At the July 7 Roseville City Council meeting, the council continued a months‑long discussion about the maintenance operations center plan and the future of the license and passport center and a city dance studio currently housed in the Lexington Shops building.

City Manager Pat Trojgen summarized the preferred campus plan (Concept C): expand maintenance operations on both sides of Woodhill, relocate the maintenance yard north of Woodhill where the Lexington Shops currently sit, and construct a new building on city land west of the existing parking lot that would house a first‑floor license/passport center and a second‑floor dance studio. The plan would leave the VFW in place and preserve the ball field with modest adjustments.

Market and lease comparables

Staff presented market leasing comparables prepared by Tatanka Real Estate Advisors (brokers Steve Cherhart and Ron Moss). Key figures presented by staff were:

- Retail lease rates for a high‑visibility license/passport facility: approximately $13 to $28 per square foot (base rent), with additional CAM/taxes roughly $7 to $13.21 per square foot.
- Industrial/warehouse lease rates suitable for a dance studio: roughly $6 to $8 per square foot, with CAM/taxes around $3.50 to $4.50 per square foot.
- Estimated annual lease cost range shown in the materials: roughly $212,000 to $428,000 per year for a ~10,400 square‑foot license/passport footprint (city staff used the comparables as a baseline); a dance studio in leased industrial space was estimated at roughly $47,500 to $72,500 per year for a smaller footprint, with a practical minimum dance studio size of about 5,000 square feet (staff noted 8,500 square feet appeared in Concept C but 5,000 was a functional minimum).
- Tenant improvement allowances are typically negotiated; Tatanka estimated a common market range equivalent to roughly $2.50 to $3.50 per square foot per year of lease (cumulative over a lease term example) and gave a 5‑year, 10,000‑square‑foot example of $125,000 to $250,000 in tenant improvements depending on negotiation.

Costs to build and debt service estimates

Staff presented the consultant cost totals for a city‑built option prepared by Kraus Anderson: roughly $14.5 million total (about $11.1 million in hard construction costs and $3.4 million in soft costs and contingency). Staff clarified that a construction‑only “apples‑to‑apples” comparison of hard construction cost was about $6.2 million (roughly $330 per square foot) once land, site work, contingencies and soft costs were excluded. Finance staff and the city's financial advisor Ehlers provided ballpark debt‑service examples: a roughly $14.7 million issuance would show about $1.4 million per year in debt service on a 15‑year bond or about $1.2 million per year on a 20‑year bond; staff noted the city's existing debt for fire and parks will retire in 2028 and could be repurposed toward new debt if council so chooses.

Revenue and operational context

Staff noted the license/passport operation currently transfers about $200,000 annually to the general fund because the city owns the building and does not pay rent. If the city leased the license/passport center the existing transfer would likely be used to help pay lease costs and therefore would not flow to the general fund; staff said the fee revenue in the license center fund would not be sufficient to both pay a market lease and continue a $200,000 transfer to the general fund without additional levy or program cuts.

Council debate highlights

Councilmembers debated tradeoffs: lease costs and faster availability versus long‑term asset ownership and optionality. Supporters of building said owning a city facility preserves control and creates a multi‑purpose asset that can be repurposed if program needs change. Those favoring leasing emphasized upfront cost savings, the ability to avoid long‑term debt service and flexibility if passport and licensing models evolve.

Council action

Council Member Strachan moved to proceed with a city‑built, two‑story license/passport center with an upper‑floor dance studio as part of Concept C; Council Member Graff seconded. After discussion the motion passed 3‑2. The council recorded the motion as passed "3 to 2 with Council Members Bauer and Schroeder in opposition." The council gave direction to staff to proceed to the next steps on design and RFP preparation for construction management and final cost estimates. Staff said additional public input and final cost/bid information will come back to council before any debt is issued.

Ending

Council members said further public input and refined cost figures will be part of subsequent steps. City Manager Trojgen and finance staff told the council that bonds would be issued only after final design, competitive bids and confirmed project cost; staff also described financing options including capitalized interest and the possibility of modest overlap with retiring debt service in 2027–2028. The council's decision to build initiates design and procurement steps but does not yet obligate final financing until firm bids and a future financing resolution are approved.