Finance Committee Meeting Summary – December 10, 2024
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Finance Committee Meeting Summary – December 10, 2024
The Winston-Salem Finance Committee met on December 10, 2024, at 4:00 PM to consider three agenda items: a contract for dehumidification unit upgrades at the Fairgrounds Annex, the establishment of a speculative building loan program, and capital expenditures for the Benton Convention Center. All three items received unanimous committee recommendations for approval and were referred to the City Council for consideration on January 6, 2025. The meeting adjourned at 4:35 PM.
Discussion Items
G-1: Resolution Authorizing a Contract for Dehumidification Unit Upgrade at Fairgrounds Annex – Ridge Mechanical – $1,453,540
Assistant City Manager Ben Rowe presented the item, noting it is the second major investment in the Fairgrounds Arena (ice rink operations). The first was the ice rink reconstruction approved in November 2024. The dehumidification system replacement is needed to maintain proper climate control during late-season hockey games. The project is funded from limited obligation bonds approved in 2023 (total $3.5 million allocated for Fairgrounds improvements). The low bidder did not meet MWBE subcontracting goals (7% and 4%), so the contract was awarded to the second low bidder, Ridge Mechanical Inc. The combined cost of the rink reconstruction and dehumidification is just over $2.6 million, within the authorized budget. Council Member Scippio asked if work would occur during the season; staff responded that the ice rink work will happen in June after the season, and the dehumidification can start during the season because the existing system is sustainable.
G-2: Resolution Establishing a Speculative Building Loan Program to Support Developers in Job Creation and Investment Projects
Ken Millett, Director of Business Inclusion and Advancement, presented the item. He explained that spec buildings (speculative buildings) are partially constructed industrial facilities that attract tenants quickly. Approximately 50% of companies prefer spec buildings. Winston-Salem currently has no spec buildings over 100,000 square feet, putting it at a disadvantage. The city previously provided ad hoc loans for three spec buildings (at Union Cross Industrial Center and Park at 74), which resulted in over $50 million in capital investment and about 175 jobs; two loans were repaid ahead of schedule, and the third is expected by end of 2024. The proposed program would create a $7.5 million revolving loan fund with interest-free loans covering up to 10% of hard construction costs. Loan repayment is due upon tenant occupancy and sale/refinancing, or within five years. Maximum loan amounts: $1.5M for 100,000–150,000 sq ft, $2.5M for 150,000–300,000 sq ft, $3.5M for over 300,000 sq ft. Buildings must be completed within 24 months of loan approval. Eligible projects must be within Winston-Salem city limits and target non-local companies, though existing industry expansions creating significant net new jobs are also eligible. Financing sources: $2.5M from repayment of prior spec building loan, $2.5M from Economic Development Loan Fund, $2.5M from Economic Development Sites and Infrastructure Fund. Remaining balance in the latter fund is about $5.6 million, and about $3 million in undesignated funds in the Economic Development Loan Fund. Council Member Scippio raised equity concerns, asking whether spec buildings could be placed in areas more accessible to job seekers and whether the program might create inequities. She requested a history of all spec buildings the city has invested in, including locations, tenants, job counts, and repayment timelines. Mark Owens, President and CEO of Greater Winston-Salem, Inc., stated that the region has lost prospects due to lack of spec buildings; about half of 60 active projects require them. He gave the example of an elemental beverage company that first occupied a spec building and then built a 615,000 sq ft facility adjacent. The committee voted unanimously to recommend approval.
G-3: Consideration of Items Authorizing Capital Expenditures for the Benton Convention Center (North Ward)
Ben Rowe presented three components: (1) a sole source contract with Schindler Elevator Corporation for freight elevator modernization ($420,695 total, including cab enclosure); (2) repurposing $1 million previously budgeted for a roof replacement to address immediate major maintenance needs (elevator, partial roof repair to stop leaks into the kitchen, lighting in the Winston Ballroom, and a facility assessment of back-of-house systems); (3) setting aside an additional $250,000 for unforeseen major maintenance, bringing the total reserve to $500,000 with the existing budgeted amount. He noted that the Benton Convention Center saw record revenues approaching $6 million in 2024, and the city subsidy dropped to under $500,000 in 2023. The roof replacement was estimated to cost well over $1 million, so staff recommends a patch repair now and a comprehensive study for future funding. The freight elevator is currently inoperable, forcing expensive manual labor for moving equipment. Lead time for parts is about 10 months. Mayor Pro Tempore Adams and Council Member Scippio spoke in support, noting the center’s age (built in two phases: late 1960s and early 1980s) and the need for ongoing maintenance. The committee voted unanimously to recommend approval.
