What is the cost to the taxpayer for this development?

Our current cost estimates are as follows:

Police building: $14-$16 million  

Furniture, fixtures, equipment and technology (FFE&T): $2.4 million

City Hall:  $9-$10.5 million /  FFE&T: $1.575 million  

Parking Structure: $14-14.5 million

Park and site improvements: $9.75-10.75

The city will spend another $900,000 on construction management and about $581,000 on bond issuance costs.

All of these numbers are estimates.  No portion of the project has been bid yet.  That said, the numbers for the police building are based on detailed plans, whereas the numbers for City Hall are based on standard construction costs per square foot.  The city does not have plans for City Hall yet.  The parking structure is very similar to the one the city currently has under construction, and the city has recent bids on it that verify the standard cost estimate.

The parking system will bear the full cost of the parking structure and receive all of the revenue it earns.  The city will probably use revenue bonds as with the new structure at Center St and 11 Mile.  Revenue bonds only pledge the revenue of the parking system, not tax revenue, as security to the bond holders.

The annual debt service on the other three components is estimated at $2.4 million per year for 25 years.  The city manager is recommending the DDA pick up the debt service on the park, which is estimated at $737,000.  That leaves about $1.6 million to the general fund for City Hall and the police building.  That sounds like a lot of money, and it is, but the city’s OPEB and pension bond issue is saving the city $2.5 million per year, the new buildings will have lower utility and maintenance costs, and will reduce staffing needs.

The type of bond the city will issue is called a “limited tax general obligation bond.”  That means bondholders have a claim on existing (already authorized) taxes and other revenue, but the city cannot issue any additional taxes to pay the debt service.  In other words, there will be no tax increase as a result of this project.

Show All Answers

1. Where are we at with this development?
2. What can you tell us about the proposed office building?
3. Can’t city facility issues be fixed? Why not just repair the existing building?
4. What do you hope to accomplish with a new City Hall facility?
5. What are the possible sites for City Hall?
6. Was combining City Hall with the police station ever considered?
7. Did you ever consider sites outside of the Central Business District?
8. Will general parking fees across the downtown have to be raised to meet debt service for a new deck?
9. What is the cost to the taxpayer for this development?
10. Why are there are not going to be public open bids since taxpayers’ bond risk is funding?
11. How come the city is not bringing in multiple companies and citizens to present alternative proposals to be debated?
12. Will the public be invited to give input/feedback on the new central park?
13. How will construction costs of a park be paid for, and does the city have enough revenue to pay for maintenance costs once it is built, without a parks millage?
14. Will parking spaces be lost?
15. Where will the physically disabled and senior citizens park?