City of Lawrence
City Manager’s Office
Mayor and Commissioners
Diane Stoddard, Assistant City Manager
Casey Toomay, Assistant City Manager
Brandon McGuire, Assistant to the City Manager
Toni R. Wheeler, City Attorney
Tarik Khatib, Chief of Police
David L. Corliss, City Manager
July 31, 2014
Agenda Items Related to the Construction of a New Police Facility
Pursuant to direction, work has continued on issues surrounding construction of a new Police Facility and the following items have been placed on the agenda for your consideration:
Additional information on each of these items is provided below.
Report from Treanor Architects
The Commission directed staff to work with Treanor Architects to identify what the City would be able to construct for $20 million as well as the potential for including Municipal Court in the design.
A report from Treanor Architects is attached. It summarizes the impact on the project if the budget is reduced to $20 million as well as the impact and costs regarding the option to add Municipal Court. The report also provides an updated project budget reflecting additional site development costs associated with the preferred site and includes a description of the contingencies included within the project budget.
Municipal Court Lease Payments. According to the report from Treanor Architects, the estimated cost of adding space for Municipal Court to the project is $2.6 million (assuming $216/sf.) The City pays approximately $118,000 in annual lease payments for the current location of Municipal Court. As discussed in the attached memo, this funding level would support a debt issuance of approximately $1.6 million meaning additional funding would be necessary if Municipal Court was added to the project.
Special Question Election Levying .25% Sales Tax
As directed by the City Commission at its July 22, 2014, meeting, the City Attorney prepared Resolution No.7083, calling a special question election for the purpose of submitting to the City’s voters the proposition of imposing a one-quarter of one percent (0.25%) special city retailers’ sale tax to fund the construction and equipping of a facility for the Lawrence Police Department.
As drafted the ballot question provides that the proceeds of the sales tax, if approved by the voters, shall be used only to finance the Police Department facility and its parking and infrastructure improvements and appurtenances. If general obligation bonds are issued to finance the Police Facility Project, the sales tax proceeds could also be used to pay the interest on the general obligation bonds and related financing costs.
The proposed ballot language in the Resolution includes a “not to exceed” amount that the Commission can determine, as appropriate. The Resolution provides that the collection of the sales tax will commence on April 1, 2015, and will terminate (a) upon payment of the fees and expenses associated with the financing, constructing, and equipping the facility or (b) after a certain number of years from the date such tax is first collected, whichever occurs first. This language is intended to impose the special sales tax until the facility is paid for, or a specific number of years, as determined by the Commission. (Please note, since it is a special sales tax, it must contain a termination date or “sunset,” and will expire after 10 years from the date such tax is collected, unless the sunset provides that it shall expire earlier.)
The Sales Tax Act authorizes cities to impose special purpose and general purpose sales taxes. The Resolution, as drafted, requests approval from the voters to impose a special sales tax. K.S.A. 12-189 requires that the purpose or purposes must be specified in the ballot question if the intent is to impose a special purpose sales tax. Resolution No. 7083 provides the sales tax proceeds will be used to cover the costs of constructing, equipping and financing the Police Facility. Resolution No. 7083 contains no additional language that would permit use of the sales tax proceeds for the general purposes of the City. Municipalities are authorized to include additional language in the resolution and ballot language designed to provide the municipality flexibility to use the tax proceeds for other general governmental purposes. To achieve that flexibility, a resolution calling the election may state that the proceeds will be used for the specific projects listed, “and for such other general governmental purposes as may be in the best interest of the city.” Such language would permit the municipality to apply proceeds collected in excess of the cost of the specified project to other needs of that municipality. Resolution No. 7083 contains no such additional language that would authorize the City to use proceeds from the proposed sales tax for projects other than the Police Facility Project.
If the Commission approves a resolution calling a special question election, staff will work with County Clerk, Jamie Shew, to place the approved ballot language on the November 4, 2014, general election. Mr. Shew advised that he must have the approved ballot language by September 1, 2014. The county and city clerks will cause a notice of the election to be published in the newspaper once each week for two consecutive weeks, with the first publication occurring not less than 21 days prior to the election. If the sales tax measure passes, (as determined by the official canvass of the election results) then the Commission must adopt an ordinance levying the sales tax. A certified copy of the ordinance levying the sales tax, a copy of the resolution calling the election, and certified election results are then furnished to the Department of Revenue’s Director of Taxation.
