- April 20, 2024
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The decision whether to move forward with designing and building a new City Hall came down to two things at Tuesday’s City Council meeting: Should residents be able to vote on it or not?
In the end, council members unanimously agreed that approving a new City Hall is the fiscally responsible thing to do, and so city staff will move forward with the design and construction-management servcies of a $9 million, 40,000-square-foot facility.
Tuesday’s discussion lasted more than 3.5 hours, with about 40 people speaking during public comment. More people publicly spoke against the city’s proposal than in support of it. However, the number of people present that were in support of the project appeared to outnumber the people against it.
There are three main funding sources for the proposed construction. First is the repayment of a $5.8 million loan that the city originally made to the Town Center Community Redevelopment Area. The CRA currently pays 5% interest on that loan, and the city is proposing to call that loan due and have the CRA apply for another loan at a lower rate from the bank.
The second source of funding is about $1.1 million in excess funds from the city's building department, which collects fees for building permits.
The third source will be additional taxes collected in the next few years from property owners located in the Town Center CRA. That is projected to be about $2.2 million.
Currently, the city pays about $250,000 a year — or $1.37 million in the past six years — in rent at City Marketplace. The estimated rent payments over the next six years, according to Finance Director Chris Quinn, are about $1.44 million through 2019 and another $1.51 million from 2019 through 2024.
About $6.9 million is needed to build the 32,000 square feet of offices in the two-story City Hall, which includes the following departments: planning, building, code enforcement, customer service, business tax receipts, the Business Assistance Center and human resources. It also includes public areas and support space. That construction will be funded by the repaid CRA loan and the building permit fund.
Then there are the Central Park community areas, which include community meeting rooms, City Council chambers and additional parking. That area, which is about 8,000 square feet, will cost about $2.19 million and will be paid for by future Town Center CRA money when it becomes available.
The City Council’s regular meetings would continue to take place at the Community Center until those funds are available, which could be 2016 or 2017.
But there are plenty of concerns.
One question that was raised by a few residents during the meeting was about the revenue that the city collects in interest on a $5.8 million loan that was currently paid by the Town Center Community Redevelopment Area Board. The city of Palm Coast loaned about $5.8 million to the CRA beginning in 2004 to help the CRA begin construction projects.
The loan term was for 5% interest, and the CRA has been paying that interest to the city in the amount of about $290,000 per year.
Why, then, would the city want to call the note due, considering it would lose its $290,000 in revenue — more than enough to pay the $240,000 annual rent of current city offices at City Marketplace?
The answer, according to City Manager Jim Landon, is that the CRA has to act in its own interest, not the city’s interest. The economic environment is such today that the CRA can refinance and begin paying principal on the loan, rather than just paying interest to the city.
Some residents questioned the location, saying Town Center isn’t in the center of town.
“That question is about as old as eyebrows on eggs,” Mayor Jon Netts said.
Netts said a previous City Council spent two months trying to find an alternative site for a future City Hall other than Town Center. There weren’t many.
“The only other viable possibility was at the intersection of Palm Coast Parkway and U.S.1 — which certainly is not the center of town, and it’s certainly not pad-ready. (This issue) has been repeatedly looked at.”
At least two other residents said City Councilman Jason DeLorenzo should recuse himself from a vote, citing a conflict of interest because his wife, Rebecca DeLorenzo, is the president of the Flagler County Chamber of Commerce, which publicly endorsed the proposal.
According to City Attorney Bill Reischmann, DeLorenzo wasn’t legally required to recuse himself because he nor his relatives or company was receiving “financial gain.”
Other residents wanted to know what else the city could spend the money on if it didn’t spend it on City Hall. Officials have said that because City Hall is a one-time expense, the long-term money that is being saved by not paying rent at City Marketplace can then be used for various capital projects.
Preliminary design is scheduled to take place February 2014. Final design would come around August 2014, which is when a maximum price would be set and presented to the City Council.
Bidding on the project would then take place in September 2014, with construction to take place November 2014 through September 2015.
If all goes according to schedule, occupancy would occur by October 2015.
Council comments
“This is — since I’ve been a member of this council — the most volatile issue that I’ve ever faced. I have gotten more emails, phone calls and personal conversations than I have gotten in the last two years. People are either passionately for it or passionately against it. I’m having a hard time deciding. Fiscally, it makes good sense. But at the same time, I’m supposed to represent the people who elected me.”
— City Councilman Bill McGuire
“Fiscally, it’s a really good decision. It makes sense. Although it’s easy to struggle with what we hear and who we talk to, it certainly isn’t the majority of the citizens. ... It’s a small number. For me, that’s the most important thing because that’s for all the citizens, not just the ones we heard from.”
— City Councilman Jason DeLorenzo
“We all were elected by whomever — either for or against someone else. We were elected to make decisions for a population of people. ... They elected you and me and others to make those decisions regarding the well-being of their city. ... No one is looking for 100% support from the population — you’ll never get that. But if you are elected, you have to carry out your responsibilities no matter how tough it is. We have to bite the bullet and make the right decision for the city.”
— City Councilman Bill Lewis
“What I see is that there is a trust factor that is in play here. And the people who are against spending the money for this purpose feel as though there are issues with how money is being spent in general. ... The nature of (whether or not to put this on the ballot) is going to disenfranchise somebody, somewhere. ... If you look at the numbers, it looks like a wise thing to do. It shouldn’t be based on politics or someone’s personality.”
— City Councilman David Ferguson
“We were elected to make decisions ... for the benefit of Palm Coast as a whole. Not for any particular party. This is a fiscal decision. I would remind council and our residents that a few years ago, City Council voted to spend $83 million (to purchase the utility) without going to referendum. ... We’re being called upon to make a fiscal decision that is in the best interest of our residents.”
— Mayor Jon Netts
