Mishawaka looks to buy Liberty Mutual site downtown and relocate city, police offices

Jul. 5--MISHAWAKA -- The city is taking the first steps toward buying the Liberty Mutual Insurance building downtown and moving its city hall there, along with the police department and the business office of Mishawaka Utilities.

Liberty Mutual announced in February that it would eventually move out and sell the 93,556-square-foot structure and parking that fills two city blocks at the northwest corner of Lincoln Way and Main Street.

Mayor Dave Wood said he signed a letter of understanding Monday to purchase the building. It will take several steps for public approval, beginning with a declaratory resolution that the city's Redevelopment Commission will consider in a special meeting at 5:30 p.m. Monday. The commission will meet in the current City Hall, 600 E. Third St., where a presentation will be made.

After negotiating with Liberty Mutual, Wood said, the city would pay $2.35 million for the building and property -- down from Liberty Mutual's asking price of $5.6 million, for which it was appraised. But the city could possibly do $14 million to $15 million in renovations and alterations to adapt the space -- all of which is still in a conceptual phase, he said.

The city would use revenue from tax increment finance dollars for the purchase. The renovations would tap into other sources, including Mishawaka Utilities revenue and possibly a bond, said city planner Ken Prince, adding that the city wants to avoid raising taxes or utility rates.

It's more building than the city needs right now, leaving it with an estimated 5,000 to 10,000 square feet of space "that we could grow into as time passes," Wood said.

But the city has been exploring the possibility of building a new city hall over the past several years, especially with the several vacant city-owned lots where housing and retail are now being built. Prince said the city had figured on doing it a few years from now, but the sale of the Liberty Mutual building forced it into the present, spurring the city to hire Alliance Architects to study its space needs.

Wood said City Hall has outgrown the space it has had since the mid-1980s, the former Bingham Elementary School tucked into a neighborhood three to four blocks east of downtown.

In the Liberty Mutual building, he sees opportunities for city departments to move out of old classrooms and into larger, shared spaces, making it more of a one-stop shop for the public.

The police station, built in 1995, looks solid on the outside, but Wood said it requires millions of dollars of work for a new roof and new heating and cooling system. The inside is "pretty tattered and worn," is running out of room for evidence and lacks adequate facilities for female officers, he said.

The station would occupy lower-level space in the Liberty Mutual building and have its own entrance.

Mishawaka Utilities' business office, just across First Street from the police station, "looks old, and it feels old," Wood said, adding that much of it can't be used since it's in "bad shape." There had been plans to build new offices when he became mayor in 2010, but he stopped that, feeling it would be better and more efficient in a shared space.

Liberty Mutual built its steel-framed structure in 1985 on land where the city had invested dollars to clear the land.

Members of the city council and Redevelopment Commission toured the Liberty Mutual site Tuesday in an executive session.

"It's a nice building," council President Dale "Woody" Emmons said Wednesday, noting that it appears "well kept."

Before he votes on it, he said, he'd like to see how an architect would redo the spaces. Only conceptual ideas have been drawn so far.

The city has looked at three existing buildings for a new city hall and utilities office over the years, Prince said. It likely would have cost millions of dollars more to build this much of a structure, he said, if you calculate a typical $250 per square foot for construction. The comparison gets fuzzier, he said, if the city had simply built on to the police station and then built a separate city hall and utilities office.

"Ultimately, we think Liberty Mutual is a good value for the city," Prince said.

The cost to adapt the spaces could include cutting through walls to open up a new city council chambers. A storefront space could be created for Mishawaka Utilities. The city also would have to decide whether to keep the all-electric heating and cooling or switch to natural gas, Wood said.

"We can't just move in, turn on the lights and go," he said. "That was part of negotiations."

The deal would bring with it about 300 parking spaces, including a parking lot just north of First Street, most of which would become available to the public.

While the city would lose a major tax base -- a site generating more than $220,000 a year in taxes -- the city administration argues that it will be offset by the new redevelopment now coming up around it in downtown, including whatever would go into the current police and utilities offices.

Meanwhile, Wood said the city is working on ideas to redevelop the current City Hall, possibly as affordable housing or other government offices.

"We definitely don't want to leave a building vacant and abandoned," he said.

Liberty Mutual hasn't announced any plans for its next move so far. In February, the firm had said it would move about half of its 470 employees out of the building by June, having them work at home instead, and explore where to find smaller office space. Glenn Greenberg, a spokesman at the national headquarters in Boston, said Wednesday that employees are still working at the Mishawaka site. Employees there have worked in customer service, personal insurance, commercial insurance, claims and distribution.

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