Plans for the Les Gove Community Campus call for a 20,100-square-foot community center on the park’s south end plus a new activity center-gymnasium east of the Auburn Senior Activity Center to the north, at a total cost of $12.7 million.
City officials originally had proposed building the community center first, in the summer of 2010. But economic realities have led officials to reshuffle the construction plans.
As outlined in a resolution adopted by City Council on Monday, the City will start building the $2.8 million activities center-gymnasium this year and work on phase 2, the community center, later when the economy perks up.
The Boys & Girls Club of King County has proposed to invest in the construction of the activities center and via an operating agreement to be a partner in its operation. The activity center-gymnasium would be in part a remodeling of the current Auburn Parks, Arts and Recreation Administration Building.
Councilman Rich Wagner, chairman of the Community Center Committee, said the overall funding proposal is to draw from multiple sources while leaving the taxpayer-supported general fund that pays for most of Auburn’s daily operations untouched, as follows:
• $3.3 million real estate excise tax. Anyone who sells real estate in the city pays this 0.25 percent tax, and the City can use the money for construction only. Sellers must pay additional elements of the tax, some of which have fewer restrictions on their use but most of that goes to the state. The City has received about $1 million in revenue each year for the past 10 years, but during the recession it is receiving about half of that. For the past eight years, the City has put most of that amount into a savings fund for a community center.
• $500,000 from solid waste utility fees. For decades, the City maintained a $1 million reserve in the solid waste fund in case the contracted garbage collection company failed to perform, for example because of labor strikes. The City kept the reserve so it could operate its own collection service for a period of time if that proved necessary.
“It has been determined that $500,000 is sufficient to allow for this contingency,” Wagner told the Reporter in November. “Since all Auburn citizens have paid into this solid waste fund through their garbage bills over the years and all of the Auburn citizens will benefit from the community center, it was determined that this fund transfer made sense to return value to the citizens rather than keep an abnormally large reserve fund.”
• $3,500,000 worth of new market tax credits (NMTC). This is a complex federal “grant” process wherein a bank makes a loan for the project that the City does not have to repay. Instead, the federal government allows the bank seven years worth of income tax credits so it can recover the cost of the loan plus a reasonable amount of interest. Through the terms of the NMTC program, the City and or a newly created NMTC ownership entity will own the property and build the community center and activities center.
“It is a complicated process, and it is not a done deal yet, but it has great promise,” Wagner said.
• A $1,900,000 Boys & Girls Club contribution to the Activity Center, which is 50 percent of the cost of the building. The City is negotiating this agreement, which will allow the B&G Club 50 percent of the use of the Center.
Councilmembers in November authorized Mayor Pete Lewis to apply for a Housing and Urban Development (HUD) Section 108 loan of up to $2,033,715 to help build both projects.
Wagner said the City would repay the HUD loan at $150,000 a year over 20 years using the $400,000 it receives through annual community development block grants (CDBG). The CDBG funds have to be used for construction of community facilities.
Based on population, CDBG has been a source of about $450,000 per year for the past 10 years, and that amount is expected to climb to about $600,000 when the federal government takes into account Auburn’s newly annexed population, Wagner said. This allows $150,000 to be used for the loan repayment without reducing the amount that local non-profit agencies like Auburn Youth Resources have historically received in funds from the City’s CDBG allocation.
Based on how the final plans shake out for both the community center and the activities center, the City can choose to accept or decline the loan even after the application is submitted and HUD authorizes the loan.