Letter of Intent to Acquire the Hallmark Site
After analyzing several potential sites in the community, the Commission reached consensus that the preferred site was the 47 acre site on McDonald Drive, currently owned by Hallmark Cards, Inc.. As was previously discussed, Hallmark was not agreeable to selling a smaller number of acres.
Hallmark has indicated it would likely enter into a purchase agreement contingent upon the successful passage of a sales tax referendum as more fully described in the attached Letter of Intent.
The letter sets forth some of the basic terms and conditions of a proposed purchase of Hallmark’s 47 acres by the City for development for a police facility, and other development opportunities described in this memo. While the property recently appraised for $2.6 million, the purchase price for the 47 acres would be $2,250,000.00. The purchase is contingent upon (1) approval by the City’s voters (as determined by the official canvass of the election results) of the police facility sales tax referendum; (2) approval by the City Commission in a public meeting of the Contract for Sale and Purchase of the Real Estate; (3) and the City being satisfied with the results of the City’s due diligence, title search, and survey work of the subject real property. The Letter of Intent also provides for the payment of earnest money, which can be applied to the purchase price if the special sales tax is approved. If the sales tax referendum passes, and the contract contingencies are satisfied, a closing would occur before December 22, 2014. Staff requests the Commission authorize the Mayor to execute the Letter of Intent to Purchase Real Property, if appropriate. We will then work on the acquisition documents and will commence our due diligence on the property.
Offsetting Acquisition Costs/Other Uses of Property
While the Hallmark site was the preferred site from an operational standpoint, its size, location, and price provided the opportunities to consider additional development on the site. There are a number of opportunities that we will continue to explore that could reduce the net cost of the land acquisition.
Sale of Remaining Acres. The draft site plan calls for 15.35 acres to be used for the Police Facility, leaving nearly 32 acres that could be sold to other parties. Any uses of the remaining property would need to go through the appropriate land use approvals but the City is already aware of several possible interests including:
· Five acres to USD 497 for warehouse/maintenance facility uses (see attached letter);
· Five acres on the southeast corner of the Hallmark site could offer a potential relocation site for Woody Park. The City understands that Lawrence Memorial Hospital has ongoing needs to expand parking at the hospital and would like the City to pursue the relocation of Woody Park. The Hallmark site would maintain access for neighborhood residents. If this is pursued, the hospital would fund replacement of Woody Park property and the construction of a new ball field; and
· Ten acres for a possible family fun center development (see attached letter.)
In addition, the Lawrence Boys and Girls Club has expressed an interest in the site as a possible teen center/headquarters location (see attached letter.)
Sale of Investigations and Training Center. If a new police facility is constructed, the City should sell the current Investigations and Training Center on Bob Billings Parkway upon moving to the new facility. City Staff does not believe that this building can be economically re-purposed for City uses and therefor the sale would be appropriate. These proceeds would offset some of the purchase price of the Hallmark site.
Judicial Law Enforcement Center. The Douglas County Administrator has indicated that while the County may not have a legal obligation to compensate the City its space at the current Judicial Law Enforcement (JLE) building (approximately 7,000 square feet occupied by LKPD), he believes the County may provide compensation if the Police Department vacated the JLE. This additional funding would also offset the purchase price of the Hallmark site.
Other City Property Sales. It may also be appropriate to consider the sale of other city property as well. Possible property would include a portion of park property at Overland and Wakarusa to USD 497 for a future school site, and/or vacant property at the southeast corner of Bob Billings Parkway and the new interchange at K-10.
Other Site Costs/Infrastructure Issues
There will be additional costs for the development of the Hallmark site, including a road/driveway off of Second Street, water, wastewater, storm drainage, etc.. Some of the costs should be shared by other users/purchasers of the 47 acres. Staff would recommend a special assessment benefit district be established for the financing of these costs. The special assessment costs would not be included in the total project costs for the police facility and would not be funded by the 0.25% sales tax.