City ready to move forward on school system central office

Published 12:00 am Friday, June 28, 2013

By Emily Ford
SALISBURY — When City Council meets Tuesday, members will consider moving forward to build a new downtown central office with the Rowan-Salisbury School System.
Council members, who meet at 4 p.m. in City Hall, will review draft construction and financing schedules and lease documents that would establish a 20-year partnership and lease-purchase agreement between the city and school system.
Council members are expected to set a public hearing for July 16.
The city recently completed a massive contamination cleanup at the proposed site of the central office, 329 S. Main St., the location of a former service station. The state reimbursed $430,060 of the clean-up costs, and the city paid $55,871.
The city paid about $209,000 for the land in 2007 and will donate the property to the school system.
According to Assistant City Manager John Sofley, additional estimated costs for building the new central office include:
• Building base cost $8 million
• Dome add on $125,000

• Architect $114,313
• Contingency $260,687

• Total $8.5 million
The city would borrow $8.37 million on behalf of the school system. By state law, the school system can’t borrow money and would pay back the city over 20 years using state sales tax revenue earmarked for capital outlay.
The city and schools would use private donations to fund the decorative dome on top of the building.
Sofley said the city’s estimated financing interest rate range for the debt is 2.5 percent to 3.75 percent. Estimated annual debt payments range from $560,000 to $620,000.
Assuming City Council decides to proceed and the state approves the deal, Sofley provided the following tentative schedule:
• Tuesday, council to approve a lease‐purchase resolution for financing. Council to approve an operating lease with the Rowan-Salisbury School System and architectural contract
• July 16, public hearing

• July 17, staff to provide notice of intent to issue debt
• July 25, staff to receive construction bids
• July 30, council to adopt a resolution of findings of fact for financing and award financing bid during a called meeting
• Aug. 5, staff to submit application for financing to the state Local Government Commission
• Sept. 3, Local Government Commission to approve debt financing and City Council to approve construction bids
• Sept. 20, close financing and start construction
• October 2014, complete construction and the school system takes possession
In 1989, the city and Rowan County school systems merged. For 24 years, the combined administration has operated out of several different locations because the system lacks a combined central office.
The new downtown facility would replace the currently occupied Long Street office, which is unsafe and has bowing floors, failing windows, deteriorating concrete and an inadequate server room, the city said today in a press release. 
In February 2012, the Rowan County Board of Commissioners approved funding for a new central office and sent a letter to the school system committing $6 million for the project.
The city agreed to consider contributing $2 million to build a bigger central office that would accommodate all administration departments.
A year later, commissioners rescinded funding for the project, citing environmental contamination at the site. One day after commissioners killed the project, City Council agreed to consider borrowing $8 million on the school system’s behalf.
In April, the N.C. Department of Environment and Natural Resources cleared the site for development. Dr. Richard Miller, school board chair, and Salisbury Mayor Paul Woodson asked commissioners to reinstate the $6 million they had pledged but commissioners declined, saying the city had stepped in to take over the entire project.
The proposed central office is part of a larger downtown public-private redevelopment project on the 300 block of South Main Street that includes the $3.2 million headquarters for Integro Technologies, which is under construction. The city has pledged to build about 190 parking spaces for Integro and the central office.
Integro’s average wage exceeds $70,000, nearly double the median household income in Salisbury, City Manager Doug Paris said in a statement.
The combined investment in the 300 block of South Main Street will exceed $12 million and is part of a new South Main corridor redevelopment initiative, Paris said.
The city and Rowan-Salisbury School System have entered into a partnership to move the project forward without Rowan County’s participation to provide safe facilities for school system employees and complete the larger downtown redevelopment project, city spokeswoman Elaney Hasselmann said.
The city has a history of leading public-private redevelopment projects, she said.
Past projects include the redevelopment of Towne Mall adjacent to Interstate 85 and several downtown projects, including the Plaza and Gateway buildings, Flowers Bakery, Easy Street and the Fisher Street entertainment district, Hasselmann said.
Read more about the Tuesday’s City Council meeting in Monday’s Post.
Contact reporter Emily Ford at 704-797-4264.