The cost of the Manhattan Conference Center expansion has risen from originally planned, but city commissioners Tuesday approved a contract amendment to avoid impacting property taxes.
The city agreed to a $3.5 million, 14,000 square foot expansion in January of 2019, but HCW-Manhattan LLC says demand on subcontractors in the region due to various ongoing projects including NBAF increased the costs to a $4.99 million price tag. To reduce the impact of the costs, the city will commit an additional $500,000 of sales tax-funded Economic Development money and four years of Transient Guest Tax revenue to reduce the principal cost to $3.79 million. HCW also agreed to pick up $1.79 million of the expansion costs, up from $800,000, and to increase annual payments by $10,000 to cover interest costs.
Breaking it down, the annual debt service for the project is estimated at $280,000. $130,000 per year is anticipated to be covered by TGT, with $90,000 more in TGT to be applied to the debt once STAR bonds expire in 2021 and $10,000 is coming from HCW directly. There is a funding gap of $50,000, which HCW and the Convention and Visitors Bureau will split if TGT doesn’t cover the balance.
“There’s potential that that Transient Guest Tax will actually generate more than $130,000 annually,” says Deputy City Manager Jason Hilgers. “With the addition of the hotel in Aggieville — that’s more rooms, that’s more inventory. We used to be operating at 1,420 rooms, we’re down in the 1,260 range right now.”
HCW is also planning to spend an additional $6 million in improvements on the center, from renovation of the existing conference area to expanding its number of rooms at the Hilton Garden Inn, and expect the current expansion to take 12 months to complete.
Mayor Pro Tempore Usha Reddi says she’s a proponent of the expansion, but there was some sticker shock seeing the price increase.
“The measures you laid out as far as financing seem suitable for now, but $1.5 million is huge,” says Reddi. “I just want to make sure when things like that happen and even as we move forward with this that we’re always on the more conservative side on the higher price tag.”
Commissioner Linda Morse says she thinks the expansion is necessary for Manhattan to compete with other cities as a conference destination, but expressed disappointment about the cost increase.
“I almost feel like we don’t have a choice, that we have to proceed,” says Morse.
Commissioner Wynn Butler liked the plan, saying bringing down the principal saves the city money in interest. He also noted that the debt service for the original $10 million building still has the potential to fall on property taxes, though the city has more utilized economic development money for the balance of late.
“I think this one’s thought out a little bit better because there’s no way that this is going to end up on the property tax bill like the first one was so this is a vast improvement,” says Butler.
Commissioner Jerred McKee was hesitantly supportive, as the vote on the 0.3 percent sales tax ballot question which ultimately failed was still coming in during the meeting. He was unsure about committing TGT to the project as its failure means they have to take a close look at all projects they have planned.
“Frankly, the money just isn’t there to do all of them,” says McKee. “I think on this first reading I’m supportive, the second reading, depending on the results of tonight, I might be a little more hesitant.”
Joint Maintenance Facility
Manhattan Commissioners approved moving forward with land acquisition for a joint maintenance facility while holding off on any other plans as they awaited the results of the sales tax vote.
The city is looking to consolidate facilities to maintain public works street and fleet, park maintenance, and forestry division equipment due to their age, wear and tear and inability to accommodate staff as well as hold some of the vehicles needing work such as firetrucks. A feasibility study found building the facility adjacent to the wastewater treatment plant best fit their needs, had room for future expansion if needed and avoided taking property of the tax rolls. The acquisition is estimated at $710,000.
If the facility is constructed, three of the four current maintenance buildings would be sold for an estimated return of $1.6 million, taking a chip off of the total $11.9 million price tag for the project. The annual debt service of more than $850,000 is planned to be divided between various funds including enterprise funds like the water and wastewater funds as well as 7 percent or $64,000 per year of which would fall on the property tax funded bond and interest fund.
Mayor Mike Dodson says the balance planned to be drawn from enterprise funds has already been forecast and planned for in future projections.
“[It’s] not taking away from anything else, we’ve already factored that into the equation when we did the rate study and forward,” says Dodson.
