HomeMy WebLinkAboutAgenda - 03-06-2008-6cORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: March 6,.2008
Action Agen a
Item No. r ~
SUBJECT: DSS/Health Department Space Options
DEPARTMENT: Purchasing, Budget, Social
Services and Health
PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
Comparison Charts
INFORMATION CONTACT:
Pam Jones, 919-245-2652
Donna Coffey (919) 245-2151
Nancy Coston (919) 245-2800
Dr. Rosemary Summers (919) 245-2412
PURPOSE: To consider approving an option to address long-term space needs in
Central/Northern Orange for the Department of Social Services (DSS) and Health Department.
BACKGROUND: The various iterations of the Space Needs Study have identified
departmental needs through 2010. Many of these needs are being met- through on-going
projects such as the Gateway Center, the County Campus projects and others that will be
completed within the year. However, a solution for addressing Human Services departmental
space needs has not previously been forthcoming. While space constraints particularly in
Health and DSS have been problematic in the past few years, they reached a critical level with
the issuance of a violation from the State regarding space allocations for DSS. The Health
Department as well faced challenges in their upcoming accreditation because of insufficient
space allocated for departmental programming.
At the behest of the Board of Commissioners, both groups were asked to confirm their intended
service delivery method and the space needed to support their programs. DSS indicated a
desire to maintain a large primary facility of approximately 50,000 square feet with essential
services provided to clients at a secondary site, approximately 5,000 square feet, which would
be located in the opposite end of the County. They noted that service delivery at the satellite
center would be transparent to the clients and would offer essential services, although via a
lower concentration of staff than at the primary location. The Social Services Director noted that
this is not dissimilar to their current operation in that some services are located only in
Hillsborough and other services are located only in Chapel Hill, with both locations offering
emergency services.
The Board of Health and the Health Director indicated a desire to continue to provide two
functionally equal service locations in the southern and the central part of the County, including.
Dental services.
At this point, four options to provide the space requested by DSS and Health are under
discussion. Some of the options have been discussed by the Board since October 2007, while
others were added as a result of discussions during recent Capital Investment Plan work
sessions. The Health and DSS Boards discussed specifically Option A and Option B, although
information regarding Option C was provided to the Health Board by Commissioner Gordon and
by Pam Jones to the DSS Board. Commissioner Gordon also provided written and oral
information regarding these options during the Capital Investments Plan Public Hearing held on
February 5, 2008.
The attached spreadsheets will provide additional information for each. of the options, which are
summarized below as follows:
Option A:
• Lease/purchase the space previously occupied by Wal-Mart at the Hillsborough
Commons shopping center for use by DSS immediately;
• No later than February 2012 the County would purchase the entire shopping center
for relocation of human services departments currently located at the Whiffed Building in
Hillsborough.
• Note the $35.50 /S.F. upfit costs used as the basis of evaluation are consistent with those
recently experienced with the Gateway Center upfit. Note that upfit costs do not include
furnishings.
• If the County commits to a lease purchase of the shopping center, the owner would allow
the construction of the proposed sustainable design elements, such as parking lot
improvements and the addition of natural daylighting to the building. These amounts are
cited separately in the cost analysis and are not included in the $35.50/S.F. upfit costs.
• The County will upfit the space for use by the Health Department after 2012 when
shopping center is purchased. A separate line item cost is included for that work.
• Option A also adds approximately 15,000 square feet at the SHSC to meet the needs
of the Health Department, including the dental clinic and other departments that currently
occupy that facility. The Board. may recall the Space Needs Study suggested an addition
to SHSC of approximately 25,000 s.f. The purchase of the shopping center will allow the
addition to be reduced while still meeting the long-term needs of the departments.
Option B:
• Construct a new facility of approximately 50,000 square feet at the existing Southern
Human Services Center (SHSC) site in Chapel Hill for DSS; and
• Remodel the space vacated by DSS at SHSC for use by Health Department
• Renovate approximately 30,000 square feet of the 59,000 square feet in Whiffed
Building for Health Department operations;
Option C: (added at January 16, 2008 worksession ):
• Add approximately 25,000 square feet to existing SHSC building for use in
approximately 3 ~/2 to 4 years;
• Construct 50,000 square foot facility for DSS around 2017.
Although not specifically included in option C as presented at the work session, the
County would also need to renovate approximately 30,000 square feet of the 59,000
square feet in Whiffed Building for Health Department operations in order to provide
adequate program space for the Department.
3
Option D (added at February 7, 2008 worksession):
• Lease 56,000 square feet at Hillsborough Commons for a period of ten years.
