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Cost of turning office tower into Greenwood city hall rising

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The cost of consolidating Greenwood city offices in the Presnell Cos. office tower has risen to about $6.2 million, close to what a new building was supposed to cost a few years ago.

Greenwood originally estimated that renovations would cost $2 million, but an architect has determined the city will have to spend nearly twice that amount to make the office tower into the new city hall. Greenwood now is looking at spending $3.9 million on sweeping renovations that include a new electrical system and office space. The money will come from an eastside tax-increment financing, or TIF, district.

The city paid $1.75 million to buy the tallest Old Town building out of foreclosure, as well as two nearby parking lots. And the cost of fixing it up is projected to be about $3.9 million. Unexpected work includes moving load-bearing pillars, controller Adam Stone said.

Greenwood expects to spend another $230,000 on information technology and relocation costs. The city already has spent $250,000 on professional fees, such as for lawyers and architects.

The city decided to purchase the Presnell building largely because there was an opportunity to buy it cheaply out of foreclosure. The city has long wanted to consolidate all its offices into a single building so it doesn’t have to rent space.

Greenwood spent about $2 million in borrowed money to pay for the building and for professional fees related to the purchase. TIF dollars will pay to renovate the building, so that city departments can move in.

The redevelopment commission voted unanimously Monday to declare the project eligible for TIF dollars. That means the panel can later vote to spend an estimated $4.2 million to renovate the building, equip it with fiber optic Internet connections and other information technology infrastructure and move city offices in.

The building is about two miles away from the TIF district, which originally was established to spur new development along the Interstate 65 corridor. The city is justified in using that money in the Old Town because companies that would locate on the eastside look at the city’s overall quality of life, city attorney Krista Taggart said.

She said the remodeled restrooms and upgraded elevators would amount to economic redevelopment since the office building had been in foreclosure for years and had been a drag on new retail, restaurants and other developments in the Old Town area. Greenwood would have suffered the way a northside Indianapolis neighborhood did when the Keystone Tower stood vacant for years, she said.

Fully occupying the office tower will help anchor the revitalization of Old Town Greenwood, which would help draw more businesses to the city since overall community vibrancy is one of the things they consider, Taggart said. Such companies would be most inclined to locate in the eastside TIF, which extends east along Main Street, she said.

Greenwood would consolidate most of its city government offices into the office tower at the southwest corner of Main Street and Madison Avenue. The Greenwood City Council and other city boards would get meeting rooms on the first floor, including one that would accommodate up to 100 people, community development services director Mark Richards said.

Greenwood would rent out the third floor to private offices in the hope of bringing in more revenue, Taggart said.

Currently, the building is occupied by PNC Bank and Marian University. Marian no longer will lease space in a few months, and its classrooms will be converted into office space where city employees will work out of cubicles, Richards said. PNC bank will continue to lease the one-story bank building that adjoins the four-story office tower.

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