City Council members told the public in December of last year that they would purchase the church at 802 N. 4th St. to house city agencies, county agencies and a number of independent human service agencies. The move would place them in one downtown location for the convenience of users, they said.

They did buy the First Baptist Church facilities for about $2 million.

Since then the council has been told that the building may not be suitable at all for the intended purposes. No one has signed up to put an office in the buildings. And experts have said the city’s approach was all wrong to begin with.

Carter and Burgess, the city’s engineering consultant, had issued a report listing about $1.5 million in repairs, alterations and upgrades for the 79,440-square-foot building to bring it to code. That price tag did not include the cost of build-out for tenants.

The council hired architect David J. Mills with F&S Partners of Dallas in February for a fee of $28,000 to advise the city on how to create office space from a church and classrooms.

“What they need is one thing and what they have is another,” Mills told the Telegram on Wednesday.

Mills said the project would mean gutting the interior back to the supports and studs and starting over to cure functional obsolescence, meet requirements of the Americans with Disabilities Act and to simplify the floor plan.

“It’s a challenge,” Mills said.

“I was down there a week ago to meet with the city manager and mayor to give them an overview of our findings,” Mills said. “I’m not sure what the status will be for the project. They say they may wait until after the elections in May to make a decision. The ball is in the city’s court right now.”

Mills would not reveal what he believes the projected cost will be.

“You will have to ask them,” Mills said. “I don’t know how much they want the public to know.”

Mayor Tim Hancock said Mills might have mistaken someone else for him because he was not at that meeting.

“I have no info because I was not in on the meeting and did not know about the meeting,” he said. “You will have to call (city manager) Connie Green.”

Hancock said when the Downtown Revitalization Committee meets after the first of the year the church project will be discussed if it is on the agenda. The committee includes Hancock, council members Fred Latham and Larry Cole and Leslie Hinkle, director of community development.

Green did not return calls Wednesday.

History

The City Council authorized the purchase of the church property at its regular meeting Nov. 28, 2006. The sale was negotiated based on the seller’s appraisal of $3.8 million and without benefit of an appraiser hired by the city. A sale closed Dec. 28, 2006, paying the church $2 million for the property. Funds came from a 2005 combination tax and revenue certificate of obligation.

The council granted First Baptist 18 months of free occupancy with an additional six months if needed at $100 per day until the church could build new quarters on a tract of land it owns on South W.S. Young Drive across from the Killeen Civic and Conference Center.

Directors of five county agencies said they met with Hinkle in April of this year to tour the property with Mills and discuss their needs for space. Agency directors said none had been contacted since.

County Judge Jon Burrows and County Commissioner John Fischer both said the county commission has not been approached with lease proposals as yet.

Ms. Hinkle told the Telegram Dec. 13 the holdup is a feasibility study from F&S to determine if the building’s best use is conversion to office space.

She was asked if some other use is being considered.

“The bottom line, I don’t think we are there yet,” Ms. Hinkle said. “Everything hinges on the feasibility study. After the first of the year we will have a chance to meet on it and present the final format.”

Ms. Hinkle said she contacted the Bell County Health Department, Bell County Indigent Health, Bell County Human Services, Greater Killeen Free Clinic, Families in Crisis and the Head Start Program.

“It’s hard to say who will come in,” she said.

Mills said he has gone through the building and worked up the numbers for the cost of build-out for city agencies and for the county.

“It’s up in the air as far as (other) human services,” he said.

Mills said his plan allocates 30,000 square feet to county space and 16,000 to 17,000 square feet to city departments. He said the church has lots of code issues.

“There are no elevators, and the toilet areas need to be brought to ADA,” Mills said.

“We looked at the Carter and Burgess study, then went beyond it,” he said “Essentially this is a classroom building that is functionally obsolete.”

He said his proposal of gutting the interior would simplify the circulation path.

“It’s a series of buildings added onto over time,” he said. “The floor heights don’t align.”

Experts comment

Len Layne, a commercial real estate specialist in Austin with the Certified Commercial Investment Member designation said he would do everything in reverse from what the city did.

“I’ve been doing this 26 years,” Layne said. “First, you want to screen tenants and see who is serious and what they will commit to. After you get their letters of commitment, you do all your feasibility studies.”

He said studies should show the project makes economic sense and that any pitfalls of remodeling can be overcome in the formula.

“Then you convert letters of commitment to contracts and go to the bank,” he said. “After that you close on a sale.”

John S. Baen, Ph.D., a professor of real estate at the University of North Texas in Denton, who is also a broker, appraiser and real estate partnership specialist, said the city has gone about the process backward. Baen said it’s all about due diligence.

“You start with a feasibility study and approach tenants before you buy property,” Baen said.

He also said the city should have hired someone to do its own appraisal.

“A bank will require a buyer to have his own appraisal,” Baen said. “Public policy should be higher than that of a bank because public capital is more sacred than federally guaranteed capital.”

Recent observations

When the council voted to buy the property, council members Fred Latham, Dick Young, Otis Evan, Bob Hausmann and Larry Cole voted in favor. Council member Ernest Wilkerson voted against. Council member Billy Workman was absent.

The Telegram reported at that time that Latham and Young were both members of First Baptist Church of Killeen. Young asked Wednesday to have the record corrected.

“I’m not a member, but my wife, Theresa, is a member,” he said. “That’s her family’s church. I’m a member at Memorial Baptist. But I do attend services regularly at First Baptist and at other area churches.”

Wilkerson, now a former council member, said in a Dec. 12 interview that he thinks the idea of a central location for human services is worthy.

“But I told them back then they were approaching it the wrong way,” Wilkerson said.

He said he did not think the city negotiated in the best interest of the taxpayers buying a property without benefit of its own appraisal and without doing a cost analysis of buying a tract in the old downtown district and building new. He said he also disagreed with giving the church free use of the building for 18 months.

“I have been told that rain is running through the roof and some of the classrooms are unusable,” Wilkerson said.

The Rev. Pat McDonald at First Baptist denied that classrooms are unusable.

“It’s true we’ve had leaks, but we are in the process of fixing them,” McDonald said. “We had the roofer out yesterday (Tuesday, Dec. 18).”

The Web site for First Baptist indicates $3,765,107 has been raised to build a new church with $1,989,148 of that from the sale to the city.

McDonald said the new facility would cost $6.5 million.

“We will be here at our current location through December of 2009 and perhaps a little beyond.”

McDonald said the trustees would open sealed bids in February 2008 and choose a builder. A ceremonial groundbreaking will follow.

“Three weeks later we will start moving dirt,” he said.

The lease agreement states the church is responsible for taxes and assessments on personal property, and for keeping the interior and exterior plus mechanical equipment in good repair.

The city must pay insurance costs and has the right to enter the premises to make alterations or remodel. Public records indicate the city has insured the building at a cost of $7,797 per year.

Public records indicate the church is included in the budget for $2,512,000. During 2007, $2,056,051 was drawn from a bond issue that includes other projects. The figure includes the purchase price, incidental title expenses and payment of consulting fees related to the project.

Barbara Gonzales, director of finance, said that during 2007 interest only was paid on the certificate of obligation at a rate of 3.25 percent.

The annual cost to the city in the first year at the 3.25 percent rate was about $65,000. The debt service is paid from tax revenues.