WILLMAR — On the advice of its city attorney and to the dismay of Willmar Ten Investors, Willmar City Council at its meeting Monday approved having architect and design firm BKV Group come up with its own proposal for the renovation of the JCPenney building for a combined city hall and community center.
Representing Willmar Ten, Kelly TerWisscha addressed the council Monday during public comment regarding the agenda item.
“Seeing that you are considering extending services with an architectural firm regarding the city hall and the JCPenney site is a little (disconcerting) and confusing to me, since my firm is working on the design of the JCPenney’s for our proposal,” he said. “It seems very duplicative to be hiring another firm to be doing the same work.”
Willmar Ten is currently updating its 2020 proposal for renovating the JCPenney building. Its proposal is to buy the JCPenney building from RockStep Capital , which owns Uptown Willmar , remodel the building to the specifications of the city, and then sell the renovated building to the city.
During the discussion of extending the contract with BKV Group, City Attorney Robert Scott explained to the council that if it chose the Willmar Ten proposal for the JCPenney site without a competitive bidding process, it would have to justify that decision by providing a list of findings.
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The City Council approved extending the contract with BKV Group , not to exceed $15,000, to develop a site concept and cost estimate for a combined city hall and community center at the JCPenney building, as well as providing a structural review and plans for a remodeling of the current Willmar Community Center and a site concept and cost estimate for a shared office building for City Hall and the Willmar Municipal Utilities at a separate location.
It is unclear where the shared office building would potentially be located. However, the Willmar Municipal Utilities Commission has identified, but not shared the location, of state-owned land on which it would like to construct a new building. Facilities needs for the Willmar Municipal Utilities have been under discussion for years, though not in combination with city offices.
The current contract with BKV Group is $22,000 for the work that it has done to develop site concepts and cost estimates for a new city hall and community center. The extended contract will bring the total contracted costs for BKV Group up to $37,000.
The council previously agreed to delay a decision on a site location for a combined city hall and community center until May 15 to allow Willmar Ten Investors time to update with hard numbers its proposal to remodel the JCPenney building.
The proposal from Willmar Ten was first presented in 2020 and would have been $10 million. Today, it is estimated the same proposal would cost approximately $14 million to $16 million with increased construction costs and inflation, but specific figures are being compiled now.
When the council agreed to the delay in the site decision, the choices for a combined city hall and community center were between remodeling the JCPenney space at Uptown Willmar or building a new facility at the current community center site on Business 71 North. BKV Group estimates the cost to build a new facility would be between $31 million and $35 million.
In addition to allowing additional time for Willmar Ten to firm up its proposal, the council had also previously approved a structural engineer inspecting the JCPenney building for integrity. That inspection took place Thursday, April 13, with representatives from the city, the city engineer and a structural engineer from Bolton & Menk, representatives of Willmar Ten and the general manager of Uptown Willmar.
With the approval Monday of the extended contract, the City Council will once again have several different options to weigh when it comes time to make a decision — two different proposals for remodeling the JCPenney building for a combined city hall and community center, one from BKV Group and one from Willmar Ten; tearing down the current community center and building a new combined city hall and community center at that site; or building a combined city hall and Willmar Municipal Utilities building in another location and remodeling the current community center.
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While addressing the council, TerWisscha explained that this seemed to come out of nowhere, since there had not previously been any discussion with city staff regarding BKV Group also submitting a proposal for the remodel of the JCPenney building.
“I’m just kind of curious as to where we are at, because we are spending a lot of time, money and effort into this proposal. Now we’re seeing that there’s other things happening behind the scene, as well,” he added, noting the council’s meeting agenda states the need for a proposal from BKV Group for the JCPenney building due to Willmar Ten’s proposal being done without a bid process.
“It has never been communicated to Willmar Ten that that’s a concern,” TerWisscha continued, noting when Willmar Ten first proposed this plan in 2020, the attorneys for Willmar Ten and the city agreed on a method the city could take that would not be violating competitive bidding laws.
“The discussion then was that, as a developer, a build-to-suit method would be the most advantageous and the most cost-effective and the quickest timeline,” he said. “So, if there is concern about that, there’s many other ways to accomplish a project. We were pursuing the same method that was discussed a couple years ago.”
Scott explained to the council how the proposals from BKV Group would assist in coming up with a list of findings.
“In order to make those findings, you need to make an evaluation of what other options are available to the city,” Scott said. “You’re doing your due diligence to essentially assess the findings, as a result of your analysis of what options are available …”
If the Willmar Ten JCPenney proposal emerges as the preferred option, Scott said, “you would need to make findings about why entering into a real estate purchase agreement for property that would require to be improved before closing is the best option and isn’t just an effort to dodge the competitive bidding process.”
Since it seems unlikely that BKV Group will have its proposals prepared by the May 15 meeting, Councilor Tom Butterfield asked if Willmar Ten would be allowed additional time to finish its proposal and all the proposals be presented to the council during one meeting, noting he does not want to see different proposals being presented weeks or months apart.
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“If we can get all this stuff in one night, we can hear all the pros and cons with each of them and finally get this made now, because now we sit there and wait for Utilities to come along, and then somebody else might get involved, and then we’ve got four sites and now we’re kicking it down the road even further,” he said.
Councilor Justin Ask noted that it is unlikely the council will be ready to make a decision May 15, even if all of the options were in front of the council at that time.
“Just because we have a deadline for Willmar Ten to provide us that information by May 15 does not mean for sure that we are done making a decision on this process, in my opinion,” he said.
Councilor Carl Shuldes agreed with Ask and explained his support for extending a contract with BKV Group to submit the additional proposals.
“I think that Mr. Scott nailed it with the due diligence. I think we, and I know this has been going on ad nauseam, but we need to make sure that we’re doing what’s right for the city, and if we need to take a serious look at this next option, I think we need to do that,” he said. “And yes, there has to be a final point where we say we’re making a choice here, but I think this is a viable option that we really need to look at.”
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