Current lease costs are based on a lease period of 10 years to allow amortization of
some upfit costs by the Landlord. While a lease period of less than 10 years may be
possible it has not been negotiated as such and the lease rate would be increased to
reflect the shorter lease period.
o As a condition of the lease, the Landlord would likely require the County to return
the building to retail status at expiration. Creating the natural light in the facility
would entail structural work (windows, for example), which would be expensive to
replace to the original condition.
• Renovate approximately 30,000 square feet of the 59,000 square feet in Whiffed
Building for Health Department operations;
• Add approximately 25,000 square feet at SHSC in order to allow the following
allocation of space:
o DSS retains existing space at SHSC (10,000 sf)
o SHSC addition for Health (about 25,000 sf)
o Includes 10,000 S.F. still retained by DSS plus the 8,000 space deficit citied by
Health making a total of 18,000 additional S. F. for Health.
• No space for DSS after the 10-year lease period (2018) is specified in this option.
Presumably the lease would be renewed or new space would be constructed. If the
Board opted to renew the lease, the Landlord has previously quoted a cost of $729,456
($364,728 w/State reimbursement) per year for years 11-15. If the. Board opted to
construct a new 50,000 square foot facility to replace the leased premises, the cost
estimates would be commensurate with the 2017 development cost cited in Option C.
Conclusion
Of the options identified, Option A appears to provide the best overall solution to the space
needs for the long term. It will provide approximately 108,000 square feet for human services
program space and an additional 10 acres of land in a good location for human services
delivery. DSS and Health Department needs in Central/Northern Orange, as well that of other
human services departments can be met for the long-term at this facility. Option A will most
quickly meet the needs of DSS, who continue to violate State mandated facility requirements.
Further, the Board has previously stated the strong desire to avoid leasing property for an
extended period of time where possible. Option A requires the County to lease property for the
shortest period of time, while still providing adequate program space for its departments.
The recommendation further requests approval to move forward with an architect (not yet
selected) who can, in collaboration with DSS staff, develop a program and subsequent ,
construction documents to deliver the space as expediently as possible. Staff will analyze the
merits of using the Construction-Manager-at-Risk method of contracting to deliver the space and
provide the appropriate approval requests to the Board as quickly as practicable. As
demonstrated by the attached letters, both the DSS and Health Boards are in support of
Hillsborough Commons as service locations for their respective departments.
Asa #inal.observation, Option A will allow the long term space needs in southern Orange to be
met at the SHSC through a smaller addition to the building (15,000 s.f. vs. 25,000 s.f. as
proposed in the Space Needs Study).
4
Whiffed Center
Although there has been no serious discussion about the disposition of the Whitted Building,
should the County choose to relocate human services to Hillsborough Commons, several
alternatives have been mentioned in passing, any of which may have merit either singularly or in
a variety of combinations:
• Administrative offices for the Recreation and Parks Department;
• Location for non-profit agencies to lease space at an affordable rate;
• Performing Arts Center;
• Heritage Center;
• Condominium/lofts for affordable housing;
• Arts School;
• Studio space for artists in the Hillsborough arts community;
• Office space for the Orange County Arts Commission, currently located at the Court
Street Annex;
• Administrative offices .for other governmental bodies, including, but not limited to the
Orange County Board of Education and/or the Town of Hillsborough.
At such time the Board chooses to comment on its collective preference(s), staff will pursue a
comprehensive analysis for Board consideration at a later date.
FINANCIAL- IMPACT: The attached spreadsheets provide additional information, including the
potential fiscal impact of each of the options outlined above. The information is organized as
follows:
• Section 1: Total anticipated capital costs associated with each option;
• Section 2: Summary of the space needs that will be met through the execution of each
option;
® Section 3: Summary of square footage that each option would yield; and
• Section 4: Detail of capital and construction costs for each option.
Costs contained in options will be met through General Fund appropriations, the Capital
Investment Plan, alternative financing or a combination of these. Based on the option selected
by the Board, an appropriate funding plan will be presented in tandem with the appropriate
follow up document approval. For example, should the Board exercise an option that includes a
lease then a funding plan would be included when the lease comes back to the Board for
approval.. Any lease/purchase arrangement would be conditioned upon Local Government
Commission (UGC) approval, which is required for capital leases.
RECOMMENDATION(S): The Manager recommends that the Board:
1. Authorize the staff and County Attorney to negotiate the most favorable lease/purchase
arrangement possible for the Hillsborough Commons shopping center and as quickly as
practicable present the lease for Board approval, with an appropriate funding plan and
contingent upon LGC approval; and
2. Exempt this project from the qualification-based selection process as allowed by NCGS
§ 143-64.32 and authorize the Manager to retain professional services as may be
needed to develop a program and construction drawings for the leased premises.
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