Lexington city government wants a new home.
The Lexington council gave its approval Tuesday to issue a request to developers for a new city hall. Currently, the city has employees in five downtown buildings including the current government center in the former Lafayette hotel. Other city buildings include the Phoenix building on Vine Street, another building attached to the government center, the annex and the police station on Main Street.
Sally Hamilton, the city’s chief administrative officer, said during a Tuesday Lexington council work session that after receiving proposals the city might hire a consultant to evaluate whether moving several of the city’s operations under one roof and leasing space would be cheaper than the nearly $4 million the city currently spends to operate the five buildings.
Hamilton said the request for proposal will be for a building that is more than 150,000 square feet. That would allow the government to move employees in many of its buildings under one roof. The city would prefer a lease with the option to own, she said.
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The city has been debating whether to move for decades and has spent hundreds of thousands of dollars on consultants to try to find a suitable home. That effort gathered steam in recent years as the cost to maintain the government’s buildings climbs. It costs more than $1 million each year to run the current government center, which opened in 1918. It costs the city $3.9 million annually for all five downtown buildings, a May consultant’s report found.
Most recently, the city looked at buying the current Lexington Public Library on Main Street. But a consultant’s report in May found that building is too small to meet the city’s needs.
“There is a developer out there who has a footprint ... that is close to downtown,” said Councilman Fred Brown during Tuesday’s meeting.
CRM Development Corporation has an option to buy the Lexington Herald-Leader building on Midland Avenue and Main Streets. Craig Turner, of CRM, has said a zone change is needed for the four-story building that currently houses the newspaper, the United Way of the Bluegrass and two other companies.
Turner has previously said he was looking at either one large tenant or several smaller tenants for the building that will remain professional office space. Turner was not immediately available for comment Wednesday.
City officials also said Buddy Cowgill, who owns vacant property on Martin Luther King Boulevard a few blocks from the current city hall, has also approached the city about building a new city hall.
There are likely others, city officials said.
“I think there are several developers that may have interest,” Hamilton said.
But Hamilton cautioned the city would have to analyze its options carefully and that’s why someone who specializes in cost analysis will likely be hired. City officials have repeatedly said the city’s budget will be tight as the city’s tax revenues remain flat after years of growth. The city is also bracing for a steep jump in its pension payment to the state as the state legislature mulls possible changes to shore up a ballooning pension debt.
“We still don’t know what’s happening with the pension,” Hamilton said. “All of this would have to be weighed with what will it cost to stay here.”
The city’s current buildings on Main and Vine streets are older. An earlier report put the combined differed maintenance for all downtown buildings at $22.4 million. Deferred maintenance on the Lafayette hotel building alone is $16.9 million.