Danville police station

During a work session on Tuesday evening, Danville City Manager Ken Larking and Police Chief Scott Booth presented a review of a proposal for a new police department headquarters.

Larking said that a 2016 space needs analysis for the city determined a need for additional space for the police department, which is currently spread out through various floors at city hall and at the library.

“[These are] cramped quarters that long ago failed to meet the needs of the department,” Larking said.

An Request for Proposal was issued in May 2020, inviting qualified developers to respond for the construction of a new facility or the renovation of an existing structure to lease to the city with an option to purchase.

The city received three proposals for lease/option for the purchase of a building to serve as the new headquarters. The winning bid, which was presented by Blair Construction, includes an expected cost of around $17 million for a headquarters located at the former Dan River Mills executive office located at 2291 Memorial Drive.

The developer plans to use historic tax credits to lower the cost of the renovation of the existing building, which will include a combination of historic restoration and new construction for an annex to the existing building.

“This was the most cost effective solution that came to our attention,” Booth said.

For the city to get the best price for the station, they will have to follow a certain structure.

Since cities cannot take advantage of historic tax credits, which the developer plans to use to lower costs, the property will be subdivided, and the city plans to lease the portion of the project needing historic restoration for a period of fifteen years with a First Right of Refusal on the property beginning in the eighth year of the lease. The lease payment for that part of the project will be approximately $965,000 per year. The property has to be owned by the developer for at least five years.

For the new construction, the developer will owner-finance the cost of construction under the following terms: $2.9 million upfront payment towards specific tenant upfits, nearly $550,000 per year for seven years with a $2.8 million balloon payment on the first day of year eight.

If the casino referendum passes, the city will use $5.9 million from the initial $20 million payment from Caesars to pay towards the tenant upfits for the new construction and to set aside two years of lease payments. After the initial two years, Danville will use gaming tax revenue proceeds to pay lease/purchase payments.

If the referendum fails, the structure of the agreement will likely change, anc council will need to decide whether they are willing to raise taxes to cover the costs.

With a new police station, Booth hopes to have the space needed to hold meetings and training, as well as bring the community

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