July 16, 2014 - By Meg Peters
Review Staff Writer
Lake Orion committed to a net $1.6 million addition to their tax base if the deal with Lockharts BBQ closes in August.
Originally thought to close on July 15, Lockharts purchase of the current village hall for $525,000 would allow village administration, the water and sewer department and the LO police department to move to the 160-year-old Union Church at 21 E. Church St, and commence with the village hall renovation project.
First whiffs of the idea started in March, when the village advertised the sale of the current village hall. The only interested bidder was Drew Ciora, owner of Lockharts BBQ of Royal Oak. However, talk of moving village hall into the Union Church, previously owned by Orion Township, began a few years ago, according to councilman Dave Churchill, for $200,000 to $300,000.
Now with Ciora's and the village's approval of the purchase agreement, the village has the go ahead to begin renovating the Union Church and plans to move in as early as December 1. Lockharts BBQ must provide an earnest money deposit of $52,500 with the title company as a good faith deposit to move forward with the purchase, according to Village Manager Darwin McClary.
The total cost for renovating and updating the church to current municipal needs and requirements is $878,600. The general fund would account for $62,0000—$525,000 from the sale of the current village hall and $100,000 loaned from the water and sewer fund. The loan would be paid over 10 years at a two percent interest, or just over $11,000 a year. The remaining $253,600 would be paid through other means and agencies.
Council approved six authorizations Monday, July 14, to get the ball rolling, including awarding the construction management services, authorizing to execute the purchase agreement, authorizing to execute the revised development agreement, awarding a contract to construct the emergency communications tower shelter (one stipulation holding the entire process back initially), authorizing the execution of the lease agreement between village hall and Orion Pointe, and the authorization to prepare loan documents for money needed from the water and sewer fund to help fund the entire project.
Included in the authorizations was Ciora's request to possibly extend the closing date from August 15 by 60 days, if necessary, for his financial team to complete its due diligence. This would not affect the village's move-out date, which is targeted for mid to late August.
Council awarded construction management services to one of three bids, selecting MJC Construction Management INC., and CMA Design Services of Shelby Township to re-construct the new village hall.
One company, Bernco, submitted a bid in an incorrect format and it was rejected.
About a $400,000 difference in bids kept project managers Darwin McClary and Scott Reynolds with the awarded contractor. A company called MICCO Construction, LCC. of Pontiac bid $889,000 for construction services and was denied.
Of the $878,600 in total costs, $488,134.05 would be paid to MJC Construction Management and CMA Design Services for interior and exterior renovations to the Union Church.
Other costs include, but are not limited to, architectural services to SA&A Architects of Lake Orion at $25,000, $17,000 in engineering services, $134,000 in the emergency communications tower shelter construction and equipment re-location including a smaller generator to run this equipment, $90,000 in IT improvements, and $18,000 in moving services.
Another cost is budgeted for a short term lease of Suite 120 at Orion Pointe, LLC for village hall to use from August 1 to January 31, 2015 during the Union Church construction phase. The lease would cost $13,440, or $2,240 per month.
Other items are budgeted in to the total cost, apart from other expenses that could creep up along the way due to the ancient condition of the building.
"I just want to note that there are some unknowns, the major one being the HVAC system—the mechanicals—and we won't know specifically the costs of those until the architects have a mechanical engineer go in and look at those systems," McClary said at the meeting before the project was unanimously approved. Councilmembers Shauna Brown and Pro Tem President John Ranville were absent.
Possible updating of the mechanicals was not included in the budget, along with other possible renovations to interior systems, because they will become known on a rolling basis, according to both Architect Scott Reynolds and McClary. For example, parking lot resurfacing was not included in the price.
Exterior renovations include repainting the entire church, repairing the wood siding, replacing the concrete porches, and building a concrete pad on the outside of the church to store a generator.
Interior renovations including knocking out a few walls, carpeting many of the large rooms, and repainting walls.
Technology improvements include purchasing two new servers, seven new computers and software, a new phone system and updating a few printers for example.
For councilman Dave Churchill, the expense of the village hall renovation is getting on the "excessive" side.
"For a project that was going to start at $250,000 to $300,000 a couple years ago, which is now close to $1 million, my head is almost about to pop," Churchill said at the meeting.
McClary understood the fear of spending such a large sum of money and asked councilmen to look at the proposition from a different perspective.
"If we are going to do this project I think we have to do it right the first time," he said. "We need to make the investment in the village hall that lasts 30 years so we only have to do minor improvements to maintain it rather than major renovations. I know it's scary, but I don't think it's an unreasonable investment when you look at the size of the church and the investment of Lockharts BBQ moving into this facility (current village hall)."
Lockharts will be investing about $2 million into the current village hall at 37 Flint St., so McClary estimates about $1.6 million of that will be taxable, or about $30,000 a year for all taxing units
One thing Lockharts has asked for is the consideration for a seven-year tax abatement for $218,000. A portion of those taxes would be collected by the Downtown Development Authority (DDA). However, if a tax abatement is approved, the DDA will forego taxes on property improvements for a number of years, according to the developmental agreement.
"This project is generating so much interest and excitement for businesses moving downtown," DDA Director Suzanne Perrault said.
Perrault believes within the next three months the four available buildings downtown will all have new leases.
"I talked to a new business every single day last week, five people wanting to move or open a new business in our downtown. The biggest challenge the DDA has is that we don't have enough inventory," she said.