The aging and seismically unsafe city hall annex will be replaced by a new $11.87-million building.
Nanaimo Mayor John Ruttan said city staff approved a design-build contract by ICI/Windley to complete a new annex at 411 Dunsmuir St., located right behind city hall, to be completed in the fall of 2012.
The existing annex would have required more than $6 million in seismic upgrades, more than the city was willing to pay for the 70-year old former warehouse purchased 10 years ago for just under $500,000.
The total cost for the new annex – which will include contingencies, moving costs, furniture and equipment – will be around $15.7 million. It will be built to LEEDS gold standards, but won't necessarily seek LEEDS designation because of additional costs and time required by staff.
Ruttan said $11.7 million will come from reserve funds, while $4 million will come from short-term borrowing.
"The short-term borrowing will generate a one-time tax increase of approximately 1.1 per cent starting in 2012 and ending in 2016," said Ruttan, noting money was already set aside for the project and the purchase will not affect 2011 tax rate increases.
He added that the fate of the old annex is uncertain, as it would be difficult to sell or lease as offices due its unsafe seismic integrity.
"We haven't made a decision on that because one of the challenges is the cost of deconstruction is not inexpensive," said Ruttan. "We're looking for expressions of interest in it, but in the short-term period we won't be doing anything. One of the advantages in selecting the location we did is we can leave the staff undisturbed while we're undergoing construction and then make a fairly simple move from one location to the other."
About 200 city staff work in the annex, including the planning department and city managers. City hall itself was deemed seismically sound.