Old Town Hall Discussion - 50th Anniversary - Renovation Quotes - Next Steps

Council Members Specht and Howell originally asked for this item to brought forward for discussion at the Council level this year.  Ramsey is having its 50th Anniversary this year and trying to bring the Old Town Hall back into service in some capacity could be part of the celebration.  The City Council has discussed this item twice this year at work session and asked the EDA to look at the potential of funding the project as consensus of the July 25th work session. 

The purpose of this case is to consider contracting to renovate the entire Old Ramsey Town Hall, performing general maintenance and to consider future use.

At the March 9th, 2024 City Council work session, the City Council discussed the idea of renovating the Old Town Hall Building as part of the 50th Anniversary Celebration for the City of Ramsey.  The consensus of the discussion was to have staff obtain quotes for the renovation and to bring it back to a future work session for discussion. Possible uses could be park programming, lease for music instruction, other smaller retail or office uses with minimal parking requirements.

Obtaining quotes for the project took longer than anticipated based on the complexity of the project and finding three contractors willing to quote the work.  Staff has attached the quotes and scope of work for each contractor and a comparison of the quotes to this case.  In order to ensure that the building meets ADA requirements, staff is suggesting that the concrete ramp and sidewalk be included with the work contracted if the Council decides to move forward with the renovation.  There are a couple of large Oak trees (One dead and hanging over building, the other one dying) on site that should be removed as part of this project to make way for the sidewalk.  One contractor quoted $4000 for the tree removal but our public works team will be able to get the work done for a lesser cost.   Quotes from the contractors ranged from $120,007 to $187,000 and did not include tree removal which is significantly less than what staff estimated at the previous worksession.  Neither quote included Sewer and Water connection charges, if applicable. The water meter was removed in 2000 and a new meter would need to be installed by the City.    The timeline to complete the project once awarded and materials selected ranged from 4 weeks to 6 months.  Based on the timing of required approvals, it is unlikely the project would be completed prior to Happy Days.  The lowest quote was provided by DKN Construction and they also had the shortest timeline to get the project done.  It should be noted that these quotes have a shelf life and a decision needs to be made quickly to ensure price stability. Staff also has had further discussions and has provided additional information to the contractors from the RCP report.  Staff recommends that if a recommendation to award a contract is made that a 10-15% contingency be included due to the exploratory nature of some of the work that is needed to be performed (Sheet rock replacement (water marks), Door frame rot extending into builfiding, and other unforeseen conditions).

Parking Update (New information)

Staff has had subsequent discussions with Security Bank and Trust (Formerly Flagship Bank) and they are open to a shared parking arrangement as long as it does not negatively impact their customers and employees.  If a decision to move forward with the renovation, Staff would set up a meeting with the bank to discuss details and a potential agreement which likely would be dependent on the future use of the Old Town Hall building.  Per an existing agreement (attached), the City already does have access to parking in the bank lot when the bank is closed.

Potential Uses (New Information)
In order to ensure that the historical building is preserved and isn't deteriorating, it would make sense to have it occupied in some capacity.  This would ensure the utilities are operational, the building isn't leaking and it is secure from pests.(squirrels, bats, raccoons, mice, etc). a business incubator was listed as a potential use in the RCP study. Staff believes that a CPA, tax preparer, boutique retailer, or another office user that doesn't require many customers or workers would also be good uses of the space.  Ideally, rent would recover the renovation costs quickly, but there is value in having a tenant "keep the lights on" to ensure the building remains in good working condition after the investment of the renovation has been made.

Staff is looking for direction.

For Quick reference, information provided in the April 9, 2024 work session case is below:

Renovation History and New Pricing Estimate (Old information)
The City worked with the U of M and Resilient Communities Project (RCP) to put together a 1) Historical Report of the Old Town Hall (17A) and 2) the Future of Ramsey Town Hall (17B).  The Historical Report has been provided for reference but the focus of the discussion centers around the renovation and future use of this historical building in Report 17B.  The report evaluated the pros and cons of keeping the building at its current location or moving it to the COR. The report concluded that leaving it in its current location would allow it to remain on the National Register and not risk damaging the building by moving it.  The report then looked at what would be needed to renovate the building so it could be restored appropriately and be able to be occupied and used.  Any renovation would need to comply with the Secretary of the Interior's Standards for Rehabilitation as outlined in the RCP report.

In order to maintain its place on the National Register, special care must be taken to restore the building as close to the original conditions as possible.  The report outlines the 2 major steps necessary to get to this point: 1) Climatization and 2) Pre-Occupancy Upgrade. In 2018, the cost to bring this building into operation was estimated to be $44,940. in 2019, the City re-roofed the building and repaired the eaves.  In 2021 a private business asked the city to renovate the building and to lease it back for a boutique.  Quotes for the renovation at this time were $111,900 to $139,270 based on increased costs of construction and inflation staff is estimating a 50% mark-up from the 2021 pricing which would amount to a cost of $167,850 to $208,905.

Parking / History (Old Information)
When the First Bank of Isanti bought the land next to Town Hall and constructed its facility, a Declaration of Reciprocal Easements document was filed. (See attached) This document references a shared parking easement agreement between the Old Town Hall and the Bank that is permanent and perpetual.  Other requirements of the agreement include ongoing maintenance by the bank with the City being responsible for 29% of the maintenance costs within 30 days receipt of an invoice by the Bank and hours that the Old Town Hall can use a portion of the bank parking lot excluding specific hours during bank operation.  Staff is not aware of any invoices that have been issued to the City but will need to verify with finance.  There was supposed to be an Exhibit as part of the recorded document by KKE defining these areas better but unfortunately it is not part of the document of record at Anoka County. Staff has searched for records internally for the KKE Exhibit but have been unable to find it.  Staff reached out to Flagship bank to see if they have any interest in formalizing a new parking agreement that would make use of the Old Town Hall more viable.  Unfortunately, Flagship Bank is in the middle of a merger and won't have time to discuss options in any detail until the merger is complete which is estimated to be sometime in May.

