After decades of debate and multiple false starts, a deeply divided Lexington council voted Tuesday to move forward with a resolution authorizing the city to negotiate with a private developer for a new city hall.
The Lexington-Fayette Urban County Council deadlocked in a 6-to-6 vote during a council work session, forcing Mayor Jim Gray to cast a rare tie-breaking vote to enter into negotiations with CRM Companies.
The resolution authorizing the city to start negotiations with CRM will go on the agenda of the council’s Aug. 30 meeting. A final reading would come Sept. 13. Eight votes are needed for final passage.
CRM has proposed renovating and expanding the Lexington Herald-Leader building at the intersection of Main Street and Midland Avenue. The proposal includes a police station and an 800-space garage at the back of the building. There also would be a new council chambers in front of the current building.
CRM Companies is headed by developer Craig Turner. The company has an option to purchase the building from the newspaper, which would move to another location.
Vice Mayor Steve Kay said approving the resolution is only a first step, noting that the council would still have to approve any final contract the city negotiates with CRM.
“This is the early stage of what will be fairly long process,” Kay said.
Councilman Jake Gibbs said he opposed the location and questioned whether the city should use a private developer to build a new government center.
“This proposal crams city hall into a corner of downtown,” said Gibbs, whose district includes most of downtown and the Herald-Leader building.
He said the intersection of Main, Vine and Midland is one of the most dangerous intersections for pedestrians, bikers and motorists in the city and expressed concern about increasing the amount of traffic there.
“We are also relinquishing control,” Gibbs said of the public-private partnership. “I think we should have more public discussion.”
Councilwoman Susan Lamb said she opposed a new city government center because she doesn’t think the city can afford it. The city’s pension costs continue to climb and there does not appear to be an increase in tax revenue to pay for a new city government center.
“If we don’t have any new revenue, then something is going to have to be cut,” Lamb said.
Councilman James Brown said he thought the city should look at city-owned land before moving forward.
Others said the the city been exploring its options for years and it’s clear that a lease-to-own deal with a private developer will be cheaper.
“The longer we wait to get a final proposal the more it will cost,” said Councilman Kevin Stinnett, noting that interest rates continue to go up. “We can not afford to stay here.”
If the city built its own government center it would likely cost $6.9 million a year in debt payments, which is more than it will cost to lease from a private company, Stinnett said.
Mayor Jim Gray said the city’s buildings are “being held together with Band-Aids and bailing wire. Conditions in some respects are dangerous.”
The city has five downtown buildings: the government center on Main Street, which is the former Lafayette Hotel, and an attached building; the Phoenix building on Vine Street; and buildings on Main street that house the county clerk’s office and police station.
CRM’s proposal would move all employees in those five buildings under one roof, allowing the city to sell its existing properties.
The cost would be $5.1 million a year for 35 years. After that, the city would own the building.
The city currently spends about $2.42 million to run its five downtown government buildings, but it faces escalating maintenance costs. One estimate put the total amount needed to repair the five buildings at $22 million.
Councilman Joe Smith said the city should at least start negotiations. “A lot of time has been put into this effort,” Smith said. “We need a new building. There is no question about that.”
Other council members expressed reservations about the unknowns.
“I’m concerned about the properties that we own downtown,” Councilwoman Jennifer Mossotti said. “I think I would feel more comfortable if I had more answers.”
Finance Commissioner Bill O’Mara said there are many details that still need to be negotiated, including the number of parking spaces and how big the building will be. Those changes could affect the final price, he said.
CRM Companies was picked by a selection committee of city employees over three other bids from private companies. The other bidders included Cowgill Partners, Muncipal Consolidated and Construction, and Pure Development.
Cowill Partners, which had proposed building a new 180,000 square foot government center on now-vacant land at Martin Luther King Jr. Boulevard and Corral Street, has previously written the city saying it will challenge the committee’s choice. The company claims that its proposal is cheaper.
Last week, the council held a public hearing to gather public input on the CRM Companies’ proposal and the Herald-Leader site.
How they voted
Those who voted for the resolution: Steve Kay, Joe Smith, Amanda Bledsoe, Bill Farmer Jr., Fred Brown and Kevin Stinnett.
Those who voted against the resolution: Jake Gibbs, James Brown, Richard Moloney, Jennifer Mossotti, Peggy Henson and Susan Lamb.
Three council members recused from the vote: Angela Evans, Preston Worley and Kathy Plomin. Plomin recused because her husband is a contractor. Evans and Worley work for McBrayer law firm, which represented another bidder for the city hall project.