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Home My WebLink Aboutord2024-017R E Whatcom County Agenda Bill Report File Number: AB2024-179 COUNTY COURTHOUSE 311 Grand Avenue, Ste #105 Bellingham, WA 98225-4038 (360) 778-5010 File ID: AB2024-179 Version: 1 Status: Adopted File Created: 02/23/2024 Entered by: MMiterko@co.whatcom.wa.us Department: Finance Division File Type: Ordinance Assigned to: Council Finance and Administrative Services Committee Final Action: 03/19/2024 Agenda Date: 03/19/2024 Enactment #: ORD 2024-017 Related Files: Primary Contact Email: atan@co.whatcom.wa.us TITLE FOR AGENDA ITEM: Ordinance establishing a project -based budget for the Unity Street Acquisition Project Fund SUMMARY STATEMENT OR LEGAL NOTICE LANGUAGE: Establishing the Unity Street Acquisition Project Fund to facilitate the purchase and sale agreement for the acquisition of the Unity Street parcels and tenant improvements. The Unity Street Acquisition Project Fund seeks an initial budget of $5,250,000 as described in Exhibit A. Please see attached. HISTORY OF LEGISLATIVE FILE Date: Acting Body: Action: Sent To: 03/05/2024 Council INTRODUCED Council Finance and Administrative Services Committee Aye: 7 Buchanan, Byrd, Donovan, Elenbaas, Galloway, Scanlon, and Stremler Nay: 0 03/19/2024 Council Finance and Administrative RECOMMENDED FOR Services Committee ADOPTION Aye: 3 Byrd, Galloway, and Donovan Nay: 0 03/19/2024 Council ADOPTED Aye: 7 Buchanan, Byrd, Donovan, Elenbaas, Galloway, Scanlon, and Stremler Nay: 0 Whatcom County Page 1 Printed on 312012024 Agenda Bill Report Continued (AB2024-179) Attachments: Proposed Ordinance, Exhibit A Whatcom County Page 2 Printed on 312012024 PROPOSED BY: Executive INTRODUCTION DATE: March 5, 2024 ORDINANCE NO. 2024-017 ORDINANCE ESTABLISHING A PROJECT BASED BUDGET FOR THE UNITY STREET ACQUISITION PROJECT FUND WHEREAS, Whatcom County needs additional office space due to expansion of the Courts to accommodate water rights adjudications and general expansion; and, WHEREAS the County has identified a suitable space in the Unity Street building and parking; and, WHEREAS, costs would include building acquisition and various tenant improvements conducted by the Facilities Department; and, WHEREAS, the Capital Facilities Reserve Fund was established by Ordinance No. 2022-086 to address ongoing need for improvements to existing facilities as well as need for new facilities; and, WHEREAS, the acquisition and improvements will be funded by a $5,250,000 transfer from the Capital Facilities Reserve Fund; and, WHEREAS, Section 6.80 of the Whatcom County Home Rule Charter allows for project -based capital budget appropriation ordinances that lapse when the project has been completed or abandoned or when no expenditure or encumbrance has been made for three (3) years. NOW, THEREFORE, BE IT ORDAINED by the Whatcom County Council that a new fund is hereby established effective immediately, titled Unity Street Acquisition Project Fund. This fund shall be used to account for the revenues and expenditures of the acquisition and improvements described above. BE IT FURTHER ORDAINED by the Whatcom County council that the Unity Street Acquisition Project Fund is approved with an initial project budget of $5,250,000 as described in Exhibit A. ADO.PTE�b`tpjs�',I,9th day of Marc q �, ATTEST:. 0 Danar- �"o Davi;g, rk` iPhe Council 1 Iq V1 APPROVED AS�TO. FORM Approved by email/C Quinn/A Tan Civil Deputy Prosecutor h , 2024. Satpal SidhLV, County Executive Approved ( ) Denied Date Signed: N 12A Exhibit A Supplemental Budget Request Administrative Services Facilities Management Isupp! 1D # 4583 Fund Cost Center Originator; Rob Ney ..------------ - - Year 2 2024 Add'I FTE ❑ Priority Name of Request: Unity Street Acquisition Project Fund X Department Head Signature (Required on Hard Copy Submission) Date Costs: Object Object Description Amount Requested 6190 Direct Billing Rate $150,000 7070 Minor Remodeling $1,000,000 7350 Buildings & Structures $4,100,000 8301 Operating Transfer In ($5,250,000) Request Total $0 la. Description of request: As the Council is aware, we have no additional office space within our existing fleet of buildings. It has been a goal of the Executive's Office and Facilities to seek out buildings that may meet the County's criteria for either rent or purchase. Because of the financial investment associated with improvements to a building, it is preferred to acquire buildings that we invest heavily in. Additionally, the overarching need