Committee Orientation
City Manager Lee Garrity provided an update on upcoming January events: a civility program on January 2, a legislative breakfast and tour on January 24, a strategic plan retreat on January 29–30, and essentials for newly elected officials on January 9–10. He also mentioned the possibility of holding some committee meetings at alternate locations to view facilities.
Key Outcomes
- G-1: Motion by Mayor Pro Tempore Adams, seconded by Council Member Scippio, to recommend approval. Vote: 4-0 (Clark, Adams, Taylor, Scippio all aye). Referred to City Council on January 6, 2025.
- G-2: Motion by Council Member Taylor, seconded by Council Member Scippio, to recommend approval. Vote: 4-0. Referred to City Council on January 6, 2025.
- G-3: Motion by Mayor Pro Tempore Adams, seconded by Council Member Scippio, to recommend approval. Vote: 4-0. Referred to City Council on January 6, 2025.
- Staff directed to provide Council Member Scippio with a history of all spec buildings the city has invested in (locations, tenants, job counts, repayment timelines) and details on funding sources for prior spec building loans.
Meeting Transcript
I'm a call to order the December 2024 last finance meeting of the year. Welcome everybody here. For our new council members, we traditionally have a consent and a general agenda like all the other committees, but today we have no consent items. And we have four. No, three general items. So we will start with G1. If the clerk will please read that one. Item G1 resolution authorizing a contract for the dehumidification unit upgrade at Fairgrounds Annex. Mr. Rao, before you start it, if you'll please comment. I think we've spent some other money here recently. If you could comment on both of those, because the last time you mentioned dehumidification was coming. So give us a little history and tell us what we're doing. Yes, sir. Good afternoon, Chairman Clark, Mayor Joins, Mayor Pro Tempori, Adams, members of the city council. So the item for you today is is the second of two major investments that we're planning to make in the um what we now call the fairgrounds arena, our uh ice rink operation. So I believe it's either at the uh last council meeting or in November, you all considered an item for the reconstruction of the ice rink. Um that that rink was original to the building when it was built in 1989. And that's the cooling system that makes the ice. That's correct. All the piping, everything. So that project is going to involve you know demolishing all the concrete, replacing the piping, uh, all that infrastructure that that we need to have in place to be able to create ice, you know, for the ice season, which includes the Thunderbirds hockey season, youth hockey, adult hockey, the ACC hockey league, all the various ways that we we have uh ice business up there. Um so this item before you is the second major investment. I kind of hinted at it at that meeting that uh in addition to the ice rink, we also need to replace the dehumidification system uh for that building. We want to make sure that we have the proper can maintain the proper climate in the building so that we don't have any risk of of the ice literally you know melting. Uh oftentimes the thunderbirds will play into you know late March, even early April, and so if it gets warm, it could really kind of create uh uh a climate that that we really don't want. So uh you know this project is being funded from uh limited obligation bonds that the council approved back in 2023. You all approved 3.5 million dollars for uh uh and lobs to address these kinds of issues for the fairgrounds. This particular uh project, we we did go through the traditional bidding process. Uh the the low bidder did not meet uh in the the NWB contracting goals and did not demonstrate good faith efforts, so we went to the second low bidder who did meet the uh NWB subcontracting goals. I think are seven percent and four percent uh for for the project. And so the item before you is a resolution to recommend awarding the contract to Ridge Mechanical Inc. uh in the amount of one million four hundred and fifty-three thousand five hundred and forty dollars. So that combined with the contract that you all awarded for the ice rink uh reconstruction totals just a little over two point six million dollars. So we were able to do this within the budget that you all had authorized uh a couple of years ago. Be happy to answer any questions. Any questions? And by the way, I think the question was asked at the last time when we were talking about replacing the ice about kind of do we make any money on the Thunderbirds and that's in here, and we do make some money on it. We do. And Mississippi is an ex is the hockey expert. So if you have your questions, she goes to the game. I'm the hockey fan. And a hockey fan. Yes. Any questions, comments? I do have yes, ma'am. Uh, with these uh repairs and renovations, are they gonna be concurrent with the system we're gonna be doing while the they're playing the season, or do they wait until the season is over for this year? So the ice rink reconstruction will occur you know after the season. We have a very narrow window that we want to do it in probably sometime in in June, so that we can have the floor restored you know before the the uh Carolina Classic Fair, because we do obviously utilize the arena for the fair. Uh so we'll have all that in place.
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