August 16, 2018

Study shows multipurpose center for Stephenville could cost $26 million

City gets recommendation to seek a private developer

By RUSSELL HUFFMAN
The Flash Today

The Stephenville City Council has plenty of food for thought concerning the feasibility of a multipurpose center after hearing an hour-long report Tuesday afternoon that suggests seeking a private developer.

Howard Kuhn, president and CEO of The Chesapeake Group called the facility “a no brainer” for a developer, and if stocked with “AAA tenants”’ such as the city’s library, senior citizen’s center, a wellness rehab center and other reliable businesses — there wouldn’t be many worries about defaulting tenants.

Stephenville has been looking at a multipurpose center after the group Leadership Stephenville appeared before the council last year expressing the need for such a facility.

Around 600 respondents’ information was reviewed along with input from 100 local businesses in compiling the report presented by Kuhn.

The idea hasn’t been without public opposition because of the worries of associated costs and potential bond debt or increased taxes; however, Kuhn’s suggestions are directed at privatizing and they go well beyond a senior center, library and a place to hold meetings.

Kuhn proposed the city look at a facility to house a library, senior center, medical business, educational training, catering/kitchen facility and recreation and rehab/wellness area. This would be a process done in two phases with the second part to include a large climate controlled arena, barns and a smaller events area.

It’s an idea with a hefty price tag of more than $26 million as the study suggests Stephenville’s needs call for a facility covering 115,600 square feet spanning and 7-9 acres of land. The cost of the land is not factored into $26 Million figure because the city doesn’t have a site selected.

Stephenville has been seeking creative funding for such a project and without cost to the city and Kuhn delivered several ideas to include naming rights, the sale of existing buildings such as the library, community fund raising, enhanced structures fees and even an increase in room/sales/entertainment taxes.

Mayor Pro Tem Russ McDanel asked if a hotel was in the plan and Kuhn said a hotel or motel is not a part of the study as one of Stephenville’s goals is to fill hotel rooms not add them.

Kuhn stressed several times the projections he was displaying were purposely kept on the low side when it came to revenues. Conservative figures estimate those revenues at $755,000 on the low side and a high of $770,500.

Councilman Rhett Harrison questioned if the survey asked would a person would be in favor of this “If it raised their taxes?”

Kuhn explained the focus of the report was letting the private sector build the project so the survey did not contain such a question.

Harrison’s question was understandable considering one of the potential creative ways to fund such a project could be to raise sales taxes.  Mayor Kenny Weldon stressed the council is only looking at options and no decisions are being made.

Councilman Boyd Waggoner did some research concerning similar facilities in Granbury and Glen Rose that are showing losses. He quizzed as to why Kuhn thought this was happening. Kuhn said he felt it was because those operations are not privately run.

Leadership Stephenville’s Gary Sult said his group was just getting its first look at the report. He wants to know how much of the city’s obligation would be toward the expected revenues. Sult wants to city’s obligation in a 16 percent range rather than flipped around the other way at 84 percent.

If the city were to lease portions of such a facility, the cost of maintenance might also be reduced or eliminated depending on the type of lease. Councilman Doug Svien pointed out the city has already found leasing vehicles to be a cost saver and that it may work well toward other city needs.

The council voted to accept the study and is expected to review it and make revisions and also to study recommendations from Leadership Stephenville and the Stephenville Economic Development Authority (SEDA).

Mayor Weldon pointed out that the SEDA study comes with an extra bonus, because much of the information contained it can be used as SEDA moves forward with its development.

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