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Novato's Big Dig Begins at City Office Site

Headquarters for city employees starts with excavation at Machin Avenue lot. The completion date is fall 2013.

Heavy machinery is gobbling up chunks of dirt at the site where the city of Novato will debut its administrative offices in the fall of 2013.

This video shows the scene at Machin Avenue, just across the street from the Novato Police Department and a few feet away from Novato City Hall and the Novato Community House. Ground was broken during a July 17.

The $14.5 million project was approved unanimously by the Novato City Council after about 30 years of debate about new city offices. It will be home to more than 60 city employees and be the key cog in the city's renovated civic center complex in Old Town.

Here are more stories about the city offices.

Dave Robertson August 18, 2012 at 07:43 PM
Yes, how wonderful! Spend approximately $250,000 per employee to build a space for them to work! If Novato finds itself unable to pay back the bond money, it can always default like lots of cities are presently doing. Our City Council and Manager have a shopping disorder!
Tina McMillan August 19, 2012 at 05:27 AM
Sigh.... millions of dollars wasted, ongoing structural budget deficit, offices with no public parking at excessive cost, decision to build without a vote ignoring measure D, 40 million dollar bond total bond cost for RDA, RDA defunct county holds city liable for any debt not paid by tax increment, no expected future infusions of cash to general fund, measure F committee questions council's judgement on offices, measure F committee ignored, sense of mistrust between voters and council fueled by decisions without public input....business as usual in Novato....time for change?
Andrew R August 20, 2012 at 02:05 PM
Congrats Novato! Aside from the selfrighteous griping from Dave and Tina, this is a happy event!
Mark Burnham August 20, 2012 at 03:14 PM
andrew this building will go down as the biggest and most irresponsible financial blunder in the history of novato. the city of novato has an annual budget shortfall of $4 million dollars. the city owns tens of thousands of square feet of vacant commerical space. problematic city employee pensions are top of the list of items for our city government to address. and yet in the face of all of this ...the city is building offices on this spot that will be vacant every night and every weekend, remove all day time public parking, and generate zero in tax revenues. the city has readjusted their visitor numbers to indicate less than 40 people per day will visit these offices. this project, simply put, is a complete joke. the novato taxpayers are going to have to foot the bill for an empty building which will house fewer and fewer city employees as each year passes..all the while as 90% of all novato's business is done online. gross financial mismanagement and hideous city of novato planning. happy days!
Tina McMillan August 20, 2012 at 04:52 PM
Moody's: More Calif. cities could go bankrupt http://www.cbsnews.com/8301-505123_162-57495674/moodys-more-calif-cities-could-go-bankrupt/ "(CBS/AP) SACRAMENTO, Calif. - One of the top U.S. credit rating agencies said Friday it will begin a wide-ranging review of municipal finances in California because of what it sees is a growing threat of increased city bankruptcies and bond defaults." "It noted that some municipalities were considering bankruptcy as a new strategy to address budget deficits and avoid obligations to bondholders, an emerging dynamic that could have ripple effects throughout the investment community." "Three California cities -- Stockton, San Bernardino and Mammoth Lakes -- have filed for bankruptcy so far this year. Moody's said they are not likely to be the last." CA cities going bankrupt: First San Bernardino now Duarte http://communities.washingtontimes.com/neighborhood/urban-game-changer/2012/jul/30/ca-cities-going-bankrupt-first-san-bernardino-now-/ "LOS ANGELES, July 30, 2012 — The City of Duarte is following San Bernardino as another California city suffering from severe fiscal problems. According to the City Council of Duarte, the city is going broke. It will consider declaring a fiscal emergency this Tuesday and placing a measure on the November 6 ballot to increase sales tax by up to a half-percent for the next six years."
Tina McMillan August 20, 2012 at 05:00 PM
For the first time in U.S. history a city of more than 200,000 people is declaring bankruptcy to avoid long term pension obligations, bond obligations and to balance their structural deficit. If we look at the patterns of these cities beginning with Vallejo in 2008, one thing is very clear, if you spend beyond your means you risk going broke. The actual cost of the city offices including the value of the land, the time invested by the council and the city staff and the addition of interest to the RDA bonds that were floated to repay the debt is far greater than the $15 million repeatedly stated by the city for this project. Did we need a monument to our city in the heart of Old Town? If this had been put to a vote, using measure D, we could have at least gotten a majority of residents to decide. The council bypassed measure D by using the RDA debt to float the bonds to create a cash infusion into the general fund. What they didn't do was take the money free and clear. Instead they put restrictions on the cash by floating tax free bonds that prohibit by a commercial space, like 75 Rowland, that would have allowed the city to rent back office space to commercial enterprises in order to offset costs or to purchase an existing class B buidling at a fraction of the cost and use the downtown land to create a mixed use public/private partnership. Measure F was suppose to be temporary as was our structural deficit. Do you really think now was the time to build?
Jerome J Ghigliotti Jr August 20, 2012 at 05:31 PM
Although I disagree with almost all of the policy decisions of the current city council, I agree with the downtown city civic center,and I believe that it will be a good investment. The current council has been fiscally responsible. Pension reform may be the breaking point, but fully funded rather than Ponzi funding needs to be addressed from the state level down. Of course, the citizens of Novato do not like council projects and policies of the council they can always circulate a municipal proposition. But if it disagrees with council policies the council can always prevent it from ever being on the ballot. The right to petition has been removed from citizen rights and replaced by official rights.
Mark Burnham August 20, 2012 at 05:39 PM
jerome why will it be a good investment?
Jerome J Ghigliotti Jr August 20, 2012 at 05:55 PM
