Property owned by the city of Mobile could cost $200 million in maintenance over the next 10 years, members of the Mobile City Council learned Tuesday afternoon.
Commercial real estate firm CBRE presented councilors with the results of a facilities assessment Tuesday, following the regularly scheduled council meeting.
The $200 million in expected maintenance comes from $83 million in deferred maintenance to get city owned structures up to acceptable measures, CBRE Executive Vice President Michael McShea told councilors. Of that, $25 million would go to the 53-year-old Mobile Civic Center. Another $117 million comes from projected routine maintenance, he said.
The firm assessed more than 127 facilities and produced 124 reports, McShea said. The reports looked at conditions of each facility and gave an estimated cost to repair or replace the facility. From those reports, CBRE found that 41 percent of the city’s buildings were in good condition and 29 percent were in need of more than a total $52 million in deferred maintenance costs, McShea said.
The firm reviewed 4,417 acres of mostly vacant land across 1,159 parcels, CBRE First Vice President Lee Ann Korst said. The firm assessed more than 367 city-owned buildings that took up 3.8 million square feet of space, she said.
CBRE gave councilors a number of suggestions for how to offset some of the maintenance issues that could become a problem. One solution would be to sell off unneeded assets through surplus disposition, McShea said.
McShea said using CBRE’s suggestions on buildings to possibly put up for sale could save the city more than $24 million in maintenance costs.
To begin with, McShea said the city had a number of options when it comes to consolidation and relocation. First on the list, McShea said, would be the Mobile Police Department headquarters on Government Boulevard and St. Anthony Street.
Another headquarters that could be relocated is the Public Works Department, McShea said. The current Public Works building sits on Gayle Street. McShea said it’s flood prone and in the middle of a residential neighborhood.
CBRE suggested the city consider selling off a large number of buildings through surplus disposition. One of which, Korst said, could be the Mobile Public Library administrative offices, which are across the street from the Ben May Main Library branch downtown in a historic house.
Corst said there was space in the main branch of the library to house the administrative offices.
Mayor Sandy Stimpson pointed out that it isn’t feasible to sell off the city’s 1,000 vacant lots individually.
“For us to start selling those as one offs, we’d all be dead before they sold,” he said. “We’re going to have to come up with some creative thinking to bundle some of these properties together.”
Action services are an option too, Korst said.
Civic Center changes
Korst and McShea also presented possible development options for the Civic Center property. Both options included an arena and theater, but one option had more retail and office space, while the other included a ballpark concept.
McShea seemed to favor the first option, which included 775,000 square feet of office, retail and residential space. The option including a ballpark only had 355,000 square feet of office, retail and residential space.
“You would lose 400,000 square feet of potential development space,” McShea said. “It’s a significant difference.”
Korst said the company plans to release a request for qualifications, or RFQ to thousands of developers some time next month. She said they typically give 90 days for responses. That puts the possible date for proposals at June 2018. There would then be an August award date, she said of the proposed timeline. Construction could begin as soon as March 2020.
Executive Director of Finance Paul Wesch told councilors that the city currently has about a $300 million total budget. Most of the revenue from that budget, or about $225 million, comes from sales tax or business license fees.
Wesch said despite the city’s growth and “it is growing,” he reported, the best Mobile could hope for was for revenues to remain flat over the next five to 10 years. The increasing popularity of e-commerce and the legal challenges expected for attempting to collect sales tax revenue from it could have a detrimental impact on the city’s coffers.
Despite all this, Wesch said the city could find ways to come up with $20 million per year to be used for these maintenance issues.
In a table presented to councilors, Wesch imagines revenues with the addition of a garbage and stormwater maintenance fees, early disposition of property and savings from a reduction in the police jurisdiction.