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CITY COMMISSION AGENDA ITEM |
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Department: |
Planning and Development Services Municipal Court |
Commission Meeting Date: March 20, 2018 |
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Staff Contact: |
Scott McCullough, PDS Director Toni Wheeler, City Attorney |
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Recommendations/Options/Action Requested: |
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Consider the following related to the city leasing space at the Riverfront Mall: a) Approve the city’s lease of 21,385 sq. ft. of the west-side top floor of the Riverfront Mall, 1 Riverfront Plaza, to establish city offices; and b) Authorize the City Manager to enter into an agreement with TreanorHL for architectural design and construction management services to complete tenant improvements at the property at a cost not to exceed $64,000. |
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Executive Summary: |
Defining the Need The City Commission formally received the Management Study of the Development Review Process (Matrix Report) on November 14, 2006. The Matrix Report involved a review and analysis by Matrix Consulting Group of the City’s development process. At that time, the City Commission directed staff to begin to implement many of its recommendations. A status report provided in 2009 is attached and included such actions as merging the former Planning Department and Development Services Department, coordinating better on development applications, utilizing technology to a greater degree, etc.
Amongst primary recommendations of the Matrix Report was to locate the departments together in the creation of a One Stop Shop. A One Stop Shop is a model employed by many cities aimed at providing municipal services through the lens of the customer. It provides one location for a citizen to get most, if not all, their development related questions answered and processes completed. Currently, a citizen may have to visit not only various floors of City Hall, but even different buildings to get information or permits for their project. Since 2006, the city has looked for opportunities to establish a One Stop Shop.
The City has leased and occupied the first floor of the building at 1006 New Hampshire for the Lawrence Municipal Court, City Prosecutors’ Office, and the Human Relations Division since 1998. The current leased space is 6,870 square feet. During certain court proceedings, the courtroom cannot hold the defendants scheduled to appear on that day, causing people to overflow or spill into the lobby. The current leased space also does not provide desirable space for the prosecutors to meet and discuss plea agreements with defendants, leaving such conversations to occur in the hallway, with little or no privacy. Conference room space would be very helpful to the court’s operations. Storage space is also at a premium at our current location. For these reasons, staff recommended the City Commission explore other locations for the court, prosecutors, and human relations functions of the City. These are core City services that will continue to be needed in our community.
Addressing the Need One opportunity that provides particular benefits to the city in addressing these needs opened up on the west side of the Riverfront Mall building adjacent to city hall. Approximately 21,385 sq. ft. of office space is available on the top floor of the west side of the building. Staff proposes that the Planning and Development Services (PDS) Department would establish its One Stop Shop in that space along with moving Municipal Court to that space on an interim basis (see concept plan attached). Benefits of the space include:
1. Enough space to house two city services close to city hall and increase much needed conference room space for both departments. 2. Provides space for Court clients to wait inside (currently there are times when clients are queued up outside of the current building). 3. Ample parking with direct access to the building. 4. Room to secure the building, if desired in the future. 5. More convenient ADA accessibility than currently available for Planning and Development Services. 6. Opportunity to expand to the other floors of Riverfront Mall in the future if the need arises. 7. Opportunity to relocate high volume customer services (Finance Department, for example) to the main floor of city hall after Planning relocates to the Riverfront Mall space. 8. Opportunity to provide greater visual connection to the river and wildlife for the public.
The Proposed Lease Currently, the Development Services division of PDS and Municipal Court lease space in buildings downtown (Riverfront Mall and the Berkeley Building) and the city pays for the utilities. Expenditures to pay for these leases will be used to offset the budget impact of the new lease, but will not fully cover the new lease. Combined, the City currently leases 13,356 square feet at an annual cost of $187,327.70 plus 46% of the tax assessment on the Berkeley Building (Municipal Court). That equates to $14.03 per square foot plus a tax assessment.
