HomeMy WebLinkAboutAgenda - 12-09-2014 - 6hORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: December 9, 2014
Action Agenda
Item No. 6 -h
SUBJECT: Hillsborough Commons Lease Amendment for Expansion of Northern Orange
Employment and Training Center
DEPARTMENT: Social Services, PUBLIC HEARING: (Y /N) No
Asset Management Services
ATTACHMENT(S):
1) Site Illustration
2) Proposed Lease Modification
PURPOSE: To:
INFORMATION CONTACT:
Nancy Coston, 919 245 2800
Sharron Hinton, 919 245 2800
Jeff Thompson, 919 245 -2658
1
1. Approve a proposal to amend the Hillsborough Commons Lease to include the
recently vacated space adjacent to the Department of Social Services ( "DSS ") in
Hillsborough for the purpose of expanding employment and training efforts in
northern Orange County;
2. Authorize the Manager to execute the Lease Amendment upon County Attorney
approval during the Winter break; and
3. Authorize the DSS Director to budget unanticipated revenue received in this fiscal
year for any costs related to the lease and occupancy of the space.
BACKGROUND: Recently the space adjacent to the DSS at Hillsborough Commons was
vacated by the Dollar Tree and is available for lease (Note Attachment 1, "Site Illustration ").
This 10,116 square foot space is part of the building occupied by DSS and shares common
walls, loading docks and sprinkler systems.
Since DSS occupied the Hillsborough Commons space through a lease arrangement in 2010,
many changes have occurred. The caseloads for economic services such as Medicaid and
Food and Nutrition Services have increased requiring additional staff resources and the agency
has aggressively sought opportunities to address the employment and training needs of people
residing in Orange County. In the last three years, the agency has implemented the Workforce
Investment Act (WIA) youth program, the Food and Nutrition Services Employment and Training
program, and job clubs in addition to continuing the existing efforts through Work First. The
new grants have resulted in additional funding of over $400,000 to assist with training and job
placement activities. As staff recently shared with the Board, the agency has been successful
in helping approximately 400 people enter employment (including part time and seasonal).
Although many individuals receive comprehensive services at the Skills Development Center in
Chapel Hill, there have been fewer opportunities in the northern part of the County and
transportation between Hillsborough and Chapel Hill can be challenging for participants. There
currently is a small resource room at DSS that is utilized by individuals to complete resumes
and job searches and there are two classrooms, primarily used by Work First participants. As
DSS has become more involved with employers, there have been competing groups asking to
use the offices and meeting rooms in the public access area at DSS.
For example, one business has hired persons through DSS and uses space at DSS to access
families needing free or reduced cost phones. Another temporary agency has used DSS space
to meet potential employees and conducted interviews on site. The agency has also sponsored
job fairs utilizing all the space in the public area. At times these programs are competing with
other nonprofits and service agencies trying to use space at DSS to allow clients easy access to
their services. By providing additional space for employment activities, DSS can offer to partner
with more employers and assist more unemployed or underemployed individuals without
impacting other services for clients.
A small space within the DSS has been designated for youth involved in the WIA program.
However, the space is in the back of the building, creating some access barriers for the youth.
DSS proposes using some of the adjacent space to allow a larger, more accessible space for
youth to utilize when involved in agency efforts to increase their education and employment
potential.
In addition, DSS would also like to work with some of the youth and possibly other employment
participants on entrepreneurial and business activities to enhance their skills. Since the Dollar
Tree was providing a place for staff and visitors to purchase drinks and snacks, the agency
would like to develop a canteen and support this activity for the participants as a way to
understand business operations and to help them develop skills in managing small businesses.
This has been used in other communities as a successful training program and resume - building
activity for youth and others needing employment. Having such an activity located next to DSS
allows for staff support and a targeted audience for their service.
DSS has become increasingly focused on employment activities for all clients or persons
accessing the agency. By increasing wages for families, DSS hopes to increase their ability to
meet more of their own needs, thus needing fewer public services. By acquiring this space,
DSS can continue to expand this effort, seek more employment grants (such as ones to serve
Veterans) and provide services to the northern part of the County.
Due to the enhanced rate for Medicaid administrative costs of 75% and the realignment of staff
to the Medicaid program, DSS anticipates receiving over $500,000 in unanticipated revenue for
economic services overhead this year, thus freeing up funds for other uses. Although some of
this may be needed for child care, there should still be sufficient County funds to cover any
costs for this year, including one -time expenditures to prepare the space for use.
The Board may recall that the Space Study Workgroup is working diligently on the County's
space assessment and needs in preparation for a report to the Board in the spring of 2015,
coordinated with the Capital Investment Planning process. This Lease amendment reflects a
short duration, one year Lease term so that the Workgroup can fully analyze the short and long-
K
term Social Services needs and make recommendations to the Board without losing this space
opportunity and the services it may support.
