Someday citizens of Manhattan may wish that Doctor Roger Reitz had taken the bus to war. City Commissioner Reitz has been pushing the costly redevelopment of the old Union Pacific Depot. Reitz said he wanted to save the Depot because he and so many got on the trains here going into the Army.

As it stands now the City will have spent more than one million dollars on the depot and the only thing that they can think of to use it for is a meeting room. Tuesday night the Commission voted 4-1 to spend $484,720 for more work. Here is the background information given to the Commission:

BACKGROUND

The Union Pacific Depot property came under the City’s ownership in 1990 when the property was traded to the City as a part of the Downtown Redevelopment activities.

Upon receiving title to the property, the City was contacted by a number of individuals and groups who suggested possible uses for the property including museums, Convention and Visitors Bureau, soup kitchen, restaurants, public meeting space, professional offices and others. As the K-177 bridge project was being designed, the City received a grant from the National Trust for Historic Preservation to perform an analysis on the site for potential users and develop cost estimates for rehabilitation of the building. A team led by Brent Bowman and Associates worked together to analyze the site and recommended some public uses, but because of the access restrictions from the bridge, it was unlikely that a high traffic retail use would be located on the site. The team also provided some initial cost estimates for rehabilitation of the structure, which were used for later grant applications.

Several attempts have been made to acquire funding to make improvements and rehabilitate the structure. In 1997, the City received notice of the award of a Heritage Trust Fund Grant in the amount of $59,920. This grant provided exterior stabilization improvements to the facility and was matched by approximately $15,000 in City funds and $3,000 from the Manhattan/Riley County Preservation Alliance. This portion of the project is identified as Phase I of the Depot Improvement Project. On May 4, 1999, the City Commission awarded a construction contract to Sunflower Builders, Inc., of Manhattan, Kansas, for the Union Pacific Depot Stabilization Project. This construction contract was funded by a Heritage Trust Fund Grant from the Kansas State Historical Society and completed activities to stabilize the foundation of the building.

In 1998, the City was notified by the Kansas Department of Transportation that it had been awarded a grant from the Transportation Equity Act for the 21st Century (TEA 21) in the amount of $279,000, which must be matched with $70,000 in local funds. This effort is known as Phase II of the Depot Improvement Project.

On November 28, 2000, the City Commission approved Resolution 112800-C authorizing City Administration to submit an application for 2003 TEA-21 funds. The City requested $430,400 in additional funds to continue rehabilitation of the Depot, which would be split on the same 80/20 basis of the existing grant. This project, which is known as Phase III, is expected to make the building usable by providing interior, accessibility and mechanical improvements to the building. A notice of award on the application is expected in June of 2001.

Bruce McMillan AIA, Architects was selected as the professional architectural consultant for both Phases of the Depot Project. After the completion of Phase I, the firm was contracted to prepare initial designs and construction drawings in preparation for the bidding process on Phase II.

Commissioners may recall that the TEA-21 project funds could not be used for design work on the Depot project and as a result Tax Increment Financing funds were used to cover these initial costs, which totaled $38,218.68. This was accomplished through the City’s Commission’s passage of Ordinance No. 6181 which adopted a Redevelopment Plan for the Southern Downtown Redevelopment District. The Redevelopment Plan identified the use of up to $60,000 in Tax Increment Financing funds, generated through the Southern Redevelopment District, for preliminary design and construction observation cost. (see attachment) Construction observation is a term that identifies time spent by the project architect to monitor the work of the project contractor. At this point in time the estimated cost for construction observation is $38,500. Since, the architect’s cost for preliminary designs has totaled $38,218.68 for preliminary design work, the resulting balance from the original $60,000.00 approved is $21,781.32.

As a point of information the Southern Downtown Redevelopment District, based on existing properties in the area, is expected to generate approximately $3,184,108 in Tax Increment Funds (TIF) over the 20-year life of the District. The current balance of the TIF account is $131,734.50.

DISCUSSION

The Project architect has completed the designs for the structure and site; KDOT and the State Historic Preservation Office have approved them as a part of the TEA-21 review process.

The project was bid with a base bid and 10 alternates for varying components of the project. The base bid includes a number of items that are necessary to stabilize the building. They include the removal of hazardous material, including lead based paint and asbestos and improvements to the roof structure from a 1980 fire which damaged several support members for the roof. The biggest portion of the base bid is the reconstruction of the tile roof for the structure. Apparently the architect was able to contact the firm that produced the original 1901 tile roof and they can provide duplicates of the original tiles. The 10 alternates include several items that are necessary to the function of the building however since it was unknown how the bids would come out in relation to the project budget, the use of alternates was suggested in order to give the City maximum flexibility on the project and to determine appropriate target amounts for future fundraising. Many of the items in the 10 alternates are included in the Phase III application that has been submitted.

Bids were opened for the project on March 30, 2001 and two local contractors responded. The apparent low bidder was Riley Construction with a base bid of $484,720. The bid tabulation is attached.

KDOT has reviewed the submitted bid proposals and since both bids are below the architect’s estimate and are comparative in costs, they concur with the low bid submitted for the base bid and are willing to provide 80% of $523,220 - the total project cost (see attached letter). This amount is the total of the base bid and the remaining construction observation costs for the architect ($484,720 + $38,500). KDOT’s share of the total expense of the project is $418,576.

The City’s share of the total expense of the project is $104,644. The proposed breakdown of City funds to meet this expense is as follows:

Funding Sources

Amount

City Funds

$71,048.14

Insurance Claim

$6,193.79

Manhattan / Riley County Preservation Alliance

$8,000.00

Southern Downtown Redevelopment District TIF Funds

$19,402.07

TOTAL

$104,644.00

$71,048.14 of the above-described costs is the current balance in the depot fund. An additional $6,193.79 is an insurance claim for hail damage to the roof of the Depot, which was received in 1998. The Manhattan / Riley County Preservation Alliance has also contributed $8,000 to the project with the help of several volunteers and donations submitted from individuals throughout the community. City Administration suggests that $19,402.07 from the Southern TIF be shifted to the architect’s construction observation costs in accordance with the approved redevelopment plan in order to free up funds for construction and maximize the leverage in TEA 21 funds.