Commissioner McKee was hesitant over concerns about levee funding, for which Manhattan is responsible for $13.4 million, considering the sales tax vote.
“I realize this has all been forecasted, but the forecast changes when tens of millions of dollars we were planning on isn’t there,” says McKee, adding that while he’s supportive of the acquisition they may need to take a critical look at the project and all other projects on the docket.
Other commissioners shared similar concerns about funding, opting as a result to hold off on approving $1.1 million in design costs but did approve signing a construction manager at risk for the project if it should occur.
“I would hate to obligate ourselves in a position where we can’t follow through,” says Reddi.
Commissioner Butler says the sale of three of their existing facilities and them re-entering the property tax rolls has the capability to offset the amount planned to be paid from the bond and interest fund, though he hasn’t done the calculations. He says not g oing forward with the project would do “long-term damage on how the city operates.
“If you can’t maintain your fleet, we can’t remove the snow, we can’t fix the potholes, we can’t do anything,” says Butler. “And you can’t have your maintenance crews working out there in atrocious conditions.”
Public Works Director Rob Ott also address floodplain concerns, saying they’ll elevate the land to follow existing regulations and that proximity to the levee will also provide added protection.
Vaping ordinance
Manhattan took the first step toward banning vaping in public areas, restaurant and bar patios as well as in vape shops among other places Tuesday. They passed a first reading of an ordinance by 4 to 1 vote.
The ordinance, requested for consideration by the Flint Hills Wellness Coalition, combines the city’s smoking and vaping laws and extends some of the restrictions for both acts. Additional provisions ban smoking in vaping in all Parks and Recreation facilities and outdoor areas as well as in taxis and rideshare services or within 20 feet of windows and entryways.
The city first regulated smoking in public in 2009 as a result of a voter initiative, which mandated it couldn’t be amended for 10 years, prohibiting smoking in tobacco stores as well. As they couldn’t amend the law, the city created a separate vaping ordinance which allows vaping in vape stores. City administration said the treatment was unequal and recommended the commission either allow both smoking and vaping in such shops or ban both altogether — of which they opted to do the latter.
At an October meeting, multiple vape store owners advocated against the bill, saying it harms their business model and that many of the recent cases of lung illnesses from vaping are linked to the use of blackmarket THC cartridges and not e-cigarettes. Commissioner Wynn Butler, the sole vote in opposition, called the ordinance overreach and discriminatory and says restaurant owners don’t care for it.
“One of them told me it’s even worse — it’s not so much the customers, it’s my staff that smoke,” says Butler. “What happens is if they can’t go back out there on the patio then they’ve got to go someplace farther and it disrupts […] my ability to run my restaurant.”
Commissioner McKee called the discrimination descriptor “appalling,” saying it’s a public health issue that affects the health of those around the user.
“I think it is 100 percent reasonable to make these businesses follow the same laws that we make every other business in this community face,” says McKee.
Commissioner Morse agreed, questioning what would happen if a vape shop merged with a tobacco store.
“Look how many years we put off making decisions about smoking before we acted as a society and as a city,” says Morse. “I think we learned from that and we should be proceeding with the recommendations of the Center for Disease Control, the U.S. government, our local Riley County Health Department, the Wellness Coalition.”
Mayor Dodson says when they passed the 2016 ordinance on vaping, there was a big onus that they would be helpful in use for quitting cigarettes. He says he shares some of Commissioner Butler’s concerns, but that “coming down on the side of safety and health is probably a good thing.
“But we went through this with cigarettes and arguably had steps not been taken, we’d still kind of be in the same condition where people are smoking around us,” says Dodson. “It’s taken us quite a few years with simple steps to push back to where the authorized use of cigarettes would be.”
Fines for violations listed in the ordinance are not to exceed $100 for first time offenses, not to exceed $200 for the second and not to exceed $500 for the third within a one year period. It also requires that businesses include a no vaping sign in addition to currently required no smoking signs. Fines would also be issued to managers and owners of establishments in violation.
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