Memorandum 18-010 HERC Joint Worksession

Memorandum 18-010

TO:                        Mayor Zak and Homer City Council  

FROM:                 Katie Koester, City Manager

DATE:                   January 3, 2018

SUBJECT:          HERC Joint Worksession

The purpose of this memo is to address questions posed by members of the Council and Commission in anticipation of the January 8 joint PARCAC and City Council work session on the Homer Education and Recreation Complex (HERC). In addition to this memo, a “HERC workbook” has been complied with relevant documents. The workbook is meant to be a comprehensive resource for Councilmembers, Commissioners and the public on all things HERC in an effort to aid the discussion regarding the future of the property.

1) In recent years we have had two building assessments completed. The two assessment had completely different goals for being conducted and resulted in very conflicting results. We would like to know how we can unite those two documents to address bare bones renovation of the HERC, creating an Educational-Recreational facility that can be utilized by the public. Can we just address the Fire Marshall issues, electrical, mechanical, ventilation, water concerns and perhaps heating with gas? Or are there other concerns that must be addressed to make this building available for public use?

In 2012 Klauder & Company Architects, Inc. was hired by the City to evaluate the condition of the existing HERC building “to indicate building modifications that would be required to make the building code complaint and ADA accessible based on the proposed future use” (p.1) At the time of the report, the proposed future use included “continued use of the lower level by the Boys and Girls Club as well as use of the upper level as a community recreation and for public use, public weight/exercise room, and rental rooms for community projects. The upper level would also house the Community Schools Program” (p.1). Klauder concluded that “the cost of a complete renovation of this building will most likely be the same cost per square foot for construction of a new building” (p.5). The cost estimate for this project came in at a staggering $10,334,475, or $489/square foot.

In 2016 Stantec was hired to “examine the potential reuse of portions of the building [HERC] to provide space needed in a new Homer Police Station” (p.iii). This analysis draws some very positive conclusions about the overall strength and integrity of the building. Stantec estimated that reuse of the HERC for the non-essential police station space was between $75-$200/square foot versus $400/square foot for new construction. Key to their findings was that the estimate “assumes that electrical, data communication and heating utilities would come from the new police station facility and only be upgraded or replaced to the minimum functional need” (p.iii). The estimate also assumed repurposing the HERC as non-essential space that would, for the most part, not be open to the public. Code and accessibility improvements for a public space would need to be considered.
 

2) What is the cost of doing nothing? For years now we have neglected this building, and we are seeing the impact of this neglect. We must address the issue of this vacant building. What is the price tag that we will eventually have to pay for doing nothing?

The cost of demolition was estimated in 2013 to be $450,000. The cost of demolition or renovation will only continue to escalate as construction costs increase and maintenance of the facility is minimal.

In the meantime, keeping the facility in warm status (55 degree heat with use of the gym only for Community Recreation) is budgeted at $44,928 for 2018. However, 2016 actuals came in at $36,362 due to an unusually warm winter and measures building maintenance has taken to shut down entire sections of the building.  The last time the building was fully occupied (temporary City Hall upstairs and Boys and Girls Club downstairs) was 2012 and the actual operating cost of the HERC was $75,245. This operating cost captures the efficiency of a new boiler that was installed in 2009, but the building has not been converted to natural gas. In 2013 converting HERC 1 (the larger facility) to natural gas (without the cost of the assessment) was $25,000. The cost of heating oil at the HERC is budgeted at $21,000 in 2018.

3) The advantages of this facility is the fact that it not only has a gym facility, but it has classroom and office space. What is the cost of recreating a facility of this nature verses renovation?

The current going rate for new construction in Homer is $400 a square foot. The HERC is 16,800 square feet. That puts a new facility of similar size at $6,720,000 plus design, contingency and site development, inspection, project management and 1% for the art which would add significantly to the total cost.

Klauder & Company estimated the cost of a complete renovation of the HERC at $10,334,475 in 2012.

4) What are the actual costs to the city for the HERC building, minus the Maintenance Building costs?

Based on an analysis of previous year’s budget and estimate’s for 2018, HERC 2 (the maintenance building) accounts for about 25% of the costs associated with maintaining the property. This does not include any significant repairs.

5) Can we rent the space to tenants to cover some of the operational cost?

In the past the City has leased space to both the college and the Boys and Girls Club. Managing tenants would probably depend largely on a) capacity of the City to manage the facility; b) fire marshal approval taking into consideration the improvements that would be needed for a change of use versus the existing use and c) insurance requirements (listing the city as additionally insured on a tenants policy, for example).