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Developer challenging selection process for new Lexington city hall

Cowgill Partners has proposed building a 180,000 square foot city government building at the corner of Martin Luther King Jr. Boulevard and Corral Street. Cowgill Partners is one of four developers who responded to a request for proposals to build a new city hall in Lexington.
Cowgill Partners has proposed building a 180,000 square foot city government building at the corner of Martin Luther King Jr. Boulevard and Corral Street. Cowgill Partners is one of four developers who responded to a request for proposals to build a new city hall in Lexington. Morris Workshop Architects

A Lexington development company says it will appeal a city committee's selection of CRM Companies to create a new city hall in the Lexington Herald-Leader building on Main Street and Midland Avenue.

In a letter dated June 11, lawyers for Cowgill Partners said the company's proposal to build a new building at the intersection of Martin Luther King Jr. Boulevard and Corral Street was the cheapest option and the lowest bid.

"On a per square foot basis, over the life of the lease, Cowgill's proposal is $33.16 square foot less than CRM's proposal," wrote James Frazier III and Jacob Walbourn, lawyers representing Cowgill Partners.

Over the life of the 35-year lease, that means Cowgill's five-story building was $33 million cheaper than CRM Companies' 218,000 square foot building, the letter said.

A committee of city employees scored four proposals for a new city government building based on several factors, including cost, maintenance and the qualifications of the bidder. In addition to Cowgill and CRM Companies, Pure Development and Municipal Consolidated and Construction LLC also responded to the city's request for proposals.

The committee announced it had selected CRM Companies at a June 7 council meeting. CRM has an option to buy the building that houses the newspaper, which would move to another location.

CRM's proposal would add a new city council chamber to the front of the Herald-Leader building and a police station and 800-parking space garage behind the building. The 35-year lease would cost the city about $5.1 million a year. After 35 years, the property would be owned by the city.

The Lexington-Fayette Urban County Council considered a developer's proposal to move city hall to the offices of the Lexington Herald-Leader in 2018. CRM Companies had proposed gutting and expanding the building.

It currently costs the city approximately $2.4 million a year to maintain its downtown buildings, though that cost is expected to escalate dramatically, the city has said.

Todd Slatin, the city's purchasing director, said CRM's proposal was the cheapest option because Cowgill's proposal only included a 200-parking space garage and did not include moving police headquarters from its current location on Main Street.

In contrast, CRM's proposal would move all city employees housed in five different downtown buildings into one building. The city could then sell those buildings, which would help offset the cost of moving to a new building, city officials have said.

"If you just compare the annual lease cost or the total of all the payments, then Cowgill’s proposal is the cheapest, but when you factor in the square footage you’re getting and the number of parking spaces, then CRM Companies is the cheapest," Slatin said.

Frazier and Walbourn said the city is confusing value and dollars.

"The difference is value verses hard dollars," said Frazier. "It's apples and oranges."

The Lexington-Fayette Urban County Council has not yet decided if it will award the bid to CRM Companies. During a contentious Tuesday meeting, the council ultimately decided to hold a public hearing on Aug. 14 to get more feedback from the public. The council will then determine if it should move forward with a memorandum of understanding with CRM Companies.

The council can not overrule the selection of CRM Companies by the committee. If the city wants to go with another developer, it would have to re-start the bid process, city lawyers have said.

If Cowgill Partners decides to pursue a challenge, the company will have to wait until the council makes a final decision, Slatin said. If the council decides against pursuing a new city government building, the challenge would be irrelevant, he said.

During Tuesday's meeting, some city council members expressed reservations about moving forward with a new city government center because of the cost. Some said they did not like the location.

Other council members have said the city's aging downtown buildings will cost too much to maintain over the next 20 years and that they are not user-friendly to the public. The city's operations are spread out over several government building, including the former Lafayette Hotel, the county clerk and police station and the Phoenix building on Vine Street.

The city has spent hundreds of thousands of dollars on consultants over the past two decades trying to find a new location for a centralized city government center.

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