Future Use Options (Old Information)
The 17b RCP report discussed potential future use of the Old Town Hall.   Uses contemplated ranged from a public space, museum, school, arts, and business incubator.   Staff has received multiple requests about the availability of the building for lease for various types of businesses in the past.  Schools and retail uses have approached the City but due to the condition and renovation needed to the building the users go elsewhere. These users were excited at the possibility of using this unique building and think its allure will benefit their businesses.  Parking is also difficult to solve for and any agreement with a future tenant would likely need some sort of cross parking easement with the adjacent properties. 

The Old Town Hall has an estimated 778 SF of lease space.  It includes a bathroom, main hall and cloak room.  Staff consulted with a local real estate agent in 2021 and market rate rent for this building would be in the $12-18 / SF range with the tenant responsible for the utilities / snowplowing and the City responsible for the property taxes. Staff estimates that a current lease rate would fall into the $14-20 / SF range.

Private Party Lease (Old Information)
The EDA reviewed this use in 2021 and recommended that staff renovate the building when pricing came down.  Unfortunately, pricing has not come down since Covid..

Public / Parks (Old Information)
Ideas for use of the site include art classes and rental for small events.  Staff has spoke with Mark Riverblood and he was not confident he could identify many viable parks uses for that building based on the layout, outside noise and uncertain parking.  He noted he thought it was a better niche retail location if the use didn't require much parking or if a parking solution could be found.

Visitor Center  (Old Information)
Mayor Kuzma has expressed interest in moving the Old Town Hall to the Anoka County Mississippi West Regional Park and to utilize it as a Visitor Center.   More information is needed to determine the viability of this based on the information in the RCP Report which recommends against moving the building..

None required

About every 4-7 years the Town Hall and its future is brought to the City Council or Commissions for consideration.  Past responses have included funding general maintenance (Roof, eaves) to securing the building and contracting for reports to identify what would be needed to restore the building and bring it back into operation. The last time the city seriously looked at this item was in 2021 when it had an interested tenant (Small Town Girl Boutique) during the tail end of the Pandemic and it was decided to wait and see if pricing to renovate would come down.  In 2024, pricing has slightly increased with the lowest quote being around $120,007 (was $111,000 in 2021). The proposed scope of work to fully renovate the Old Town Hall includes installation of new front steps, an ADA ramp and a concrete sidewalk from the parking lot to the front entrance. The removal of two dead, or dying oak tress will also need to be done to accommodate for the sidewalk and to ensure the dead trees don't fall on the building.  Our Public Works team has the tools and skills necessary to remove the two trees which would have cost $4000 if contracted out to the private sector.   As previously mentioned above, Staff believes there are likely unexpected items that the contractor will run into during the renovation and is requesting that a contingency of 10-15% (132K-138K) be included for all contractors if a recommendation to award a bid to a contractor is made.  If the EDA funds are are used for the renovation, Staff recommends that the EDA receive all lease payments received from future tenants of the building to replenish the EDA Unencumbered Fund Balance.

The EDA has previously supported items such as replacing the door, general property maintenance. After the two oak trees are removed (No charge-work performed by Public Works), staff is recommending that the building have pests removed from the eaves and attic and eaves repaired.  The front door is still secure, but staff believes that this will need to be addressed prior to this winter to ensure it remains secured from the elements and critters after the upcoming winter is over.  Based on past repairs, pest removal / temp repairs ($1500) and a recent quote of $4000 to replace the door staff estimates this cost to total under $10,000 to complete these general maintenance items. If the EDA is not comfortable supporting a full renovation, this option would be a good step in preserving the building in its existing condition. Staff would also recommend the overgrown shrubs be removed, or groomed by Public Works when the remove the oak trees, the building be vacuumed and to have unnecessary items (unused or deteriorated) building materials removed as part of this option.

Alternatives:
1) Recommend to City Council to Award Old Town Hall Renovation bid to DKN Construction for $120,007 (Lowest quote) and up to a 15% contingency from the EDA Unencumbered Fund Balance to fund the full renovation.
2) Recommend to City Council to Authorize Staff to work with DKN Construction and MN Wild Animal Management to Complete Pest Removal and Building Maintenance in an amount not to exceed $10,000 from the EDA Unencumbered Fund Balance.
3) Something else

Up to $138,008 from the EDA Unencumbered Fund Balance (Currently 1.392M)

 

Staff is comfortable with either option presented. Staff does believe that the price will only go up into the future to perform a full renovation or maintenance to the building.  Staff also believes that there is value in having the building occupied to ensure it remains in good working order. Staff does not support "No Action" as the building needs maintenance.

There are three options for consideration:

1) 

Motion to Recommend to City Council to Award Old Town Hall Renovation bid to DKN Construction for $120,007 (Lowest quote) and up to a 15% contingency from the EDA Unencumbered Fund Balance to fund the full renovation.
OR

2) Recommend to City Council to Authorize Staff to work with DKN Construction (Lowest quote) and MN Wild Animal Management to Complete Pest Removal and Building Maintenance in an amount not to exceed $10,000 from the EDA Unencumbered Fund Balance.

OR

3) No Action or Something else.