Council decision looms on Tumwater City Hall

The City of Tumwater is one step away from locking down a new location for city hall.

The Tumwater City Council is poised to decide on whether to  authorize Mayor Leatta Dahlhoff to finalize the purchase of a 95,000-square-foot building at 310 Israel Road at a meeting on Tuesday, Oct. 20.

The building would serve as city hall once it has been renovated. The council authorized a $100,000 deposit for the purchase earlier this year, when the sale price was $15,580,000. 

City Administrator Paul Simmons told the council at an Oct. 13 meeting that a price of $14,080,000 has been negotiated with owner Vine Street Investors. The lower price stems from an inspection that showed the building’s HVAC system needs to be replaced to comply with state standards. 

Renovation costs 

Once the deal has been closed, the building will be renovated before staff moves in.

Tessa Bradley, of architecture firm Artisan’s Group, presented a range of renovation options to the city council, starting with $5.45 million to $7.15 million for bare minimum adjustments. 

For construction of a lobby and council chambers, it would cost between $7.22 million and $9.41 million. 

The highest-cost option is $13.46 million to $17.01 million, which would include the full replacement of the HVAC system, the installment of a 300-kilowatt generator and ballistic glazing improvements. 

Bradley noted nearly $3 million in grant funds have been identified that could help foot the bill for the improvements.  

The building is also over 20 years old, according to Bradley. If the city proceeds with the purchase, the city plans to hire a new maintenance worker. Based on the city’s proposed 2028 budget, the position combined with other maintenance expenses would result in $455,294 in annual maintenance costs. 

City adminstration is also looking to secure a bond to finance the project. The council authorized city administration on Sept. 15 to proceed with a $65 million bond for three projects, including the new city hall. 

Simmons said the acquisition price and the initial renovation costs would total $19,080,000. That would leave the city with an annual debt payment of $1,378,834 over 30 years based on a 6 percent interest rate.

Simmons said staff anticipates using two-thirds of the building and leasing out the remainder of the space.

Because the project would be funded through tax-exempt municipal bonds, he said any excess space can only be leased to other government entities, as lease revenues from private entities and nonprofits would generate taxable revenue, which would then increase the financing rate. 

Council support

Some city council members expressed support for the purchase. 

Council member Angelea Jefferson said it’s an “obvious yes” for her, but recommended that staff highlight challenges in future presentations, as well as give the public more information on why the purchase is necessary. 

She also asked if a $19 million bond was enough considering the other costs to fully renovate the building. Simmons said staff aims to secure state and federal grants to reduce the city’s part in renovating the building. 

Council Member Eileen Swarthout said she appreciated the information they were given, noting it showed why repurposing an existing building is more practical than constructing a new one. 

Toward the end of her presentation, Bradley also gave a comment about the benefits of the acquisition in terms of improving the staff’s well-being. 

“I think the new front for cities is retention, and you are only as good as your staff. The staff here are working in conditions that are really unacceptable by modern standards,” Bradley said.