By Adam Hocking
MARSHFIELD — The Marshfield Common Council unanimously voted on Tuesday night to direct city staff to start negotiations with Gorman & Company Inc. for the sale of City Hall and its conversion into 40 “affordable workforce housing units” and also for staff to begin negotiations with Forward Financial Bank for the purchase of the bank’s facility at 207 W. Sixth St.
Several developments will need to occur for city offices to successfully relocate. The city must offer an acceptable purchase price to Forward Financial Bank, Forward Financial must construct its planned new facility, and Gorman and the city must come to terms on the sale of City Hall. Gorman must also be granted a Wisconsin Housing and Economic Development Authority (WHEDA) tax credit for the City Hall development.
The city would like to move its offices out of City Hall because the building is aging and in need of significant maintenance, and it also has much more space than required for city offices.
The common council also considered offers from IconiCare LLC, which proposed senior and assisted living housing, and Wisconsin Redevelopment LLC, which proposed workforce housing with some market rate housing, but the package Gorman submitted was most attractive to the city.
“We felt the best deal financially was Gorman. The best proposals were Gorman and Wisconsin Redevelopment because they were focused on workforce housing,” Mayor Chris Meyer said.
Gorman would allow the city to retain the income from the retail stores that currently occupy portions of City Hall and from cellular towers on the roof of the building. Conversely, Meyer said the city will work with Gorman to see what it could receive as an up-front offer to relinquish the retail space and cellular equipment and compare that to the value of retaining the income over a 10-year period.
An initial projection of what the city would receive financially over 10 years from each developer showed that Gorman’s offer would be the most compelling, allowing the city to earn about $3.4 million between the sale of the building and income from the cellular equipment and retail space.
Wisconsin Redevelopment’s offer projected a 10-year return to the city of about $760,000, and IconiCare’s offer would have netted about a projected $780,000 over that period.
Gorman could maintain the tennis courts inside of City Hall, but that would mean the removal of the retail space to make room for extra apartments, City Administrator Steve Barg said. The city could also negotiate that the tennis court area be redeveloped into apartments, thus retaining the retail space and subsequent income.
The asking price for Forward Financial Bank’s facility is about $3.2 million. Though the Gorman offer would generate a projected $3.4 million over a 10-year period, the present day value of the offer is about $2.9 million. Meyer said the city is also considering the significant maintenance needs of City Hall, which could cost in the neighborhood of $2.6 million over the next 10 years. The city anticipates that less maintenance would be required at the Forward Financial facility, which was built in 2004.
“We know that if we buy a building that’s 11 years old, we’re not going to be maintenance free, but looking at the building, … over the next 10 years there’s nothing really significant over there that we can see that’s going to be significant (in terms of maintenance),” Meyer said.
Meyer has consistently said his goal in moving city offices is to realize a savings for taxpayers.
“Our goal is to be cash neutral, and without that being true, or very, very close to it, we’re probably not going to do this. It doesn’t make sense to spend money to move if we don’t have to,” Meyer said.
Barg added that he did not know what the cost to renovate Forward Financial for city purposes would be, but he anticipated an estimate by the end of December.
Barg also hoped an agreement between Gorman and the city could be approved at the Jan. 12 common council meeting, though the city would probably not know until May whether or not Gorman was approved for the WHEDA tax credit.