City Council approves building License Center and Dance Studio on city land

On Monday, July 7 the Roseville city council approved a motion to move forward with a new building to house the city’s License & Passport Center and Dance Studio on city land.

After several meetings to review additional information and options for the civic campus expansion site design, the city council debated and then voted 3-2 to build a new facility rather than lease space elsewhere and to move forward with building the two-story building on the southwest corner of Veterans Park as shown in “Concept C.”

As a refresher, this new civic campus layout preserves the Veterans Park ballfield and playground (with some improvements), keeps the VFW in its current location, and splits the public works and parks maintenance operations facilities north and south of Woodhill Drive.

In addition to the building to house the license & passport center on the ground floor and the dance studio above, the north side of Woodhill will contain a maintenance building, yard, and salt storage. South of Woodhill, the newest of the existing buildings would be re-used and expanded.

“This option somewhat reduces yard space, and operational efficiency (compared to the original full Campus Master Plan), but it maximizes the value of existing structures, allows the VFW to stay in its current location, and preserves a significant portion of Veterans Park,” according to Jesse Freihammer’s request for council action on June 16.

Building and Leasing Cost Estimates

At the July 7 meeting, city council reviewed cost estimates for the possibility of leasing space for the license and passport center instead of building. They also considered the program needs of the city’s parks and recreation dance programs.

The estimate to build a new, two-story 10,400 sq. foot building to house both programs is $14.5 million.

“This estimate is the worst-case cost scenario for the new building. Of that amount, it is estimated that $11.1 million would be for hard costs (actual construction costs, site contingency, site conditions, and construction cost escalation) and $3.4 million for soft costs (architectural design and construction management fees, surveys, inspections, bidding, legal, and finance costs, and furniture, fixtures, and equipment),” according to the request for council action prepared by City Manager Pat Trudgeon.

Estimates for leasing space on an annual basis:

 The estimated costs in the table above include lease payments, common area maintenance for the property, and taxes. Tenant improvements are not included, but that is typically negotiated for the landlord to provide funds and wouldn't necessarily be an additional cost, according to City Manager Pat Trudgeon.

The License & Passport Center brings in approximately $200,000 per year, so additional funding would be needed to pay for the space either way.

In the presentation about the leasing cost estimates, Trudgeon reminded the council that the city originally purchased the Lexington Shoppes retail center because they were unable to negotiate a lease for more than 3 years at a time. It also allowed the city to transfer the money they had been paying for rent into the general fund.

The dance studio, which moved out of the old Fairview Community Center at the time, does not currently pay any rent since it is housed within that city-owned retail center. If the dance studio were to move to leased space, there would need to be a new source of funding.

"It is important to note that the desire for a new dance studio is based almost entirely on the loss of the current dance studio location, not a desire for drastic upgrades. However, the construction of a new space that is primarily for dance offers a number of opportunities and would certainly be the most advantageous option for the dance program," Parks and Recreation Director Matthew Johnson wrote in a memo.

Funding Options

Building a new building for these programs on city-owned land could be paid for with the regular tax levy or city bonds. Currently, the city is paying off the debt levy for the new fire station and park renewal program. That debt will be paid in 2028, which would open up the option to issue new bonds for the new building.

The original plan had been to pay for it with the half cent sales tax, but residents did not approve that question on the 2024 ballot. Instead, the sales tax was only approved for the new Maintenance Operations Center.

City staff consulted with the City Attorney and the city’s bond consultant and confirmed that construction costs related to the Maintenance Operations Center in the Concept C layout would be eligible for the sales tax funds approved by the referendum.

Public Comment

There was an opportunity for public comment, but nobody came forward during the meeting. Several residents submitted feedback via email and those messages were included in the meeting packet and as a bench handout.

Resident Lindsay Matts-Benson, a parent of a youth dancer and the chair of the Parks and Recreation Commission, wrote in favor of the dance program and her support for Concept C. She encouraged the city council to consider the benefits of the program to the community beyond financial metrics.

“Our community is so lucky to have an affordable and accessible recreational dance program in this city where students can bring their whole selves to the program and be accepted for who they are,” Matts-Benson wrote.

Several wrote about their opposition to the idea of building a new facility for the license and passport center at taxpayer expense, encouraging leasing options instead.

“I thought that if the sales tax to build a new license center pass, the city would lease a new site or continue to use current license center site. If a new center is being built and the cost is borne by residents only and not visitors and users at large, this seems very unfair. Do we need a new license center? Can't we use an existing building?” wrote resident Barbara Bursack LeRoux.

Several emails referenced a $19 million price tag for building a new license and passport center, but the maximum cost estimates for building a new facility top out at $14.5 million.

City Council Debate

Councilmembers Robin Schroeder and Matt Bauer were in favor of leasing space, while Mayor Dan Roe and Councilmembers Wayne Groff and Julie Strahan were in favor of building new on city-owned land.

