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June 25, 2019

4/16/2019 7:29:00 AM
Projected costs mount of renovating, maintaining Petco facility
Utility costs at highway department: $30,000; at Petco, $280,000

Richard Moore
Investigative Reporter

Despite the Oneida County public works committee vote Thursday not to support a resolution to fund $15,000 for a facility condition assessment of the Petco building in Rhinelander - effectively saying no to moving the highway department there - it was pretty much business as usual for the county's Petco study committee Friday, as supervisors continued to gather information about the feasibility and desirability of a possible county purchase.

The resolution for up to $15,000 for Barrientos Design to conduct an inspection still heads to the county board today, where a vociferous debate is expected.

At Friday's Petco study committee meeting, supervisor Mike Timmons, who serves on both the public works committee (the committee of jurisdiction for the highway department) and the Petco study committee, addressed the public works committee's action a day earlier.

"The highway committee yesterday morning, on a 3-1 vote, said we are not in favor of going further - not to move out there," Timmons said. "The building is way too large. The thought is the cost would be extreme with the change of use in the building. The building is a nice facility, but we feel it would not really fit without major, major renovations, and we said no."

Later in the meeting, supervisor Jack Sorensen wondered if that action rendered much of the Petco study committee's work superfluous because much of it centers on the cost and feasibility of moving the highway department there.

"Is all this discussion about the highway department going into the Petco building moot, since the committee has voted no?" Sorensen asked. "The committee of jurisdiction has voted no. They don't want to go there."

The answer is not necessarily, as several members of the Petco committee observed that the county board will make the final decision. And the vote Tuesday on the funding of the inspection could be decisive.

The county board could overrule the public works committee because, while a critical component, the highway department is not the only factor, given that other county agencies could relocate there. Another critical component is whether the county considers its leasing prospects viable.

Then, too, the public works committee could change its mind along the way.

Still, the public works committee's vote was a significant setback for those advocating for the county to buy the facility, and the news wasn't any better Friday as the study committee worked through its 37 feasibility questions and found the cost of relocating the highway facility, as well as the overall cost of renovation, utilities, maintenance, and other necessities, to be steep.

Supervisor Tom Kelly made the point about a quarter of the way through the list.

"I'm not an expert, but we're only on question nine and every question we've had has added money to this project," Kelly said.

As the meeting progressed, and the high cost of refitting and maintaining the Petco facility became clearer - even if not specifically delineated and finally determined - talk of just building a new highway department at a site the county already owns seeped into the dialogue.

"Remodeling costs are always much more expensive than building from scratch," Sorensen said at one point.

Kelly, too, wondered about the wisdom of relocating rather than building.

"Let's assume we pay $4 million for the building," he said. "Then we have to adapt it to our usage. Add another $7 or $8 million. It could conceivably get that high. At $7 or $8 million, now you're at $12 million, and two years ago we had a proposal in front of the county board for $11 million to build a brand new facility that would last generations. So I'm just wondering if we're spinning our wheels here."

The county could have a brand new facility for the same price as getting a redesigned and reused highway facility, Kelly said.

Mott countered with a couple of points. First, the exact cost of remodeling and even the purchase price are still unknown, he said.

Indeed, while Kelly said the renovation costs could easily reach $7 million or $8 million - and others agree with him - at another point in the meeting highway commissioner Bruce Stefonek said he thought that number would be $4 to $5 million.

Based on a $4 million purchase price, that would put a Petco highway department relocation at about $8 to $9 million compared to what would likely be at least $12 million to build a new facility.

But Mott also said he hoped the county would not have to pay $4 million for the building, given that such a large facility in Rhinelander might be hard to unload at its assessed value.

"When this whole thing started out, we were trying to get the cost of the building, and they decided to go with what was on the tax rolls" Mott said. "[They are] very open to negotiations. Stacey [Oneida County Economic Development Corporation executive director Stacey Johnson] had high hopes that it would be very cheap because, first of all, a building of 179,000 square feet sitting in Rhinelander, Wisconsin, is not going to be a hot item on the market, probably. They know that and we know that."

If somebody comes in and wants to buy the building, Mott said, he hopes that happens. If it doesn't, he said, he thought the county was in a good position to negotiate. Then, too, Mott added, he hoped the company had a conscience.

"But our hope is, since, when they bought it, they said they were going to keep this for the foreseeable future and those 290 people had their jobs taken away because the foreseeable future turned out to be four or five years, that they would have some conscience," he said.

So possibly, Mott said, Petco could donate part of the property or give the county a very good price.

Turn off the lights now

As for those overall costs to purchase and maintain the building, a number of items raised eyebrows.

For one, the concrete floor would have to at least have a drain system installed, and probably would have to be replaced entirely because it is a flat concrete floor designed for a dry warehouse, not for a wet garage.

Utility costs also were eye-popping.

"One of the questions I had was about utilities - $280,000 including garbage and trash as opposed to, say, $30,000 at the current highway department," Mott said. "That's a bundle."

But he observed that the county wouldn't have to shoulder the total utility bill.

"Of course, that's a huge cost but some of that cost would be taken up by whoever leases [in the facility]," he said.

Timmons said the Petco maintenance staff was consequential at five or six, and Lu Ann Brunette, the county's facilities director and a member of the study committee, said her department would need to hire more employees if it was in charge of maintenance.

"I have anticipated that we would have to add staff for our department if we are going to be the entity taking care of that building and then leasing space out to the highway department," Brunette said.

That said, total maintenance costs and needs - and how they would be performed - are not yet finalized. One thing that is for sure, Brunette said, there would need to be computer connectivity between that site and the courthouse.

There might be tax implications, too. Mott said Stacey Johnson was looking at the tax impact if the Petco site comes off the tax rolls but the current highway property goes back on with a development by Kwik Trip and possibly a truck stop or hotel or other business.

But, while public works committee chairman Robb Jensen believes the county might come out ahead in that scenario, Mott cast doubt on that assumption Friday.

"That amount is obviously not going to offset $92,000 [the property taxes Petco paid last year on the property]," he said. "But there is going to be an offset and we have to find out if there are ways to lessen the impact on the city and the county."

The committee continued to delve into other ongoing questions about the Petco facility: the need for a ventilation system; security; the costs of being a landlord; how the removal of loading docks for the highway department's use might impact other potential lessees who might need loading docks; the potential involvement of the city of Rhinelander, and more.

None of the questions have been fully or finally answered. Right now, though, the biggest question of all looms today, Tuesday: Will the county board approve the $15,000 needed for an inspection and for an appraisal?

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