Item 2A: Approval of City Council Minutes

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continue working with Beam Development on the possibilities with the intention of moving the project forward. Mr. Zelenka noted that the City owned the 858 Pearl Street building but rented space from the Eugene Hotel building. Mike Sullivan, division manager for the Community Development Division, offered to provide the council with a grid of the leased spaces in the downtown area. Mr. Zelenka reiterated that the City Manager’s job was to ensure the project was done effectively, efficiently, and cost-effectively. Mr. Sullivan related that the City rented small spaces for the Human Rights Commission, the Risk Services Division, and the Police Auditor’s Office, among others. Mr. Zelenka asked if staff thought someone would be interested in purchasing the Atrium Building. Mr. Ruiz responded that had value, noting that Beam had called it an interesting space. He thought it could be used for something other than office spaces. Mr. Sullivan noted that both Opus Development and the KWG Development Partners had expressed interest in it. City Attorney Glenn Klein stated that City code laid out several different processes for selling real property. He said it either involved giving notice to the council and allowing the council to “call it up” or it required a proposal to sell to come before the council. He stressed that the City Manager and staff did not have the authority to sell property belonging to the City. Mr. Zelenka noted that the suggested space rental was $1.89 per square foot and asked the average for the downtown area. Mr. Sullivan responded that it was difficult to generalize about the downtown area. He related that staff had conferred with several brokers. He said the spaces the City currently rented had an average ambient value of approximately $1.25 per square foot, for Class B space. He stated that the U.S. Bank building and the Citizen’s Building leased for approximately $1.80 per square foot. He noted that outside of the city core some of the nicer new Class A spaces approached $2 per square foot. Mr. Zelenka was concerned that the City would commit to renting spaces in the Beam building and would only be provided a “blank shell” for which it would then spend a lot of money to make the space into offices. Mr. Sullivan responded that the agreements included a tenant improvement allowance of $25 per square foot. In response to a follow-up question from Mr. Zelenka, Mr. Sullivan stated that the tenant improvement allowance for 50,000 square feet of space would be $1.2 million. Mr. Clark observed that the City of Eugene offices were largely in older Class B and the Beam Development project would build Class A spaces. He asked if the building across High Street from City Hall was Class A space. Mr. Sullivan was not familiar with that building. He had been in it, but not recently, and recalled that the spaces were somewhat small and were in an odd configuration. He said it was not an open format that could be configured into flexible work spaces. Mr. Pryor, seconded by Ms. Bettman, moved to authorize the Agency Director to sign a purchase and sale agreement between the Urban Renewal Agency and Beam Development consistent with the terms provided in Attachment A. MINUTES—Eugene City Council May 21, 2008 Page 2 Work Session