REDMOND — After years of discussion, Redmond City Council gave staff the green light Tuesday night to pursue remodeling Evergreen Elementary School into a new City Hall.

The city purchased the former school site in 2010 for $250,000. At the time early estimates for rehabilitation were about $7 million, but the city has since cited figures closer to $8 million to $9 million. Before the recession, Redmond explored the idea of building a new City Hall on its existing site, estimating a new building would cost approximately $7 million. It even set aside a $2 million reserve for the new building and chose a preliminary design, but the economic crash stalled that plan and dwindled the reserve balance. When the Evergreen site, which covers a city block, became available a few years later and a citizen task force advocating saving the historic building appealed to the city to buy it, plans for a new building were shelved.

According to Jason Neff, city finance director, a friendly bond market and comfortable general fund have prompted staff to research the feasibility of moving forward with a new City Hall.

“We’ve been able to add back some core deficiencies (referring to city services and staff) recently, which was a big priority for the city,” he said. “And we still have historically low interest rates so it seems like a good opportunity to consider this.” As an example of the possibilities if the city would decide to incur bond debt for the project, Neff told the council that Redmond could easily afford $400,000 in annual payments, if a $6 million loan was financed for 30 years at 5 percent.

In that scenario, $1.5 million would be available from the city’s Urban Renewal District and possibly another $1 million from city reserves. Slightly under $500,000 is left in the City Hall building fund. A public/private partnership is also a possibility staff will be investigating.

Councilor Jay Patrick asked about whether the estimates cover just the main historical building or all three of the structures on site, which include a gymnasium and a 1950s-era classroom wing. Community Development Director Heather Richards explained in response that because the block contains no parking or drainage — required by city code — “one of those buildings will have to go.” But no decisions have been made as to which one.

The council’s decision moves forward an eight-month architectural planning and public design period, with construction to begin as soon as February 2015 and ending after about one year. All the approximate dates are contingent on no unforeseen discoveries in the 94-year-old building, which needs significant work. Early engineering inspections resulted in estimates of $1.5 million in electrical and HVAC work alone. Another $500,000 is estimated for safety issues, from fire code improvements to lead paint and asbestos abatement.

Initially the city does not expect to use all 35,000 square feet in the main building, so part of the funding formula could come from leasing space. According to Neff, the city is in discussion with potential tenants.

“This is exciting for Redmond,” Bill Groetz of Redmond told the council. “I know times have been tough, but I’m glad to see council finally approaching this project.”

— Reporter: 541-548-2186, lpugmire@bendbulletin.com