Under the proposed Riverfront Lease, the City would lease approximately 21,385 sq. ft. at an average rate of $275,087.15 per year over ten years plus its share (19.24%) of the taxes assessed on the building. This equates to $12.86 per square foot over the ten years plus the City would also be responsible for its utilities.
Summary Table
The two current leases cover almost 70% of the cost of the new lease (averaged over ten years), but the city receives an additional 40% more space at Riverfront at a lower combined cost per square feet. Because the city will begin paying this new lease in October of this year, or earlier if the tenant improvements are completed, a budget revision of three months of Riverfront Mall lease payments, equaling $58,006, will need to be processed to account for the worst case scenario of paying rent at Riverfront Mall, both east and west sides, and at the Berkeley Building if the improvements and move-in are not completed by October 1. If the improvements are completed and Development Services and Municipal Court are able to move in and not pay rent at their current locations, then the amount of additional lease funds needed in 2018 is only $11,174. These issues were not known at the time of completing the 2018 budget.
Preparing the Space The space will require tenant improvements to accommodate PDS and Municipal Court. Staff estimates that the costs to make the improvements will approach $800,000 plus design fees. The current Capital Improvement Plan (CIP) includes $180,000 allocated to PDS for such improvements in 2018 and the remainder of the construction costs will be paid out of the Municipal Courts portion of the equipment reserve fund. The CIP identified Municipal Court improvements of $114,000 in 2018 for security measures and $400,000 in 2019 for tenant finish. The equipment reserve fund would need to be revised in 2018 in order to increase the amount and to spend the total court portion in 2018 instead of 2019. The equipment reserve fund has a balance for the improvements through a special technology fee assessed through court. It’s important to note that costs are only estimated at this time. The project will be bid and the actual cost known once bids are received.
Staff will work to complete the build out of the space by October 2018 at which time a phased move-in to the space is anticipated with Courts moving first, followed by Development Services and then Planning. To accomplish this in the timeframe negotiated, staff recommends using TreanorHL Architects for design and construction document/management services at a cost not to exceed $64,000.
According to the city’s Purchasing Guidelines, suppliers are determined to qualify for Sole Source status when meeting the criteria outlined in Section 2.5 B.
B. Sole Source Criteria
1. The following are the criteria used for determining eligibility for sole source procurement:
a) The vendor is the original equipment or software provider and required parts, equipment, or software are not reasonable available from another vendor; b) Incompatibility or non‐conformity with City‐owned equipment, materials, software, or expertise would require the expenditure of additional funds; c) The vendor provides a unique supply or service and no similar supply or service is available or suitable; and d) The vendor has specific, relevant prior experience that will add value to their work and reduce costs for gathering information.
TreanorHL worked for the city on the original concept plans for the One Stop Shop/Courts relocation to the Riverfront Mall in 2017 in addition to working for the owner of the structure on other endeavors related to the Riverfront Mall and therefore has deep knowledge of the structure and its related systems. TreanorHL is recommended to be a Sole Source supplier in this instance because of the need to maintain uniformity with past work as it would cost more in time and money for another supplier to re-create work that Treanor HL has already completed. This vendor has specific, relevant prior experience that will add value to their work and reduce costs for gathering information.
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Strategic Plan Critical Success Factor |
Effective Governance and Professional Administration Innovative Infrastructure and Asset Management Commitment to Core Services
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Fiscal Impact (Amount/Source): |
Fiscal impact would be: · A net increase in lease expense of between $11,174 and $58,006 in 2018, depending on the timing of tenant improvement completion and move-in, and an additional lease expense of $50,470 in 2019. The 2018 budget will need to be revised and the 2019 recommended budget will include the increased rent amount divided proportionally between departments. · An estimated total tenant improvement expense of $850,000 in 2018. The equipment reserve fund will need to be revised in 2018 in order to increase the amount and to spend the total court portion in 2018 instead of 2019. |
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Attachments: |
Concept plan for top floor of Riverfront Mall building |
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Reviewed By: (for CMO use only) |
☐TM ☒DS ☐CT ☐BM |