipal campus, DeLisle said.
- A new apartment building with a minimum of 20% housing units for the workforce would be located at the eastern end of the city parking lot across from the city hall. The workforce housing would be for individuals or families with a household income of 120% or less of the region’s median income and would remain a workforce housing for at least 30 years.
- A new parking platform with 400 to 550 parking spaces would be located between the new MSC and the new apartment building.
- Following the move of city staff to the new MSC, the Third Lake / Echelon joint venture would either renovate the existing MSC to 120,000 square feet of Class B office space or redevelop it with restrictions.
A redeveloped site should have 50,000 square feet of Class B office space. Class B office buildings have utility space without the high end finishes of a Class A development. They also have rents below. those of class A buildings.
A redeveloped site could also include housing for the workforce. Between the new apartment building on 2nd Avenue North and the redeveloped 4th and Center site, at least 31 percent of total housing is expected to be workforce housing.
The overall project would generate about $ 569,580 in new property taxes per year, DeLisle said. Including the sale of the existing MSC, the free rent, the housing value of the workforce, and the avoidance of deferred maintenance costs, he calculated a total financial benefit for the city of $ 58.2 million. dollars without including new property taxes, and $ 63.9 million including 10 years of property taxes.
The city would also have around $ 39.75 million in costs under the deal. The largest cost would be funding of approximately $ 33 million for the new municipal service center. Another cost would be to donate the city’s parking lot, valued at around $ 3.9 million, to the developers. In addition, there is a variance of $ 2.75 million between the appraised value of the existing MSC and the sale price.
Still, the benefits outweigh the costs, DeLisle said.
âIf we look at the value without property taxes, it’s about $ 18.5 million in favor of the city. If we look at the value with property taxes, it’s about $ 24.2 million in favor of the city, âDeLisle said.
City council chairman Ed Montanari, who sits on the utilities committee, said he sees the deal as five separate transactions – sell the existing MSC, lease it for three years, build a new MSC, build a parking lot and build a new building. He said that each transaction should be analyzed separately and that he wants more information on each of them.
The committee was not asked to make any decisions on Thursday, but board member Darden Rice, who chairs the committee, said she appreciated the update.
âWe have been discussing what to do with the municipal service building for years, and I think the opportunity to have a good financial deal for the city, to activate the dead space on Central Avenue and improve that corner, and the opportunity to have new workforce housing and new Class B offices right across from Town Hall – that’s very exciting for me â Rice said.
Let’s take a closer look: alternative plan for MSC
At the utilities and infrastructure committee meeting, board member Robert Blackmon reiterated a proposal he had previously raised. He wants to move most of the city’s offices from the current Municipal Service Center to the largely vacant Tangerine Square on the 18th.e Avenue and 22sd Street South, which Blackmon said would save taxpayer dollars and help neighborhoods around Tangerine Plaza.
âThat’s not what the community wants out there,â said DeLisle, the development administrator. âThey want a grocery store. They want affordable housing. This is what we are proposing. Regarding the MSC building, we want this proximity for greater interaction and greater productivity.
Blackmon garnered some support for his plan at the committee meeting, when Council member Gina Driscoll suggested it might be a good idea to expand some municipal services instead of concentrating them at MSC.
“Go department by department in this building and say what needs to be close to the town hall for better government and better communication with this proximity, and which services are more oriented towards the outside and the public which could be in more convenient places for everyone, âDriscoll said.