Local View: K Street complex a valuable asset

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BY LARRY HUDKINS

During the past several months the Journal Star has run two editorials and two guest opinions touting the benefits of converting the K Street complex into housing.

There is no question loft condominiums are more glamorous than records management. But there is also no question the sale of a publicly owned asset should be done pursuant to an open and fair process, and the interests of the taxpayers should be protected every step of the way.

Yet when the Lancaster County Board of Commissioners raised serious questions regarding whether the proposed sale of the K Street property is in the best interests of the taxpayers, the Journal Star dismisses the concerns as mere “fussing” by the county board (editorial dated October 20, 2005, Loft project deserves enthusiasm).

The truth of the matter is there are important questions about the sale that remain unanswered, and the public deserves answers before the Lincoln City Council authorizes the sale of this property. Moreover, fundamental considerations of public policy underlying whether the property should be sold at all need to be openly debated.

First, how can the City Council be expected to make an intelligent, informed decision about the sale when the appraisal recently performed on behalf of the mayor’s office is kept secret? This independent appraisal is the primary justification for the $5 million sale price, even though the assessed value is presently $6 million. Yet the City Council, county board and public building commission are not allowed to see it.

When City Council member Jonathan Cook recently questioned why the appraisal could not be made public he was given the runaround by the city attorney’s office. You can’t have it both ways. Since the appraisal is the basis for establishing the sale price of a publicly owned building it must be made available for scrutiny by the taxpayers.

Another important question is what is the highest and best use for the K Street complex? When the K Street Power Plant was originally declared surplus in 1987, the city hoped it could be sold to a private developer and converted to housing. However, an architectural review of the building strongly indicated it was not economically feasible to do so, and all proposed sales fell through. Instead, the building showed great promise as a records center.

The K Street complex is now a fully functional records center and office complex with 50 employees. The county runs an efficient micrographics and imaging operation in the building. A long-standing contract with Community Alternatives of Nebraska provides much of the labor, creating vocational opportunities for our residents with developmental disabilities. A portion of the building is used to house important historical documents for the state of Nebraska. In addition, several agencies have their offices in this facility, including the City-County Purchasing Department. With active management and prioritizing of which documents are stored, the K Street complex can meet the records needs of local government for years to come.

A strong argument can be made that the highest and best use of the building is for multi-government records management and office use. If so, does it make economic sense to discontinue this use in favor of another use of questionable feasibility? If it was not previously feasible to convert an abandoned building to housing, why is it now feasible to convert an active facility to such use?

Proponents of the sale point out that the Downtown Master Plan supports their position. However, the City-County Comprehensive Plan clearly states downtown’s role as a center for all levels of government must be preserved: “The city’s government must remain downtown. All efforts should be made to locate local, state and federal offices downtown when expansions and relocations are considered.”

If the K Street complex is sold, it will cost the taxpayers more than $10 million to replace the facility in the downtown area. Leasing unfinished warehouse space at a remote location also is problematic. The city’s estimate of what it will cost to lease space is grossly underestimated. The county board believes the taxpayers will realize significantly lower costs by owning.

As the economy expands and the demand for government services increases, is it wise to sell government property which will be needed for future uses by the city and county?

A close reading of the purchase agreement raises a number of other concerns for the taxpayers. The most troubling provision in the agreement requires the city to provide a right of first refusal on 75 parking stalls in the public lot located east of the K Street complex. The land for this parking lot was acquired from private owners, under threat of condemnation, to serve the needs of residents doing business with the city and county. If one private owner is allowed long-term use of the lot how can other private owners be denied the same use?

The county board strongly supports economic development. At the same time, the board has a fiduciary duty to protect the interests of its constituents. If the demand for downtown housing is so strong, why do the taxpayers need to subsidize the sale of the K Street complex? If the old power plant is sold then the taxpayers must be made whole.

Larry Hudkins is chairman of the Lancaster County Board of Commissioners.