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Nags Head approves AR Chessen for wellness center, authorizes $2.7M financing through First National
Summary
The Nags Head Board of Commissioners awarded the town’s employee wellness center and workforce housing contract to AR Chessen and approved financing not to exceed $2.7 million with First National Bank at a stated 4.17% interest rate; the loan requires Local Government Commission approval and a deed of trust on 5401 S. Croatan Hwy.
The Nags Head Board of Commissioners voted July 2 to award the construction contract for a new 3,200-square-foot employee wellness center with two four-bedroom workforce housing units above to AR Chessen and to move forward with installment financing to pay for the project.
Staff presented three responsive bids and recommended AR Chessen as the lowest responsible bidder. The advertised base bid and alternates produced the following proposals: AR Chessen, $2,355,219; Sussex Development, $2,397,113; Todd Coil Construction, $4,170,320. The board approved awarding the contract to AR Chessen for the base bid plus additive alternates G1 (second-floor buildout) and G3 (complete sprinkler system and spray-foam attic) for a total contract amount stated in the meeting as $2,338,000; the authorization included allowing the town manager to execute the contract contingent upon town attorney review.
Deputy Town Manager and Finance Officer Amy Miller told the board that the administration recommends financing $2.7 million to cover the contract and related project costs including contingency, furniture, fixtures and equipment, security, networking and landscaping. "The lowest [financing] was First National Bank at 4.17% for 10 years," Miller said, and added that the financing would be tax-exempt and bank-qualified. Miller also said the town will record a deed of trust on the property at 5401 South Croatan Highway and plans to close shortly after the Local Government Commission meeting scheduled for Aug. 5.
The board approved a package of LGC-related resolutions by voice vote: a resolution approving financing terms (not to exceed $2.7 million, with First National Bank and the stated interest rate), a resolution authorizing filing the LGC application describing the project’s necessity, a reimbursement resolution to permit interim expenditures to be repaid from bond proceeds if project work begins before closing, and a budget amendment described by staff as having no net impact because debt service was already included in the adopted budget.
During deliberations, a commissioner observed that the contract award amount came in lower than earlier cost estimates, noting the winning bid was about a half-million dollars less than the originally budgeted figure. No member asked to delay award; the motions carried by voice vote.
Next steps: the manager will execute the construction contract after town attorney review and staff will proceed with the LGC application and closing process; the board expects the LGC to consider the financing at its Aug. 5 meeting.