Because at the end of the mortgage you own the building, an asset. At the end of 30 years of rental you only have a pile of receipts that you can use for kindling to light a fire at a homeless encampment. Also, I approve of the location because it will be a true city civic center at the center of historic Novato.
Mark Burnham August 20, 2012 at 06:14 PM
jerome, no one is arguing that they shouldn't buy versus rent. in any real estate transaction comparables are used to valuate new construction costs and/or purchases of existing space. so any wise investment would require comparing apples to apples...or as close to possible. here is one for you: circle bank is building new one block away. they are building 20,000 sf as well. the cost to build this class A space is $3.9 million. the city of novato is building the same sized space and it is costing taxpayers $15 million. they are both left with an "asset" at the end of the mortgage. using a simple mortgage calculator and using a 5% interest rate on a 30yr mortgage the city of novato taxpayers will have paid $28,988,367 while circle bank will have paid $7,536,975. a staggering differnce of $21,451,392 that will be recouped from yours and my checkbooks. a great investment indeed.
Bob Ratto August 20, 2012 at 06:20 PM
Mark, Good comparison, but the City is borrowing the money at nearly 7%, and that doesn't include the sizable bond underwriting fees, so the total is somewhere around $42MM for the bonds. Right now rents are about say $700k per year, and the bond payments will be essentially double this, so the City needs to find a way to come up with $700k per year in cash flow to fund the additional debt...
Tina McMillan August 20, 2012 at 06:23 PM
Mark It get's even worse. The bond measure floated by the RDA to finance the offices will cost $40 million by the time interest is paid and the debt, which was suppose to remain with the RDA and paid by the tax increment, is not being accepted by the county when the RDA was transferred over. The Housing folks have said if, for any reason, the tax increment can not repay the bond debt then it falls to the city of Novato to repay it. Measure D was created to stop the city from financing government buildings through bond debt without a vote. Measure D said anything over approximately $1.5 million had to go to the ballot. Now we have what will ultimately be our debt and no vote.
Mark Burnham August 20, 2012 at 06:27 PM
bob.. i appreciate the very valid input. i used 5% to make it simple for jerome to compare apples to apples. if the city is borrowing at 7% and circle is lending to themselves at 4 or 5% the difference is actually even more obscene. knowing jerome has never been someone to back away from an argument or fight i would like to hear his thoughts on what you and i have put in front of him. jerome ...where art thou?
Jerome J Ghigliotti Jr August 20, 2012 at 08:03 PM
Nah. I am not going to argue about investment percentages, just as to own verses rent.
Mark Burnham August 20, 2012 at 08:16 PM
jerome you just lost a lot of credibility from where i stand. your statement that current city offices "are a good investment" couldn't be farther from the truth. your inability to back your position with data or some sort of argument is both telling and unfortunate.
Brent Carlson August 20, 2012 at 10:14 PM
I think the parking lot for the City Employees should be open on weekends for the Old Town shoppers.
Jerome J Ghigliotti Jr August 21, 2012 at 01:13 AM
Sorry, but some other sucker is going to have to stand up and get burned at the stake. The system is far too corrupt for me to try again. Try it yourself, fight city hall.
Mark Burnham August 21, 2012 at 03:45 AM
that battle has already been waged jerome. today you chimed in with your 2 cents (1 cent actually) about this project being a wise financial decision. now you cut bait and run when confronted with the plain as day financial facts about this project?? pretty weak jerome. i figured since you stood your ground in front of the city hall and the police chief on everify that this was not in your nature. by the way.. it is not a sign of weakness to change your position on this topic. you have been presented with a very valid financial argument against city offices.. simply wanting offices downtown because they "should be there" isn't good enough.. is it jerome?
Tina McMillan August 21, 2012 at 04:09 AM
I believe it will be used to park city owned vehicles. I can not find this on the website but I recall it being part of the parking study. They claim there is no need for additional parking in Old Town.
Mark Burnham August 21, 2012 at 07:18 PM
tina, getting back to your link here about moody's rating agency chiming in on expecting more city's in cali to file for bankruptcy.. honestly if moody's is taking the time to address this it means that we will see more shortly and far more than the number the anticipate. moody's, s&p, fitch, ambac.. all of these agencies have been notoriously late to the game in predicting defaults and bad news. these agencies failed us horribly before and during the financial crisis and continue to do so with almost every industry where they have an inherent conflict to not let markets get crushed. the bottom line is that it is a lot worse out there than it seems .. ratings agencies coming to the plate with a call for "danger" says its already on top of us.. too late.
Tina McMillan August 21, 2012 at 07:45 PM
Mark This pattern (referring to cities declaring bankruptcy) is truly frightening and could undermine the fiscal stability of the entire state and other states going through the same problems. Providence RI is a city where the mayor was able to negotiate true pension reform with the labor unions and avoid bankruptcy. Having the courage to take this issue on city by city is the only way we are going to create fiscal balance and prosperity. The image of the downtown city offices will always be a reminder that the council unanimously chose to prevent a vote of residents and to move ahead with a project that whose cost is far more than the initial outlay. Even if we had purchased 75 Rowland there would have been the opportunity to generate revenue from rentals and then use the revenue to rehabilitate the community house and/or create a public private partnership to develop the land in Old Town. There were so many options that made more fiscal sense than this one. I believe the council has caring and intelligent people on board which is why it is so disheartening to see the denial when it comes to financial risk. I don't understand how they let this happen and how they can feel it was okay to go ahead without a vote.
Mark Schoenbaum August 21, 2012 at 08:56 PM
Not to mention that by the time the city finishes paying off the building it will be considered old and decrepit and in need of replacement...

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