Meeting minutes from our March 15th meeting will stand approved as distributed unless there are any objections.

Hearing and seeing none, we will move on to our consent agenda, which we do not have today.

So uh we will just move right on to uh the meat of our business.

And we're going to take the first item out of order, uh, reflecting the interest in this item.

That's item number five, which is a informational presentation regarding the 101 Ash Street building lease as well as proposed tenant improvements.

And before starting this presentation, I believe our city attorney has a few comments.

Thank you, Chair.

Some questions came up prior to this committee meeting hearing concerning item number five, which is the 101 Ash Street building lease and proposed tenant improvements.

Just to clarify, item number five is an informational only item.

The committee members are precluded from taking action on this item.

You may ask clarifying questions of staff, but any substantive discussion concerning the 101 Ash Street building building lease and proposed tenant improvements should be done in item number one, which is not an informational item and has the um actual financial adjustments.

Very good.

Thank you for uh for those clarifying comments, and I just want to clarify that it was actually our meeting minutes from our April 25th meeting.

We have that since March 15th.

Those were the ones we just approved as distributed.

So, how much time would you like for your presentation this afternoon?

Good afternoon, Chair.

We need 15 minutes, please, if we can.

Fifteen minutes is yours.

Please introduce yourself for the record and proceed.

Sure.

My name is Stacey Lemetico.

I'm the assistant chief operating with the city.

To my left, I have Adam Jones.

He's the senior budget coordinator in financial management.

And to my right, I have Real Estate Assets Director, Sabelle Thompson.

In addition, in the audience with me today is Chief Operating Officer Chris Michelle, along with other employees and city staff from DSD, Environmental Services, Public Works, and Financial Management to ensure that we answer any questions the committee may have during this hearing.

I'd like to go over an review of the 101 Ash building lease and proposed tenant improvements.

As you know, we issued a comprehensive staff report last week.

And in today's presentation, we'll provide a comprehensive review and update of the 101 Ash Street and potential next steps.

We'll highlight four scenarios of how to utilize 101 Ash, including scenarios 2, 3, and 4, which all include construction.

Please note that none of the scenarios with construction assume that employees will be in the building during construction.

Again, while this information is while this item is an information item, item later in today's agenda does include the appropriation of the proposed fiscal year 19 CIP funds of 26.6 million, 27.6 million, of which 5 million has already been appropriated, 13.2 is allocated to be requested in the next action, and there is also an unfunded allocation in the CIP.

All of this can be found in exhibit G of the report.

Now to begin the presentation, I'd like to start from the beginning.

How did we get to the 2016 recommendation to City Council to acquire this commercial building?

In 2014, in the City Operations Building, which at the time we had 355 DSD staff housed, we experienced significant issues with the HVAC and the elevator.

And in fact, in August of 2014, it was so prolonged with the elevator outage, we used city we paid city staff to run plans and permits up the stairs.

In 2015, the city began to actively look for space for a long-term solution to DSD operations that would include a customer service one-stop permitting facility.

This continued until mid-2016.

As is outlined in the staff report for the lease to own item as presented to council and is included in the staff report as exhibit A, the recommendation brought forth to council was a lease to own, including a five million tenant allowance, which was included in the financing for major improvements to five floors.

Those five floors were the first and second and the six seventeenth, eighteenth, and nineteenth.

Council approved the purchase through a lease to own for the city in which the city will own this commercial real estate at the end of 20 years.

The building has a residual value at the end of the 20 years at 112 million.

Moving on with the timeline, the timeline shows that DSD and other departments began in December of 2016.

This started when city staff procured and hired an architectural firm to begin meeting with city departments on space planning.

In January of 2017, the city took possession of the building.

In ensuring that, in addition to ensuring that DSD was found to have adequate space in which will it in which it will serve as the anchor for development and permitting services for the city for the next 20 plus years, staff began working with departments who were housed in the executive complex on their space needs.

Public works began working with this process in March of 2017, and it was during this time that the development of the proposed fiscal year 18 CIP was developed.

Since the cost staffs were not determined, there was no update to the funding portion, but the project manager assigned knew that staff would not be entering into the building in July of 2017 and updated the move in for fiscal year 19.

Final space planning and drawings were submitted to development services for permitting in the summer of 2017, and they were approved in October to provide the public works department clear direction to move forward with planned specs and construction drawings.

It was during this time that construction began in the privately held building of the executive complex, where approximately 466 employees were housed.

In December of 2017, due to the continuing deterioration of the condition in which we had city offices where employees were housed and the public were visiting, we made the determination to go to the contract in the bidding market for a 20 24-7 work schedule.

While we anticipated a 10% increase in cost, it was also anticipated this work schedule would reduce the amount of time in construction work days and would provide for the city to city employees to fully occupy the building in the fall of this calendar year, as construction was scheduled to begin last month.

The project was out to bid the first week of January, and it was during this time that the end of January, the city was ordered to vacate the building of the executive complex due to the county health shutting down the building for occupancy.

Other space was found for employees currently housed in the building, which include doubling up employees in existing work locations and cubicles, and there are a small lease for 65 of those employees.

It was at this time that the city stopped paying rent in February of 2018 at the executive complex, which was a $2.4 million rent lease, excuse me, due to expire in June of 19.

On March 26, the staff canceled the bids for convenience.

Now I'd like to take you in transition to the scenarios.

These are the scenarios we are offering for occupying the building for the future.