Marking a significant cost increase from earlier estimates, Kent will borrow over $9 million to build a new city hall, which may still not completely cover the cost of the project.
But with interest rates low and construction prices showing no signs of abating, city officials said it was not reasonable to delay: On Dec. 15, City Manager Dave Ruller signed an $8,797,000 contract with Thomarios, a Copley general contractor, which placed the lowest bid for the project. View the project bids.
The contract with Thomarios allows for a 10% contingency, meaning the builders can actually bill the city up to $9,676,700. A representative from the company could not be reached for this article.
Because the city is only issuing a bond of $9.13 million, Kent may turn to its general fund or possibly to money from the American Rescue Plan Act, Finance Director Rhonda Hall said.
“The bond issue of $9.13 million was set before the bids were received, and we feel it is sufficient to cover the majority of the building costs,” she added.
The 27-year bond functions like a mortgage with a 2% interest rate. Actually 2.000942%, and faced with a Fed poised to increase those rates, city council was eager to act as soon as possible, Council Member Roger Sidoti said.
In December 2019, the city engineer’s office estimated the city hall would cost about $7 million. But a perfect storm of Covid-era complications has led to steep increases in construction costs. The city had to put the project out for bid twice because no contractors could meet the initial price requirements.
“The bids were higher because of the cost of materials and the supply chain issues that have been going on nationally as well as potentially also concern of the amount of workers available to do the work,” City Engineer Jim Bowling said. “It’s just a very uncertain time at the moment trying to get materials with Covid and different industries having trouble producing the products needed to build the building.”
City Manager Dave Ruller said cost increases have topped 1,000% in some instances. But he said this bad news is offset in part by interest rates that have been kept at historic lows.
“So even though it’s a more expensive building, the monthly payments will be less,” he said.
The 10% contingency is “standard practice in political subdivision contracts,” Kent Law Director Hope Jones said, explaining that “there are always real-time issues that were not contemplated by the parties that could come up.” Having that leeway allows the project to proceed without council having to appropriate more money.
The city hall project started in 2016, when council first began to consider building a place to call home, Sidoti said.
Kent has never had a proper city hall. Council meetings have been taking place in the basement of Kent’s main fire station. Other departments are spread across the city, mostly at 930 Overholt Drive (Budget and Finance, Community Development, Economic Development, Information Technology & Communications, Service Department), but also at:
301 S. Depeyster St. (City Manager’s office, Police Department)
320 S. Depeyster St. (Fire Department, Human Resources, Law Department)
Kent Central Gateway PARTA Building at 201 E. Erie St. (Health Department)
“While it appears to run smoothly, there is inefficiency and difficulties created by the lack of space,” Bowling said.
The process started with exploring what other cities have, and then determining — with community input — what Kent’s needs are, where the structure could be placed, how it could be paid for without asking taxpayers for a tax hike and, finally, embarking on the design and bid processes.
Covid set the whole project back a year and a half and has opened council’s eyes as to real-world prices for a building meant to serve Kent for a century, Sidoti said.
Thanks to the lower interest rates, though, the city will get more bang for its buck — meaning a larger building — than would have been possible even four or five years ago, he added.
Construction crews will not be breaking ground anytime soon. While the city’s contract stipulates a deadline for project completion (The Portager was unable to clarify whether it’s 20 months or two years), Bowling said the clock has not yet started ticking. First on the agenda is a not-yet-scheduled “pre-construction meeting” with Thomarios, during which city officials and the contractor will review the timeline to ensure it is reasonable.
Service Department administrative assistant Sheri Chestnutwood said the meeting may be held before the month is out.
Once completed, the multi-story, 27,000-square-foot building will front onto Haymaker Parkway, with parking off Day Street, Bowling said. It will house the Budget and Finance Department, the Mayor’s and City Manager’s offices, the Law Department, Human Resources, the Civil Service Department, Economic Development and Council Chambers.
Kent’s Health Department will stay on the second floor of the Kent Central Gateway PARTA building downtown, and the Service and Community Development departments will remain where they currently are housed, in a city-owned building at 930 Overholt Drive, Bowling said.
Council Member Robin Turner said the nation’s ongoing battle with Covid may not make this “the most propitious time” to plan such an ambitious project, “but the reality is from a financial standpoint, you couldn’t get in on a lower market than this. We actually are coming in with a very low interest rate, and eventually we’re going to need a new city hall. Why not now?” he asked.
The new building, he said, will be a “good fit” with Kent’s revitalized downtown.