Item A: Next Steps on Facility Reserve

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spaces, all situated on a four-acre site. The property meets current space and parking requirements for all police functions currently housed at City Hall and has future expansion capabilities that would allow at least a doubling of current building area under existing planning and zoning regulations. The building was constructed in 1982 to house Pacific Northwest Bell, the precursor to what is now Qwest. Because the building was designed to accommodate an emergency call center, it was built to a higher seismic standard than was required by code at the time. A recent seismic analysis performed by a licensed structural engineer determined that the building can be upgraded to meet essential facility seismic requirements for approximately $500,000 in total project costs. In addition, the building has a largely open floor plan with a multi-zone variable air volume HVAC system making it relatively easy to remodel for use as a Police Facility. Acquisition of the property plus remodeling and seismic upgrades to meet police requirements is estimated to not exceed $16 million in total project costs. Facility Reserve funds could be used for this purpose. Based on current costs at City Hall, ongoing annual operations, maintenance, and utility costs for a Police Facility in this larger building would be approximately $876,000 in 2009 dollars, an increase of $368,000 over current police O&M costs at City Hall. However, the building at 300 Country Club Road was upgraded in 1997-98 to be much more energy-efficient than the current state of City Hall so utility costs on a per-square-foot basis should be reduced significantly. Next Steps for City Hall If all police functions currently in City Hall were to move to a consolidated Police Facility on Country Club Road, relocating the remaining City Hall functions becomes a viable option. One way to accomplish this is for the City to leverage our interests in the Beam Development—and possibly the WG Development as well—to move remaining existing functions in City Hall to leased space in one or both of these developments. In the Purchase and Sale Agreement between Beam Development and the Urban Renewal Agency, the City committed to lease up to 50,000 square feet in the building to be constructed on the vacant parcel adjacent to the Centre Court building. The City's commitment is subject to Beam's demonstrating that they have used their best efforts to secure tenants for the new building. The remaining $6+ million in the Facility Reserve could be used to “buy down” the City’s cost of occupancy. This could allow the City to control the ongoing costs of occupancy while avoiding the tens of millions of dollars in capital costs that would be needed over the next 5-10 years to refurbish and update City Hall for continued use. In this option, we would want to assure that any buildings occupied by City functions have a civic presence appropriate to municipal government buildings. A downtown public safety station could also be included in order to maintain a police presence downtown. Relocating City Hall functions to these developments would help create a municipal government district focused th between the Beam Development at Broadway and Willamette and the Library at 10 and Charnelton. This would be an improvement over the current dispersion of City offices that stretches from the Library to City Hall. Z:\CMO\2009 Council Agendas\M090422\S090422A.doc