FINANCIAL IMPACT: The terms of the Lease Amendment mirror the terms of the existing
Hillsborough Commons lease (see Attachment 2, "Proposed Lease Modification "). The
Additional lease cost would be $127,462, or $12.60 per square foot.
In addition to the lease cost, the County would be responsible for utilities, maintenance, real
estate taxes, and insurance. Currently DSS is able to receive at least 50% administrative
reimbursement on these costs and anticipates that the net cost to the County for the lease and
utilities for the space would be less than $70,000 annually.
For Fiscal Year 2014 -2015, this cost is anticipated to be less than $35,000, which would be
funded through already budgeted County funds and anticipated Federal reimbursements.
Other one -time costs to equip the space would also be funded through already budgeted
County funds and anticipated Federal reimbursements.
RECOMMENDATION(S): The Manager recommends that the Board:
1. Approve a proposal to amend the Hillsborough Commons Lease to include the
recently vacated space adjacent to the Department of Social Services ( "DSS ") in
Hillsborough for the purpose of expanding employment and training efforts in
northern Orange County;
2. Authorize the Manager to execute the Lease Amendment upon County Attorney
approval during the Winter break; and
3. Authorize the DSS Director to budget unanticipated revenue received in this fiscal
year for any costs related to the lease and occupancy of the space.
Attachment 1
4
,.. �.
Town of
a` Ilsboro� ugh
y MW 9 r
4 sir.
Available# �+
- Space .� � • -
� G
Department of
Social Services �, r
1�Ah�
Attachment 2
LEASE MODIFICATION
THIS MODIFICATION OF LEASE made and entered into this day of
, 20 by and between HILLSBOROUGH COMMONS, LLLP as Landlord, and
ORANGE COUNTY, NORTH CAROLINA, Tenant;
WITNESSETH:
Whereas Landlord and Tenant entered into that certain Lease Agreement dated July 25,
2008, in connection with certain premises situated and being in Orange County and the State of
North Carolina being more particularly described in said Lease Agreement; and
Whereas, Tenant's current leased space, Unit 01 has 56,328 square feet ( "Current
Space "); and
Whereas, Tenant desires to expand into the adjacent location, Unit 03 containing 10,116
square feet ( "Expansion Space ") for one (1) year; and
Whereas, Landlord and Tenant desires to amend said Lease Agreement to increase the
size of Tenant's space.
Now, therefore, for and in consideration of the sum of $1.00 and other good and valuable
consideration each to the other paid the receipt and sufficiency of which consideration is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Tenant shall expand into the Expansion Space as shown on Exhibit A,
attached hereto.
2. Tenant's Lease of Unit 03 the Expansion Space, shall commence on January
1, 2015, and expire on December 31, 2015, a term of one (1) year.
3. Tenant's Minimum Rent for the Expansion Space shall be:
$127,462 annually; $10,622 per month.
4. In addition, Tenant shall pay the Real Estate taxes for the Expansion Space.
Should the Expansion Space not be taxed as a separate parcel, Tenant shall
pay Tenant's pro rata share of the Real Estate Taxes prorated as a ratio of
the buildings included in the tax bill.
5. Tenant hereby acknowledges the Demised Premises has been previously
occupied by another Tenant and as a material consideration to this Lease,
Tenant shall accept possession of the Demised Premises, in an "as is"
condition. Landlord shall have no obligation to perform or cause the
LEASE MODIFICATION — HILLSBOROUGH COMMONS
ORANGE COUNTY
1
5
performance of construction of any improvements to the Demised Premises
prior to delivery thereof to Tenant. Tenant hereby acknowledges that
Landlord has made no representations or warranties to Tenant with respect
to the condition of the Demised Premises or the working order of any
systems or improvements therein existing as of the date of delivery
6. Notwithstanding 5. hereinabove, Landlord shall deliver the Expansion Space
with the Electrical and HVAC systems in good working order.
7. In all other respects said Lease Agreement shall remain in full force and
effect unchanged and shall not be altered in any way by this modification.
IN WITNESS WHEREOF, the parties hereto have executed this Modification of Lease
the day and year first above written.
Signed, sealed and delivered HILLSBOROUGH COMMONS LLLP
in the presence of: BY: HILLSBOROUGH SHOPPING CENTER,
INC., GENERAL PARTNER
By:
Marc L. Hagle, CEO
ORANGE COUNTY, NORTH CAROLINA
Print Name
LEASE MODIFICATION — HILLSBOROUGH COMMONS
ORANGE COUNTY
2
EXHIBIT A
LEASE MODIFICATION - HILLSBOROUGH COMMONS
ORANGE COUNTY