Are Omni Building renovations worth the cost?

Published: Mar. 24, 2015 at 8:04 PM CDT|Updated: Sep. 22, 2015 at 10:02 PM CDT
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LUBBOCK, TX (KCBD) - It's an eleven-story eyesore in the heart of downtown Lubbock. The city bought it last November for $1.25 million.

So far, the only major change the city has made to the Omni Building is to change its name to Citizens Tower.

The city paid nearly a million dollars in rent last year. Councilman Jim Gerlt says they can offset some of that by moving city hall into Citizens Tower.

But Mayor Glen Robertson says no decisions have been made when it comes the tower and the rental costs savings are so minimal that he needs to see more data before he is on board.

"We're the government. We never do anything efficiently and we struggle to spend money wisely," says Mayor Glen Robertson, the only council member who voted against purchasing the Omni Building.

When asked why he voted against purchasing the building, Robertson said, "We did not have good numbers, we did not have a good plan. We had some hopes and dreams with very little definition of how we were going to get there."

Mayor Pro Tem Jim Gerlt says one of those dreams is to consolidate city hall into Citizens Tower and renovate city hall to serve as the Lubbock Police Department.

Many citizens have questioned the city's purchase, wondering why they didn't take the building through condemnation proceedings instead.

Councilman Gerlt says condemnation proceedings would have been more expensive and would have limited the use the city could have made of the building once acquired.

"Once you condemn something, then you have to get appraisal value on it. The appraisal value of the tax rolls was over $4 million. We bought it for $1.2 million. Plus, when you condemn something, then you can't use it for anything else."

"If we had paid $4 million to buy it, the condemnation process would probably be another $6 to $8 million to do the demolition on it. So, somewhere between $10 to $12 million and all you're left with is green space because that's really the only thing it can be used for," Gerlt said.

Gerlt's assertion answers another question: The cost of demolition is estimated to be between $6 to 8 million. Some of that cost comes from the extensive asbestos abatement would have to be done before demolition.

Asbestos abatement for demolition costs more, according to the councilman, than abatement for renovation, because asbestos must be completely removed prior to renovation.

With all these costs in mind, the councilman hopes that the building can be remodeled and made useful as Citizens Tower; a new city hall for the citizens of Lubbock.

"We are holding to the belief that we will be able to re purpose the Citizens Tower and this building and do the whole thing for less than a new police station from scratch would have cost," Gerlt said.

But as of right now, the estimated cost for that remodel depends on who you ask.

Councilman Gerlt claimed renovations will cost, "somewhere in the neighborhood of $48 to $50 million."

However, Mayor Glen Robertson, whose business is commercial property development, disagrees.

"We're talking a project that I think is going to run between $75 and $95 million dollars," he said.

Gerlt said the city will pay for this through certificates of obligation.

"So, we don't have to put them out for a bond election. The council has the authority," Gerlt said.

"This is a council struggling with a $1.5 billion debt. Do we want to add to that by almost ten percent?" Robertson asked.

"We're going to be able to consolidate these different departments of the city into one building that will eventually save maybe $800,000 a year in lease payments," Gerlt said.

"I think it's very disingenuous if we as politicians say we're going to be saving the citizens hundreds of thousands because we're not," Robertson said.

Documents obtained by KCBD show that in the best case scenario, the city would probably save less than $200,000 per year by moving city offices into Citizens Tower. Even saving that much is by no means certain.

That maximum $200,000 savings includes nearly $50,000 per year in rents paid for the Lubbock Health Department. We asked Councilman Gerlt if the health department would move into the new Citizens Tower.

"That's a good question. I don't know if the Health Department would go there or not. I think that's one that we're going to have to talk about. What's the value of having the health department in the Citizens Tower?" Gerlt responded.

So, savings would range from $150,000 per year to almost $200,000 per year, again, depending on who you ask.

But one thing both Mayor Robertson and Mayor Pro Tem Gerlt agree on is that we won't know exactly what it will cost to renovate the old Omni Building until the experts have done their job.

"You never know the exact expense until you actually get the construction documents, put it out for bid, and get the bids in," Gerlt said.

While the building does not look much different from the day the city purchased it, council said a lot is being done behind the scenes. Councilman Gerlt said they are evaluating architectural and engineering firms and have issued RFQs for the abatement work.

We have attached two documents below. First is a PDF showing the amount of rent paid by the city of Lubbock in fiscal year 2014. The second is the Omni Building/Citizens Tower feasibility report obtained by the city of Lubbock prior to purchase. It is important to note that the costs projected in the feasibility report do not include the cost of renovating the present city hall to make it suitable for the Lubbock Police Department.

PDF: Omni Building Feasibility Study

PDF: City of Lubbock building rental costs

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