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Councilors question plan to move School Department

Date: 5/19/2009

By G. Michael Dobbs

Managing Editor

SPRINGFIELD -- Mayor Domenic Sarno described the development plan for the former Federal Building on Main Street as "another big piece of the puzzle," but three members of the City Council are not too sure of the plan that was revealed on Friday.

Councilors Bud Williams -- who is running for Sarno's seat -- Tim Rooke and James Ferrera all expressed serious misgivings about moving the School Department from its State Street location into space in the former Federal Building.

The plan as described by Sarno, Congressman Richard Neal and others at the press event last week would see the non-profit group MassDevelopment buy the building from the government and then lease portions of it to the city for the School Department and Baystate Health Systems for office space. Richard Henderson of MassDevelopment said that some current federal tenants such as the Internal Revenue Service would stay and that additional retail and restaurant tenants would be sought for the first floor.

No member of the School Committee or the School Department was at the press conference.

Neal said he has working on the redevelopment of the building for the past two years and Sarno emphasized the importance of making sure the building was not "going dark."

If all goes well with the final arrangements, Sarno predicted the building's new tenants would occupy late this year or early next year.

With MassDevelopment being a non-profit as well as its announced tenants, the building will not be on the tax rolls, Henderson explained. Only if a for-profit business rents space, would that space be subject to property tax.

The cost to the city would be $500,000 annually to lease the space for the School Department plus $2.8 million upfront for improvements. The building will also benefit from a $3 million Growth District Initiative grant that was announced at the press conference, the grant would pay for the redesign and reconstruction of the public outdoor plaza and the indoor atrium.

Sarno said the city is able to afford the $2.8 million expenditure because of savings found through debt service savings and capital savings.

Henderson said MassDevelopment is "very confident and positive" it will successfully conclude negotiations with the federal government for the purchase of the building. Once the deal is set it must be approved by Congress, he added.

The lease arrangement was first announced at the Finance Control Board meeting last Thursday when it was revealed the city would enter into a lease arrangement with MassDevelopment without going out to bid.

When asked about the process, Sarno said he based his decision on a cost analysis report that showed the $10 a square foot lease charge offered by MassDevelopment was less than the $13 a square foot rate available at other downtown buildings.

"This is going to help the whole downtown area," Sarno said. He added he expects the plan to spur further development.

Stephen Bradley, vice president of government and community relations, said the leasing arrangement is a "competitive market deal." According to Sarno, Baystate will also be investing money into the building.

After the press conference Williams said the deal "sounds great and I don't want to rain on the parade but I would like to see all of the numbers and the Request for Proposals (RFP) [for the building]. They should have shared with the City Council and School Committee."

He described the process the city undertook as "puzzling and mind-boggling." He added that he wonders how the city found the $2.8 million at a time when city employees are being cut.

Ferrera said that he believes a more transparent process that would have involved bidding.

Rooke said that Springfield businesses are assessed with the highest property tax rate in the state and downtown property owners should have had the opportunity of bidding for the lease.

"We don't have to go out to bid on the towing contract, but we do," Rooke said. "We don't have to go out to bid on the special education bussing, but we do. So why not go out for a RFP for [new space for the School Department]?"

Rooke believes the city could have found a less expensive rate through bidding and cited the Sovereign Bank building and Monarch Place as being two of the possible locations.

He called for the release of the analysis that showed the Federal Building as the best location.

Rooke pointed out that at a March 5 meeting of the School Committee, the group -- including Sarno -- voted to make the search for the new School Department headquarters a public process with bidding.

He added that 14 months ago when he was involved in the search the School Department had been informed the former Federal Building was not available as a site.

He called the process to reach the decision as "unconscionable."