to create additional area for the court system within the Courthouse is a top priority. Background: In late 2022, Whatcom County leased 104 Unity Street, a small 2,832 square foot office suite located in a larger building known as 110 Unity Street. A division of our Health Department is currently located in that suite. This building is owned by Unity -Flora Development LLC, commonly known as the Mount Baker Theatre Foundation. This building was purchased as investment property in 2019. I was contacted by the Executive Director of the Mt. Baker Theatre in May of 2023. The intent of the contact was to explore the County's desire to lease the remainder of the main floor, which was to be vacated by the current tenant Hub International. I toured the suite with the Executive Director and mentioned that we would be quite interested in the suite, but might also be interested in purchasing the entire building. Over the past several months, a tentative verbal agreement was made to purchase the site at the appraised value, pending Council approval. Acquisition Would Include: 110 Unity Street- Two -Story building, approximately 21,800 square feet, and associated off-street Parking in the rear. The Building is currently divided into three Suites: 104 Unity (Health), 110 Unity (formerly HUB International), SPIE lease in basement for warehousing. 121 Unity Street- Currently a restaurant (Best Chopsticks), and associated parking bound by alley on west, Unity Street on east, Flora Street on North, and the adjacent building to the south (not included). Thursday, February 22, 2024 Apt: Rpt Sappl RegWar Supplemental Budget Request Administrative Services Facilities Management Supp'11D # 4583 Fund Cost Center Originator: Rob Ney Appraisal Price: As requested by the current land owner, the appraisal considered two scenarios: 1) The area west of Unity Street (including the Best Chopsticks parcel), and 2) the 110 Unity Building east of Unity Street. There was also a consolidated price that included both parcels. The County was steadfast that a purchase of the building should include the larger parking area to the west of Unity (which came with Best Chopsticks), Best Chopsticks Parcel- $1,358,000 110 Unity Parcel- $3,425,000 Combined Property- $4,100,000 This ASR would include the purchase price of $4,100,000, but also an anticipated tenant improvement of $900,000, for a total $5,000,000.00. Future Tenant Improvements costs would include: Survey Creation of Offices Security Improvements to the building HVAC Improvements for building automation and efficiency Conversion of lighting to LED for energy conservation 1b. Primary customers: Future Tenants of this building. 2. Problem to be solved: The County has no inventory of office space for expansion. Facilities has been searching for additional office space within the Downtown Core to expand. Many of these offices have issues with accessibility and are quickly ruled out as options. 3a. Options / Advantages: Facilities has toured many buildings in the Downtown Core. This is one of the first that is accessible, and has very good bones. Facilities has toured this building, surveyed the mechanical equipment and feels very comfortable with the current state of this building. Facilities is aware of future HVAC improvements that will be necessary to comply with the Clean Buildings Act. To the extent possible, all improvements will work towards energy efficiency. 3b. Cost savings: Facilities will be prudent in future improvements to ensure cost effective design and future maintenance costs. 4a. Outcomes: Once funding is in place, the County will purchase the building and begin master planning the improvements. These improvements will be dependent upon defining the future department that will be housed in this space. 4b. Measures: Once the building is acquired and planning for future improvements are in place. Successful completion of the future tenant improvement project. 5a. Other Departments/Agencies: This project will have no impact to other staff other than minor inconveniences during construction. 5b. Name the person in charge of implementation and what they are responsible for. Rob Ney, Project & Operations Manager Thursday, February 22, 2024 Rpt. Rpt Suppl Regular Supplemental Budget Request Administrative Services Facilities Management Supp'! !D # 4583 1 Fund Cost Center -------------------------------- 6. Funding Source: Capital Facilities Reserve Fund 395. Originator: Rob Ney Thursday, February 22, 2024 Rpt: Rpt Suppl Regular