The Dollar$ and Sense of a new Civic Center for Mountlake Terrace: Part 3 — owning vs. renting

Editor’s Note: This is the third of a series examining the proposed Civic Center and Proposition 1, the $25 million capital bond measure to pay for it. Mountlake Terrace votes will find the bond issue on their Aug. 7 primary election ballot, arriving in mailboxes this week. You can read Part 1 here and Part 2 here.

Story and photo by Doug Petrowski

Interim City Hall.

Exit from I-5 at 220th Street Southwest and head west; the first building on the right is a glistening five-story building, slightly red in tint, standing proudly over the neighboring business district. Inside are medical offices, a few law firms, some management companies, and a city hall.

The City of Mountlake Terrace has operated out of second floor office space in the Redstone Corporate Building, 6100-219th Street Southwest, since 2009. The move was necessitated by a ceiling collapse in the previous city hall facility at 232nd Street and 58th Avenue West; that building was subsequently razed.

Now officials have plans for a new city hall at the previous site, with additional space for a community/senior center, other offices and conference rooms, an expansion of the adjacent police station and improvements to the neighboring library. To pay for the new Civic Center, voters would have to approve a $25-million capital bond measure appearing on the Aug. 7 primary ballot. The 30-year municipal bonds authorized by approval of Proposition 1 would be paid back with an increase in property taxes within Mountlake Terrace.

Graphic courtesy of Vote Yes on Proposition 1 campaign.
The city says that rent for the current space in the Redstone Building runs $500,000 per year, rising to $502,904 beginning in 2014. Opponents of Proposition 1 point out that 30 years of rent at that rate is just over $15 million, much less than the $25-million bond issue. And 30 years of repayments on the municipal bonds, with interest, total $49,985,350 according to the city’s own projections.

But city officials respond that the almost $50-million repayment figure will still save taxpayers money, because rent payments will total $61,344,513 over the next 50 years (the expected life of the proposed Civic Center) when you figure in 3-percent rent increases through 2030 and another 3.5 percent in increases thru 2063.

“We have a lease through July 2014 with an option to extend for another three years,” explained City Manager John Caulfield. “The issue is how do we pay for (extended rent). We have a line of credit we can draw down on, that’s all well and good, but then we would have to repay that.”

Proponents for the proposed Civic Campus argue that moving out of rental space near the freeway and into a larger, permanent facility back near the Town Center of Mountlake Terrace is beneficiary for the city.

“It puts up back in the heart of the city,” said Mayor Jerry Smith earlier this month.

“It’s a civic center, which puts us back on our own dirt,” City Councilmember Doug McCardle said in April. “We will be done renting and we can actually own the building.”

“I think if we were to stay in (the Redstone) building, paying the rent for this would just be a band-aid approach to a problem that has to be solved,” McCardle added.

“I like how our Civic Center is not going to be just a city hall,” said fellow City Councilmember Rick Ryan, who cited the planned senior center, expanded police station, and space available for civic and private groups as positive aspects of the proposal.

In 2010, a similar measure for a new Civic Center was turned down by Mountlake Terrace residents, with surveys showing the $37.5-million price tag was the reason for voter disapproval. With this year’s Proposition 1 pegged at $25 million, the price still may be too high for some voters.

“If the City of Mountlake Terrace is in such a need of a new city hall, they need to get rid of the extras and build what is truly needed,” said Margaret Loiseau, spokesperson for a Proposition 1 opposition group.

“Say goodbye to the library improvements, police department expansions, the amphitheater and ornamental gardens, let the Seniors Center stay where they are at for now; build what is a must,” Loiseau said. “The other stuff can wait until times get better.”

Improvements to the library roof and HVAC system were included in the 2010 capital bond measure that went down in defeat. The city was able to provide some upgrades to the library building’s HVAC system anyway through grant money. The Senior Center currently operates out of a converted house at 5605-235th Street S.W., renting space from neighbor Bethesda Lutheran Church when needed.

There is hope among city officials and supporters that the entire Civic Center project will be seen in a favorable light among voters. There is also optimism that the project can come in at less than the $25 million to be raised if Proposition 1 passes. If voters approve the plan, and a finished Civic Center comes in under budget, what would be done with the leftover money? We will explore the possibilities in the next report.

  1. Funding a new civic center instead of paying rent (which would require more money in the long term over the life of the building) is a much smarter move for our City. Investing in our downtown core sends a message to businesses that we have a City worth their investment. Paying to upgrade police HQ makes the building more safe and usable. Building a place that rings together the community fosters a stronger City. Building in a less robust economy saves us money in overall construction costs. It makes sense to make this investment which is not a large amount of money per year for a huge payoff. I support Prop 1 and investment in our great City.

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