Title
Lease Office Space in the Parking Garage
Explanation
Since the 2000 tax roll the increment has more than doubled from $844,274 to a projected increment this coming year of $1,709,566. The CRA has also added $650,000 in bond funding and a $300,000 line of credit for the National Trust for Historic Preservation to the table for the Model Block project. This increase in funding means that the CRA can more aggressively move forward with key projects outlined in the redevelopment plans.
The CRA has approved one new full-time position and one part-time position beginning in October 2004. One staff person will work full-time for the College Park University Heights district and the part-time person will work in the Downtown district. The Human Resources Department is advertising these positions now. The addition of this staff will mean that the CRA can no longer house the interns in our current location. During any given semester the use of interns can provide up to 60 hours a week of unpaid staff time. These interns/externs are highly qualified students, second year law students, graduate school interns from the Urban Planning program and upper classmen from the College of Journalism. During the summer semester the extern in the CRA office worked with Codes Enforcement to move eight dangerous buildings towards demolition. This project is a high priority of the Eastside Redevelopment Advisory Board and would not be possible without extern support. The intern from the College of Journalism has been responsible for all the marketing materials for the Model Block projects providing a significant savings to the district.
With increased increment and increased staff the CRA is poised for growth. The key to this growth is not only staff but also adequate space and equipment to get the job done. Staff has spent significant time evaluating potential office locations. There were several key selection criteria taken into consideration. These include proximity to City Hall and the Thomas Center, access to pool cars, handicapped accessibility, the landlord's willingness to provide routine maintenance and address any key issues in the building and room to grow. It was difficult to find a space that met the criteria.
At the August CRA meeting staff recommended a lease with AMJ at the Commerce Center. AMJ had agreed to reduce the rate for the space to the amount budgeted and offered the CRA 1,900 square feet at $16.33 per foot, plus $3.00 per square foot for utilities and common space maintenance. The price quote by AMJ included a $25.00 per square foot build out allowance to be paid by AMJ. The CRA was uncomfortable with a five-year lease and offered a two-year lease, however the developer's cost to build out the space could not be amortized over a two-year period and the uncertainty of the additional three years was an issue. Based on this outcome, staff continued to look for another space.
Since the beginning of discussions on the Parking Garage it was always mentioned that the CRA might take a space. It is not uncommon for redevelopment offices to be placed in storefronts to help strengthen the connection with the business community. The Norfolk Redevelopment and Housing Authority has storefront offices on Granby Street. The Norfolk Planning Department's Design Center is also located in a parking garage storefront. After the Commerce Center deal could not be closed staff began to work with Public Works on a space at the garage. There is one space, roughly 1,650 square feet that met most of the selection criteria including the most challenging of the CRA's key criteria, handicap accessibility. Community Development agreed to provide the CRA with one pool car and staff would bring the issue of a second pool car to the advisory boards during the amendatory budget process in January 2005.
Space at the garage was originally quoted at $12 per square for a total of $19,839 annually. The cost of utilities and build out were in addition to the rent. Staff has been working with Finfrock to define the cost of the build out and while additional saving may be possible as the project moves along, build out costs are only estimated at this point. Initial estimates for the build out, $86,000 plus a 10% contingency ($94,600), exceed the amount the CRA has available. Since the CRA has a $1.2 million dollar investment in the garage staff is requesting that the build out costs be shared between the City and the CRA. At present the CRA has $20,000 budgeted in the present 03-04 fiscal year for office relocation expenses. Those funds include roughly $10,000 needed for office furniture, computers for new staff and moving expenses. Since the CRA originally budgeted $32,000 for rent in the FY 04-05 budget and the annual rent at the garage will be $19,839, there is $12,161 that could be used towards the build out. In addition to the $22,161 currently available, the CRA could pay the first years rent up front leaving $52,600 remaining un-funded. A significant portion of the build out expenses would add continued value to the property, a single uni-sex restroom, ductwork for the HVAC system and three windows in the side exterior wall of the building so the City would have benefit from these items (for future retail, office or other tenants) even after the CRA moves.
Fiscal Note
The CRA has $20,000 budgeted for office relocation in FY 03-04, $32,000 budgeted for rent and $6,000 budgeted for utilities in the 04-05 budget.
Recommendation
Executive Director to the CRA: 1) Authorize the Executive Director to lease space for the CRA in the parking garage and to execute any and all documents required; 2) agree to provide $22,161 towards the build out; 3) agree to pay the first years rent in advance; and 4) request the City Commission cover the remaining cost of build out.