ACTION REQUESTED:
Title
Communication from the City Manager with a Request to LEASE a Portion of the City-Owned TWIN TOWERS OFFICE SPACE to TRI-COUNTY REGIONAL PLANNING COMMISSION and to Authorize the City Manager to Negotiate Final Lease Terms and Execute Any Necessary Documents.
Body
BACKGROUND: At Council's direction, the City issued a Request for Proposals (RFP) regarding the lease of the Twin Towers office space in November of 2013. Recently, the City received its first proposal for the space. Tri-County Regional Planning Commission (TCRPC) has submitted a proposal to rent approximately 4,200 square feet of space at a rate of $8.00 per square foot. They would also pay for any utility, insurance and janitorial costs for the rented space. They propose a five-year lease with an option to renew after four years. The core of their proposal is attached.
TCRPC would occupy the space that formerly housed the Inspections Department, including the Director's office at the front of the space (Suite 401). The entire leasable space is about 15,000 square feet, which would leave about 10,000 to be leased to another entity. Given that there are two doors to the full office space, dividing this space for TCRPC still allows for other tenants.
TCRPC would need to have a wall built to separate their space from the remainder. They are also requesting permission to make other improvements to create additional walled offices. This work could be done by City staff or by an outside contractor. If the former, the City would charge for time and materials. The latter would be paid directly by TCRPC but overseen by the City's facility manager. TCRPC has also requested to utilize some of the existing cubicle partitions and to be able to utilize the conference room in Room 420 three times per month for meetings. Those meetings would be scheduled around City needs for that space. The City has little use for the modular furniture and it likely has little value in a sale.
FINANCIAL IMPACT: TCRPC has proposed rent of $8.00 per square foot. At that rate for 4,200 square feet, the total revenue to the City would be $33,600 per year (or $2,800 per month). Currently, in addition to modest utility costs for the unused space, the City is paying condominium association fees of $2,843.65 per month. Please note, this is for the entire 401/402 office suite, not just the 4,200 square feet sought by TCRPC. On a unit basis, the fees equate to about $0.19 per square foot per month. At the proposed rent, the City would essentially have no costs associated with any of the space. Any rent garnered from future tenant(s) of the remainder of the space would be revenue in excess of expenses.
NEIGHBORHOOD CONCERNS: Not applicable.
IMPACT IF APPROVED: The City Manager would finalize and execute lease documents on the terms outlined above.
IMPACT IF DENIED: TCRPC would be notified that the City will not accept their proposal.
ALTERNATIVES: The City Council could outline different terms to be negotiated.
EEO CERTIFICATION NUMBER: Not applicable.
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL'S 2014 - 2029 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Financially Sound City Government, Effective City Organization
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Have an efficient government.
DEPARTMENT: City Manager's Office