MCEDA plans new $1.3M headquarters
Wednesday, April 23, 2014 1:00 PM
The Madison County Economic Development Authority is moving forward with plans to construct a new $1.3 million headquarters in Canton, despite bids coming in 15 percent higher than anticipated.
The lowest bid by Coleman Hammons Construction of $1,367,000 was accepted with board member Dick Hutchinson the lone dissenting vote.
"I would almost be inclined to roll the dice and rebid it," he said, hoping that a new bid would bring the total cost closer to their estimated amount of $1,115,000.
The cost per square foot for building the 5,500-square foot office is $248/square foot. With site plan and land, the figure is approximately $303/square foot.
The board had a lengthy discussion over how to proceed during a special called meeting on April 17, seeking advice from a commercial appraiser and architect.
Bruce Wood of JH&H Architects in Flowood recommended they accept the lowest bid and said there is a lot to lose during a re-bid.
"We very rarely see them come down in price," Wood said.
He told the board the likely lowest bid to come in after a re-bid would be closer to $1.5 million.
There were seven contractors that submitted bids and Wood said the cost is being driven up by sub-contractors.
"Subs are very important in this issue," he explained. "Let's say five years ago you had eight window subs and now you only have three. Those three that are left are asking for a premium price. The control lies with the subs because they have the least invested in this process than anybody."
Jim Turner of JLT Realty Inc., Madison County's right-of-way broker, discussed cost and values with the board. He said from a commercial property standpoint, it wasn't economically viable.
"It wouldn't support itself commercially," he said. "You couldn't support the cost. That doesn't mean it's not perfect for a public building."
Turner ran two cost estimates from a national company and they came in at $1,033,000 for very good and $1,183,000 for excellent.
"[MCEDA's proposed building] would be considered above average quality," he said. "Excellent is Taj Mahal."
Turner then showed comparable properties on the market with an average square foot cost of $187. The highest was a "quasi-governmental" building at $270/square foot.
Board member Jim Smith, the newest member appointed in the fall of 2013, asked why they would build for $300/square foot when they can buy for $150/square foot.
Executive Director Tim Coursey said they looked at purchasing buildings for the last three years but there hasn't been a right "fit" for MCEDA.
"When we were looking around it was getting something with the right square footage," he said. "It was either too small or too big."
Coursey said they considered getting a building with more square footage and leasing some of the space, but that was something else they would have to deal with.
He said it can be worked out to where they will pay the $5-6,000 each month in rent and put it towards the bank note.
The Madison County Board of Supervisors approved MCEDA borrowing up to $1 million to build a new building last fall.
Wood said they could negotiate some value engineering and may find savings between $50-100,000.