Past administrations and councils have spent decades trying to shift city operations out of the former Lafayette Hotel, which was never meant to serve as the permanent city hall.
In the meantime, the city has built up a backlog of bills.
If it advances, it also has the potential to really reshape downtown.Richard Young, CivicLex founder and executive director
"There is a substantial amount of deferred maintenance, over $55 million dollars. The city has put in millions of dollars every year on refurbishing this building, which is largely in disrepair," said Richard Young with CivicLex.
Those pressures could finally push city leaders to agree to a nearly $87 million public-private partnership with the Lexington Opportunity Fund that would move city hall to 200 West Vine Street.
Young says the project, which would include renovation of an existing structure and the construction of a new building, could make for a new kind of downtown.
"If it advances, it also has the potential to really reshape downtown," he said. "Assuming that the city would either sell or find another use for the current city hall once they moved in, that would open up a pretty significant property on the eastern side of downtown. It could both change Vine Street pretty significantly and Main Street significantly."
Council is set to vote Tuesday on whether to advance the partnership deal.
Government Center Fact Sheet
BEFORE THE COUNCIL
Included in the Tuesday, Nov. 18, Urban County Council Work Session packet is a request for Council authorization to execute agreements forming a public-private partnership to buy and redevelop the Truist Bank Building at 200 West Vine St. The building would become the new home for the Government Center. The 1.767-acre property includes an eight-story office building, a new 286-space parking garage (with public parking spaces), and the air rights above a section of the parking garage. Council authorization will require two readings of the ordinance at upcoming meetings.
BACKGROUND
Mayor Gorton is the fifth mayor to work on a new home for the Government Center, which is currently located in a historic hotel built in 1920. When the hotel was purchased by the government in 1982, it was identified as the government’s temporary home. Since then, Lexington’s population has grown by almost 60% and our LFUCG staff by nearly 40%, but the workplace has stayed the same.
NEED
Several studies have confirmed the need for a new government center. The cost of staying in the current building continues to rise exponentially, while the building becomes more and more inadequate to meet the public’s needs, for example, there are accessibility challenges, and the Council Chamber is too small to meet the community’s needs.
Deferred maintenance and repairs needed now on the current Government Center are estimated to cost about $55 million, covering only basic upkeep and required code issues, with no improvements to efficiency, public accessibility, or the workplace environment. Waiting longer on this project only makes it more expensive in the future.
TRANSPARENT PROCESS
The need for a new government center has been discussed frequently, especially since Mayor Gorton has been in office. Council has been briefed many times. There have been several studies that have been discussed publicly. There have been public presentations, which have been covered by local media. The mayor has discussed the plan frequently. This property was chosen after a public bidding process by a committee that included representatives of the administration and Council. The current process began 15 months ago and has included more than 35 formal committee meetings.
PARTNERSHIP & COSTS
As part of the project, Lexington will enter into a P3 (public-private partnership) development agreement, and other related agreements, with the Lexington Opportunity Fund (primary partners are the Webb and Greer Companies) or an affiliated company. The city will pay approximately $23.6 million for the real property, which includes the office building, parking garage and air rights and will own the underlying property once the deal closes. This purchase price was negotiated and agreed upon based on the fair market value established by an independent appraisal.
Lexington will also enter into a ground lease with the developers, and once construction is complete, the city will lease the buildings for a term of 35 years with annual lease payments expected to remain constant and projected to be $3.5 million each year. The projected annual lease payment is less than one percent (1%) of the government’s current budgeted annual General Fund revenues. The city will own the entirety of the project at the conclusion of the lease. The estimated total redevelopment project budget, including the purchase of the property, site control, design, construction, and financing costs is projected to be $86.6 million. (Because this is a P3 project, the approval of the state’s Local Government P3 Board may be required before the deal formally closes.)
PLANS
The current 94,000-square-foot office building would be completely rehabbed, and an addition would be constructed, specifically to meet the needs of the public. The 10,000-square-foot addition would be built on the Vine Street side of the current building. It would serve as the community’s front door, with a welcoming lobby, meeting rooms of all sizes and a modern council chamber, where a large crowd can be seated without being sent to an overflow area. Energy efficiency, accessibility, and sustainability are priorities. The new Government Center is expected to open in 2028. The developer’s team includes Lexington-based DW Wilburn Construction as the general contractor, and Champlin / EOP Architects as the design services firm.