Lancaster Square - library and movie theater (copy)

A rendering shows the public library and parking garage complex, center right, proposed for Lancaster Square in the 100 block of North Queen Street. The building in front of the Hotel Lancaster, center left, remains part of the project but will not be a movie theater. 

City Council on Tuesday authorized a bond guarantee of up to $38 million for the library and garage project planned at the former Lancaster Square, now known as Ewell Plaza in honor of Olympic sprinter Barney Ewell.

That’s $3 million more than the $35 million figure in the ordinance when it was introduced last month.

The amount was bumped up out of “an abundance of caution” prompted by an increase in the project’s estimated budget, according to Patrick Hopkins, city director of administrative services.

Due to subsurface issues discovered during recent investigations, the tentative project cost is now $25 million to $28 million, up from about $23 million, Lancaster Parking Authority executive director Larry Cohen said.

That means the expected bond issue will be about $29 million, he said.

The guarantee amount listed in the resolution must be higher than that, in order to meet state regulatory requirements, according to the authority’s bond adviser.

The actual amount guaranteed, however, will be whatever the actual bond issue is, Hopkins said.

The authority, acting at City Hall’s behest, intends to build the library and garage between 101NQ and the Holiday Inn Lancaster, demolishing the abandoned annex that’s there now.

The authority plans to issue the bonds shortly after Labor Day, with closing in late September or early October.

Debt service will be covered by parking authority revenue and City Revitalization & Improvement Zone revenue generated by 101NQ. Some could eventually come from the Holiday Inn Lancaster’s CRIZ increment.

That’s expected to be enough; if it isn't, the authority would have to make up the difference from other revenues. The city’s guarantee would kick in as a last resort.

In other business Tuesday, City Council:

• Passed a resolution prohibiting video gaming terminals, as allowed by a state law passed earlier this year;

• Passed an ordinance permitting the Lancaster Recreation Commission, with the mayor’s approval, to offer recreational programs on city property that the city otherwise doesn't allow. The change will allow the commission to offer youth archery;

• Introduced an ordinance authorizing $9 million in borrowing to fund replacement of the East King and West King street fire stations, setting up a vote next month;

• Passed resolutions in support of a National Latino Museum and of the United Nations Declaration on the Rights of Indigenous Peoples.