Fayette County

Is it time for a new city hall in Lexington? You can weigh in Tuesday.

Take a tour of Lexington’s proposed new city hall

The Lexington-Fayette Urban County Council is considering a developer's proposal to move city hall to the offices of the Lexington Herald-Leader. CRM Companies would gut and expand the building.
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The Lexington-Fayette Urban County Council is considering a developer's proposal to move city hall to the offices of the Lexington Herald-Leader. CRM Companies would gut and expand the building.

A new city government center has been discussed for decades in Lexington.

During that time, the city has spent more than $300,000 on studies and consultants to help it find a new home. But various sites over the years — including the Lexington Public Library on Main Street — have been nixed.

Is it finally time for a new city hall?

On Tuesday, the public can weigh in on the latest proposal — moving more than 800 city employees into one location, the Lexington Herald-Leader building at Midland Avenue and Main Street. CRM Companies is proposing to renovate and expand the building to include a police station and an 800-space garage on the back of the building.

The meeting is at 5 p.m. Tuesday in the council chambers of the 100-year-old government center at 200 E. Main St.

The proposal would cost the city more than $5.1 million annually for 35 years . After that, the city would own the building. CRM’s proposal was selected over three other proposals by a committee of city employees.

Vice Mayor Steve Kay said the Lexington-Fayette Urban County Council will not take a vote on the proposal after the public meeting Tuesday. Kay said he could not speak for the entire 15-member council but “I think there are a lot of council members who want to hear from the public and see what they have on their minds and what the public wants to see happen.”

Kay said if the council wants to move forward with the proposal, a motion would be made at the Tuesday Aug. 21 council work session.

All 15 council seats are up for re-election in November. Councilwoman Amanda Bledsoe, who represents the 10th Council District, is the only council member with no opposition. Councilwoman Peggy Henson, who represents the 11th Council District, is retiring at the end of the year. At-Large Councilman Kevin Stinnett also will leave the council at the end of the year.

Some on council have questioned whether the city should wait until a new council and a new mayor is elected in November before committing city money for the next 35 years.

Mayor Jim Gray leaves office at the end of the year. Either Linda Gorton, a former vice mayor and longtime city council member, or Ronnie Bastin, a former Lexington police chief and public safety commissioner, will replace him.

Both said they aren’t opposed to the council voting on the issue.

“I’m neutral,” Gorton said of a potential vote and the CRM Companies’ proposal. “Mayor Teresa Isaac proposed a new government center, Mayor Jim Newberry proposed a new government center. I sat on one of the RFP committees for Mayor Gray for a new government center. It is needed. The deferred maintenance costs in those buildings continue to climb. “

Bastin refused to say whether he backed any of the proposals.

“My position is that the council has set up a procedure and they are following that procedure,” Bastin said. “I think it would be unfair to interject myself.”

LFUCG New Government Center CRM Companies - EOP Architects
CRM Companies has proposed renovating and expanding the Herald-Leader building at the corner of Main Street and Midland Avenue for a new city government building. EOP Architects

Crunching numbers

The city currently spends about $2.4 million annually on its five downtown buildings — the former Lafayette Hotel that now functions as city hall, an adjacent building, the county clerk’s office and police station on Main Street, and the Phoenix building on Vine Street.

Those buildings have about $22 million in deferred maintenance needs.

Moving city hall would become less expensive than maintaining its existing buildings in the fifth year of the lease, city officials have said in documents and presentations before the council. That savings is based on an assumption the city would borrow $22 million to fix all of the problems in the five buildings.

There also are several unknowns. There is no cost estimate yet for moving more than 800 employees or for other fit-up costs, such as new furniture or a new phone system. Also not known: how much the city could generate if it sold its five properties, which are in the heart of downtown.

Craig Turner, of CRM Properties, said the city would have at least two years to figure that out because it will take that long to renovate and expand the current Herald-Leader building.

Turner said the public-private partnership also guarantees a set amount of money each year for maintenance and operations. That money is set aside in a trust. If CRM Companies fails, the money will be there for maintenance, he said.

“When cities need cash, they often deffer maintenance on their own buildings,” Turner told a group of nearly 90 commercial property owners and managers at a meeting on Wednesday.

Parking Authority woes

Officials with the Lexington Parking Authority, which operates four public parking garages, told city officials in a letter dated Aug. 9 the authority would lose more than $500,000 each year from city employees that park at its garages if the city moves into the Herald-Leader building. That’s on top of more than $200,000 it expects to lose from parking meters on streets the city transferred to the University of Kentucky earlier this year.

The letter, signed by Gary Means, the parking authority executive director, said a dramatic cut to its revenue will result in severe cutbacks for the authority, which does not receive any city appropriations. It likely won’t be able to make repairs to its garages and it won’t be able to purchase or construct any new public parking garages in coming years. A recent engineering report showed its four current garages need an additional $13 million in repairs and changes over the next 20 years.

Residents of Bell Court, the neighborhood closest to the Herald-Leader building, have had two meetings with Turner and CRM Companies over the past several weeks. Residents there have mixed feelings about the proposal.

“The concern of the neighborhood has been the impact on traffic, not just the traffic to and from the building but the potential displacement of traffic trying to avoid the area all together,” said Sara Hesley, president of Bell Court Neighborhood Association.

Turner said he will not allow access to Indiana Avenue, which runs along one side of the Herald-Leader building and into Bell Court. There will be two loading docks that will back onto Indiana, but they will be set back into the building so there will be enough clearance to load and unload trucks, Turner said.

The plans also call for possibly two new stop lights on Midland Avenue — one at Short and Midland and possibly a second at Shropshire and Midland that would accommodate people entering and exiting the parking garage, Turner said.

“There is a diversity of opinions,” Hesley said. “We have not taken a vote as a neighborhood association. There is no clear consensus.”

Councilman Jake Gibbs, who represents Bell Court and much of downtown, said he’s torn.

“I am going to vote no,” Gibbs said. “But I also see the benefits and have tremendous respect for people who support it. “

Who is the lowest bidder?

There is another potential wrinkle.

Cowgill Partners, one of the other bidders, has sent a letter to the city saying it plans to challenge the city’s decision to choose CRM Companies.

Cowgill Partners, which is run by developer Buddy Cowgill, also sent letters to council members and other commercial developers questioning the city’s decision.

Lawyers for Cowgill Partners contended in a June 11 letter to the city that it was the lowest bidder — about $33 million less over 35 years. Cowgill had proposed a five-story city hall at the corner of Martin Luther King Jr. Boulevard and Corrall Street.

City officials, however, have noted that CRM Companies’ proposal included an 800-space garage. Cowgill’s proposal only included 200 spaces.

Cowgill’s proposal also did not include moving the police and clerk’s office to the new building. It’s original proposal also made the city responsible for all maintenance and operation costs.

The council can not overrule the selection committee or its scoring. If the council votes against CRM Companies’ proposal it can not go with Cowgill or the two other bidders — Pure Development and Municipal Consolidated and Construction LLC. Those two proposals included tearing down the clerk’s office and police station and building a new government center at the corner of Main and Martin Luther King Jr. Boulevard.

The project would have to be put out to bid again.

CRM has an option to buy the Herald-Leader building. If it becomes the new city hall, the Herald-Leader would move to another location.