City Council Packet 2018 10-09-18 supplemental information
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Agenda Item Summary Memo
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Council Action Previously Taken:
Date of Action: Action Taken:
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Legal
Finance
Engineer
City Administrator
Human Resources
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Public Works
Parks and Recreation
Agenda Item Number
Public Works Committee #1
Supplemental Information
Tracking Number
PW 2018-71
Old Jail Demolition and Site Restoration RFP results
City Council – October 9, 2018
Majority
Approval
See attached.
Bart Olson Administration
Name Department
Supplemental Information – distributed 10/9/18
Summary
A supplemental memo with analysis of the jail proposal from the local citizens group.
Background
This is a supplemental memo to the October 3rd old jail memo. Since the October 3rd memo was
released, the citizens group has submitted a packet of information related to the old jail. This proposal is
included under the presentation section of the City Council packet.
In general, the proposal from the group is to lease the jail to the group for three years at a cost of
$1 per year and have the City commit to:
1) Removing the lead and asbestos in the building (estimated cost of ~$35,000)
2) Maintain insurance on the building during the lease (estimated annual cost yet to be determined)
3) Remove the debris from the garage area (can be done in-house)
4) Caulk the boarded up windows (can be done in-house)
5) Selling the building to the group at 80% of its current fair market value at the end of the lease
term
In exchange, the group proposes to:
6) Re-roof the entire building within 60 days from go-ahead from City (estimated cost of $20,000,
to be paid from group funds)
7) Repair and replace the gutters and downspouts within 60 days from go-ahead from City
(donation from roofing company)
8) Complete all masonry work and tuck-pointing by an undetermined deadline in 2019 (estimated
cost of $60,000, funding source to be determined)
9) Renovation of garage for use as theater/stage venue by an undetermined deadline (estimated cost
not known, funding source to be determined)
10) Repair mechanical systems by an undetermined deadline (estimated cost not known, funding
source to be determined)
11) Repair and replacing exterior, windows, doors, and porches by an undetermined deadline
(estimated cost not known, funding source to be determined)
12) Renovation of first floor for an undetermined use and tenant by an undetermined deadline
(estimated cost not known, funding source to be determined)
13) Create a fundraising campaign and submit for grants by an undetermined deadline (revenue
estimates not known)
14) Apply for the jail to be on the National Register for Historic Places
Memorandum
To: City Council
From: Bart Olson, City Administrator
CC:
Date: October 8, 2018
Subject: Citizen’s Group – Jail Proposal
Mayor Golinski and I met with Lisa Wolancevich and Robyn Sutcliff on Friday, October 5th.
We had a few questions related to sources of funding, business plan information and timelines for items
8 through 14 on the list above. The group has verbally mentioned they have a few thousand dollars from
current fundraising efforts, and have pledges for tens of thousands of dollars beyond their current funds.
The pledges itemized in the attached list, which were passed out to the City Council in July are a source
of uncorroborated information since the departure of Thomas Milschewski from the citizens group. We
have heard from sources within the group that anonymous pledges are still committed, and we have
heard from sources outside of the group that the anonymous pledges have withdrawn. The anonymous
nature of the pledges means that we cannot confirm with the parties directly.
The group has committed to funding the roof work (#6) from existing funds and pledges within
60 days, and the roofing company has agreed to donate time and materials to #7 on the list. The tuck
pointing and masonry work in Spring 2019 is somewhat unconfirmed, in that the cost of the work is
estimated at just under $60,000 and the group has one confirmed grant for $10,000 to put towards this
line-item, one potential grant which they have received verbal assurances of future receipt in the amount
of $5,000, and the remaining $45,000 in costs to be offset by other undetermined grants and pledges.
All other costs for the renovation of the building are to be fundraised by the group, utilizing
undetermined grant programs and historical tax credits.
The group will dive into the various building issues once it has permission from the City to do
so, and they assume that the garage area can be turned into a theater which will host plays, live music,
and other performances. The group has not identified any musical acts or theater groups at this time, nor
have they estimated the potential revenue from those performances.
The lease agreement arrangement posed by the group contains a right-of-first refusal type
arrangement. At the end of the agreement, the group requests that the building be sold to the group for
80% of current market value (i.e. pre-renovation). The City has not completed an appraisal of the
building recently, but the City purchased the property in 2010 from Kendall County for $160,000.
While that purchase included the land where the parking lot currently sits and the group does not wish to
buy the land that the parking lot sits on, we think that $160,000 is a good ballpark figure of current
market value. 80% of this value is $128,000; should the City Council move forward with a sale or lease
agreement with any group, staff would propose to do an updated valuation at that time. The proposal
also comes with a repayment clause, applicable to all renovation costs the group puts into the building
but to be triggered only if the City chooses to sell the building in the future to a different group. The
citizens’ group confirmed that if the City chooses to keep the building under City ownership in the
future, the renovation costs would not need to be repaid to the citizens’ group.
The City also had a structural engineer walk through the building a week ago, and their
walkthrough report was submitted to the City late last week. The structural engineer observed many of
the same issues from the EMG report and the Berglund Construction report. Some additional new
pieces of information they provided were:
A. Some of the subfloor and floor joists on the first floor of the old part of the building have rotted
and would need to be replaced (cost unknown)
B. He is concerned that some of the second floor joists in the old part of the building may be
impacted by the roof leaks. He could not confirm through his surface visual inspection.
C. The first floor support structure in the basement is undersized and includes temporary jack-post
columns in an odd configuration. This could be evidence that the first floor in the old part of the
building previously had issues. These undersized beams and temporary columns would have to
be replaced with W8 steel beams, 3” pip columns, and individual spread footings (cost
unknown).
D. He noted that the original jail building was built as residential construction with the exception of
the actual jail cell area. Any change in the use of the building would require a much higher floor
capacity. Residences are typically designed for a 40 PSF live load. If the use were to be changed
and opened to the public, a live load capacity of 100 PSF would be needed because of the change
in use. This would require a substantial reinforcing/rebuilding of the floor structures.
Steve Raasch provided the above summarized bulletpoints, and added the following narrative: “The
total costs for the work above could run into upper tens of thousands, to over $100,000 in repairs or
replacements. Some of this work would also require structural engineered studies and drawings before
the work could be sent to a formal RFP. I have requested a cost and list of additional items that would
be included, if the City chose to obtain a more in depth structural study of the buildings.”
Recommendation
Staff requests feedback on the citizens’ group proposal and whether the City should entertain
direct negotiations with the group, open the sale or lease of the building to other parties, to proceed with
demolition, or to let the building sit, as is.