TREASURE ISLAND — The city is negotiating with owners of the four-story, 61.78 feet tall Allied office building at 10451 Gulf Blvd. to purchase the structure for a future city hall municipal services complex.
City Manager Garry Brumback confirmed preliminary talks are taking place. He added there will be many public hearings before city commissioners are asked to take a supermajority vote on whether to acquire the 37-year-old property, which has also been called Jirgen’s Executive Center.
The currently occupied building is north of Treasure Island Publix and 104th Avenue and south of 105th Avenue. The city manager said it is too early to determine how any new city hall municipal services complex will be designed, but purchase and renovation is estimated around $8 million. City officials don’t expect to raise property taxes to finance the project.
Brumback added exactly what will happen to the current city hall site has not been decided; those plans are all down the road.
During a commissioner work session May 7, Finance Director Amy Davis said as an initial step toward the purchase, the commissioners will vote to authorize issuance of bonds in the principal amount not to exceed $8 million for the city hall purchase and renovation.
A purchase agreement for the property is expected to be presented at the next City Commission workshop May 21, Davis added.
This latest proposal comes on the heels of a public outcry against an earlier plan to relocate city hall and municipal services to the Community Center Park, with other city services.
“Last year, the Facilities Plan Project was put on hold after feedback from the City Commission and residents opposing several of the conceptual ideas presented for new city facilities,” Davis said. “One of the major items of disagreement and opposition was having the city facilities placed within the Community Center Park.”
“The City Commission challenged staff to come up with alternative ideas for consideration, and as a result the project was placed on hold indefinitely. Since that time the potential to purchase an existing property, with a building that is large enough and can be renovated to serve the purpose of a City Hall, has presented itself,” she said.
Consultants reported last summer the city’s current buildings have outlived their usefulness, are cramped, provide poor air quality, are not secure, suffer from leaky roofs and mold and are not up to modern hurricane proof design standards.
To acquire the Allied Building, “the city will have to obtain a loan to purchase and renovate the property; in working with our financial adviser, staff has determined that issuance of tax-exempt debt through a bank loan is the most appropriate vehicle for raising funds,” Davis said.
To begin the process of obtaining a bank loan the city has to approve an ordinance authorizing the issuance of the note and begin a bond validation process. The bond validation process is expected to take approximately four months to complete.
“The ordinance includes a not to exceed amount, however, the actual costs could be less,” she said.
The not-to-exceed amount of $8 million includes the purchase and renovation of the property, and the debt issuance costs.
In working with the city’s financial adviser, the interest rate will be determined by resolution of the City Commission in October before the issuance of the note. The term of the note will not to exceed July 1, 2035, Davis advised.
In September or October, the commission will be presented with a supplemental resolution to the ordinance to approve a bank and loan, after which an expected closing on the property would immediately follow.
She explained it is expected no more than a recurring revenue increase of the equivalent of 0.25 mills will be necessary to replace the non-ad valorem revenues needed to meet non-debt service expenses and pay the debt service obligations of the new loan.
“It is important to note that the city will not be required to raise taxes. It could raise non-ad valorem revenue instead, or reduce expenditures as other options,” Davis said.
The cost to the city for the approval of this ordinance will be the bond counsel’s fees for the bond validation process, estimated to be between $15,000 and $20,000, if uncontested and unappealed.