City talks rec center ... again
By Kenneth Fine
Published in News on September 9, 2009 1:46 PM
A rendering of the Community Recreation Center shows the location of the proposed building on South Center Street. The project is back on the city's list -- at least for now -- because of the continuing drop in building prices and the possibility of saving money on the construction if the project is still a priority.
The same economic climate that prompted the Goldsboro City Council to put the recreation center reconstruction project on hold in January has created an opportunity to build the facility for much less, officials said during a pre-council meeting work session.
City Manager Joe Huffman, Mayor Pro Tem Chuck Allen and Finance Director Kaye Scott agreed that moving forward with the bid process would be in the city's best interest -- if, in fact, constructing the building is still a priority.
"(In January), the council decided to hold off on opening the bids until we had a better idea of what the economy was going to do. ... Well, right now, there could be considerable savings if we move forward," Huffman said. "If the council decides the Community Building should be built, it is probably going to be cheaper now than at any other point in history."
The finance department backed up that claim, showing $5 million in savings over the course of a 20-year loan based on the difference between interest rates now and what they would have been in the past.
Ms. Scott said currently, the city could likely secure a rate near 4 percent on a $10 million to $12 million loan.
"If we had borrowed this money in 2006/2007, the interest rate at that time would have been 7.5 percent," she said.
Based on those numbers, a $10 million project now would cost $4.9 million less than it would have years ago. And nearly $6 million would be saved if the bids come back closer to $12 million.
But Allen believes the lower figure is more realistic.
He cited a letter from R.N. Rouse & Co. that quotes construction costs are currently 15 to 20 percent cheaper than they have been in the past.
"So a $12 million project ... we think would come in at $10 million," he said. "Construction costs and interest rates have gone down more than the revenue stream has, and by 2011, 2012, I think you'll see the revenue streams go back up."
But what they won't see years from now, he added, are interest rates nearly as low as the 4 percent projected by Ms. Scott.
"For a year or two, it might be a struggle," Allen said. "But in the long term, if you ever believed in (this project), you'll never have this opportunity again."
The city has been eyeing reconstruction of the building -- opened in 1925 and located on Walnut Street -- after it was destroyed by fire in 2004.
So the council established a 12-member committee in June 2005 to research a possible reconstruction, and until January of this year, had a design, location and most of the additional details to make it happen in place.
The city even closed the deal on property located on the 200 block of Center Street as the future site of the facility.
In March 2008, the Goldsboro Planning Com-mission approved the building and months later, the council hired the Sports Facilities Advisory, a consulting firm, to estimate operating costs for the recreation facility.
Allen thinks that work exemplifies the commitment made by the city to make the facility a reality.
So he asked his fellow board members to open the bid process back up -- if only "just to see" what the bottom line would actually be and whether or not it is affordable.
"I think this is a once-in-a-lifetime opportunity if we were ever serious about doing this," he said. "So let's at least see. Let's go put out bids. To me, we all committed to building this thing and I don't know how you'll ever find anything cheaper."
No formal decision on whether or not to move forward with the project was made, however, the council did agree to allow bids to come in -- to give them a firm figure before giving construction the green light.