The City Council decided last week to amortize construction of a City Hall addition over a 20-year period rather than delay the project for five years, pay cash and save an estimated $4 million in interest. Construction will start early next year.
The city will sell bonds for the $2.9-million project and make annual payments of $345,000 to pay them off, for a total of about $6.9 million. The city will get the money from an estimated $575,000 annual payment it receives from the Galleria at South Bay in Redondo Beach. Lawndale had loaned $8 million to the mall, which is adjacent to Lawndale, to help finance its remodeling in 1985.
Nancy Marthens, a resident who sought to have the matter placed on the ballot, had prepared a detailed plan complete with graphs and charts that indicated that if the city were to save its total annual payment from the Galleria for five years and collect interest, it would have more than enough to pay for the project. She said the city could save nearly $4 million in bond interest payments.
The financial consultants putting together the bond package, Fieldman, Rolapp & Associates of Irvine, agreed that the idea would save the city about $760,000, but said the council's decision should not be based solely on financial considerations, but on a political basis. "Does the city want the civic center now, or is it willing to wait five years?" the consultants asked in an analysis of the proposal.
The council decided 4 to 1, with Councilman Harold E. Hofmann opposing, not to wait.
"This is a project that absolutely has to be done," said Councilman Terry Birdsall.