“I know the argument is that the referendum was about the funding, but the public did not see it that way,” Schroeder said. She wanted to take more time to gather more community input on the decision to build or lease space.

She also raised concerns about how online passport renewals may impact use of the city’s passport center in the future.

“Budgeting is going to be really tight this year. The asks from the fire and the police, they all need resources,” Schroeder said, suggesting that any potential cost savings from leasing could go toward those needs instead.

Bauer proposed that leasing space could open up opportunities for economic development in the surrounding area.

Bauer also said he’s heard from residents who interpreted the ballot question as asking for approval on whether or not to build a new license & passport center, not how to fund it.

“The dance studio was never part of the referendum question,” Bauer said.

The language of Ballot Question 2 stated:

Question 2 - Yes/No
Sales Tax for License and Passport Center

"Shall the City of Roseville impose a one-half of one percent (0.5%) sales and use tax for up to 20 years to collect $12,700,000, plus the costs of interest and of issuing the bonds, to build a license and passport center? By voting "yes" on this question, you are voting to increase the sales tax in Roseville. If one or both questions are approved by the voters, the City is only authorized to impose a single one-half of one percent (0.5%) sales and use tax for the lesser of 20 years or until enough sales tax revenue has been raised to pay for the costs of one or both of the proposed projects."

It is true that the dance studio was not specifically mentioned on the ballot, but it was included as part of the information sent to the state Legislature in 2023 and in city communications about the project.

"We do mention that the new License and Passport Center would also provide space for the City's recreational programs, specifically the dance studio. As such, it was considered as part of the project that the Legislature granted us approval to use sales tax for it subject to voters approving the use of sales tax for that facility," Trudgeon told the Roseville Reader.

The dance studio was not part of the Maintenance Operations Center information, so the sales tax being collected cannot be used for that.

Bauer also suggested that working with the right brokers might lead to a better leasing deal than were in the current estimates.

Groff expressed his preference for building on city land, because even though the upfront costs are higher, the long-term costs are fixed and the city would have equity in the building. He was also not convinced that the changes in how licenses and passports were processed would change significantly enough in the foreseeable future to warrant any changes to the city’s program.

Strahan concurred with Groff, and added that the Parks program would need a place for the dance studio.

“I appreciate that they’ve been coupled together so that the building can be dual use,” she said.

Roe looked at the estimated leasing costs and projected them out to a hypothetical 15-year time span, presuming a 3% increase in rent per year. He calculated $5-10 million spent in that time frame on leasing costs, as opposed to the $14 million to build.

“We’re talking about millions of dollars of expenditures where basically at the end you don’t have an asset for it,” Roe said. He also recollected when the city was leasing space for the license center that there were a lot of capital improvements needed for the space which were difficult to get done since they didn’t own it.

“The council was really concerned about putting over a half a million into improvements into a space that we weren’t sure we were going to have 3 years later,” Roe said. “There’s a lot to be said to having a city facility at the end of this process.”

He was also not concerned about how technology could change the business for license and passports, saying that if the model does go away, at least the city would own the building which could be re-used for other city needs.

Roe went onto say that he realizes there are a lot of misunderstandings about the civic campus expansion project and would not want to make decisions based on people’s incorrect perceptions.

“I don’t want to make our decisions based on a not terribly well-informed electorate,” Roe said.

“That’s on us,” Roe said, acknowledging that the city council could have done a better job communicating with the public about the project ahead of the 2024 election.

Strahan said that the city never intended not to end the license and passport center or the dance program if the funding question got voted down.

Schroeder suggested having an open house and more opportunities for residents to hear about the project, learn about the bonding option, and give feedback.

“I’ve made it very difficult asking why we can’t start over, but a lot of things are down the road and decisions have been made. We don’t have infinite time,” Strahan said in response. She added that the Maintenance Operations Center could not proceed to next steps on how to handle these programs so they could move forward, and continuing to delay would impact that project while the city has already started collecting the sales tax.

She also mentioned that the residents who live near Veterans Park have either not said anything about the new Concept C option or have spoken up in favor of it as a good compromise.

Bauer said he would “question increasing the levy for the program” when the city is facing increasing resource needs from the police and fire departments. He suggested that leasing would allow for more cash flow.

Roe took issue with this statement, saying “The difference between the city and a business is that a business is all about cash flow. We’re concerned about providing services and benefits to the community and there’s a lot of benefit to having something we own and control as opposed to not having that.”

After the discussion, Strahan made a motion to build a new building to house the license & passport center on city land and directing staff to move forward with Concept C.1. The motion passed with a split vote: Groff, Roe, and Strahan voted yes; Bauer and Schroeder voted no.

 Watch the meeting:

New options considered for Roseville License Center and Dance Studio

Roseville city staff and city council are exploring alternative locations and designs for the license and passport center and dance studio.

The Roseville ReaderContributing Writer

Residents to vote on sales tax questions

Two Yes/No Questions for Funding City Projects

The Roseville ReaderNaomi Krueger