Our current cost estimates are as follows:
Police building: $14-$16 million
Furniture, fixtures, equipment and technology (FFE&T): $2.4 million
City Hall: $9-$10.5 million / FFE&T: $1.575 million
Parking Structure: $14-14.5 million
Park and site improvements: $9.75-10.75
The city will spend another $900,000 on construction management and about $581,000 on bond issuance costs.
All of these numbers are estimates. No portion of the project has been bid yet. That said, the numbers for the police building are based on detailed plans, whereas the numbers for City Hall are based on standard construction costs per square foot. The city does not have plans for City Hall yet. The parking structure is very similar to the one the city currently has under construction, and the city has recent bids on it that verify the standard cost estimate.
The parking system will bear the full cost of the parking structure and receive all of the revenue it earns. The city will probably use revenue bonds as with the new structure at Center St and 11 Mile. Revenue bonds only pledge the revenue of the parking system, not tax revenue, as security to the bond holders.
The annual debt service on the other three components is estimated at $2.4 million per year for 25 years. The city manager is recommending the DDA pick up the debt service on the park, which is estimated at $737,000. That leaves about $1.6 million to the general fund for City Hall and the police building. That sounds like a lot of money, and it is, but the city’s OPEB and pension bond issue is saving the city $2.5 million per year, the new buildings will have lower utility and maintenance costs, and will reduce staffing needs.
The type of bond the city will issue is called a “limited tax general obligation bond.” That means bondholders have a claim on existing (already authorized) taxes and other revenue, but the city cannot issue any additional taxes to pay the debt service. In other words, there will be no tax increase as a result of this project.