Mayor Chris Beutler today said the City's purchase of the Experian building would promote efficiency and intergovernmental cooperation, save taxpayer dollars and potentially keep private sector jobs in Lincoln. The City proposes to buy the mostly-vacant facility at 949 West Bond in northwest Lincoln for $6.5 million. The current assessed value of the 355,000-square-foot building is $7.8 million. The Lincoln-Lancaster County Planning Commission will discuss the purchase at its meeting at 1 p..m Wednesday, September 8, and its recommendation will go to the City Council.
Earlier this year, the City issued a request for proposals to house the Engineering Services Division of the Public Works and Utilities Department, whose lease at 531 Westgate is expiring. Experian responded with an offer to sell its building, which has been on the market for five years with no firm offers. The company wants to lease a small portion of the building to house about 150 existing employees.
"We all know the advantages of owning instead of renting," Mayor Beutler said. "With the rental savings and the revenue from leasing space to other entities, the Finance Department projects the Experian purchase will result in $500,000 of taxpayer savings over 15 years. During these difficult economic times, the City must seize upon every proposal that saves taxpayers money over the long term. It is equally important to have the vision to look ahead to the future needs of the City and how we can meet those needs in a cost effective manner."
In addition to Public Works and Utilities, the space would be used for other City agencies that now lease space, including the Urban Search and Rescue team, the 911 Communications radio shop and Bureau of Fire Prevention. Beutler said co-location increases efficiencies and allows for better service at less cost. He said other governmental subdivisions also may be interested in locating there, creating even more opportunities for consolidation.
If it purchases the building, the City plans to spend an additional $1.2 on renovation and debt issuance costs for a total cost of $7.7 million. The City would finance it through a lease/purchase option over 15 years, with an interest rate of about 4 percent and payments of about $700,000 a year. The City projects annual rent savings of about $370,000 and rent income of about $380,000. After 15 years, the City would no longer incur the lease/purchase costs, creating even more savings. The City does project some additional operating costs because of the larger facility.
Beutler said the purchase also would allow the City to reduce the amount of bonds needed for future capital projects by more than 50 percent, a savings of $4.5 million. Those future projects include improvements to the 911 Communications Center and an update of Lincoln Fire and Rescue's training facilities.