Thursday, October 6, 2011

El Paso County gains more space

Posted By on Thu, Oct 6, 2011 at 5:14 PM

El Paso County Commissioners voted Thursday to lease a building at 4425-55 Arrowswest Drive to house county records that now are stored in multiple locations and provide space for CASA and Goodwill Industries, both of which contract with the county to provide social services.

Those agencies will pay rent to the county, and if they don't get future county contracts, they'll have to move out to make way for the new vendors.

The county can buy the building for $2.1 million if it acts within a certain time frame that begins a year from now. Otherwise, its cost for rent over the 25-year term would total $4.7 million.

Almost everyone hailed the agreement as a great deal for the county and its "partners," including the Space Foundation.

Although the county isn't putting any money directly into the Space Foundation, just by occupying the empty space in the building will benefit the foundation.

The Space Foundation was given the building by an outfit called Grapevine LLC formed by Scott Bryan of Bryan Construction last year. Participants in Grapevine include the Ackerman Foundation, El Pomar Foundation, the state Office of Economic Development and the Colorado Springs Economic Development Corp., of which Bryan served as board chair not long ago.

Commissioner Sallie Clark explained the advantage of the county's leasing/purchasing decision in an e-mail:

The location for our leased office space which will house CASA, Goodwill and County facilities in one of the Arrowswest buildings will provide an indirect benefit to the Space Foundation and the complex as it helps to fill the currently vacant building near the Space Foundation. I see it as a win-win opportunity for agencies the County currently works with through our contractual DHS arrangements, especially considering the advantageous proximity to our Citizens Service Center. This is beneficial for our related agencies and operational logistics.

Glenn: Not ready to buy more property.
  • Glenn: Not ready to buy more property.

Commissioner Darryl Glenn was the only commissioner expressing opposition to the lease/purchase, saying, "The dust hasn't really settled on the Citizens Service Center," a massive building the city acquired last year for about $22 million to house a number of county departments.

Glenn said he's not convinced there isn't space to be carved out of the Service Center and cited "concerns about proper usage of space."

"There's an intent to clearly acquire that facility, and I'm not ready to make that commitment," he said. "I'm not convinced we need to bring on more capital assets." He also noted one entity was missing from the Space Foundation "partnership," namely, the city.

Commission Chair Amy Lathen responded saying she has toured the Service Center repeatedly and reviewed the blueprints. She said commissioners reduced the amount of space requested by several departments, including Public Health and the Workforce Center, and that it was up to the elected officials — assessor, clerk and recorder and treasurer — to finish their space "as they chose."

She countered Glenn's comment about the city by saying commissioners had attempted last year to locate commissioner offices at City Hall and were "summarily rejected." Likewise, the county's idea to put commissioner offices at the Regional Building Department facility on International Circle also was rejected by the city.

Glenn noted the county might have dealt with city staff, but not city elected officials, because as a City Councilman during that time, he was never consulted about it.

Lathen quickly said, "That ship has sailed" and added that the county had consulted elected officials.

Glenn replied that he was never asked, and most certainly should have been, having been a member of the shared services task force at that time.

In any event, the county now will add the 41,246-square-foot building on Arrowswest to its portfolio, and will soon apply for a tax exemption from the portion of the building occupied by the county and the two nonprofits. Besides rent, the county will pay $2,500 per month in condo fees, but County Administrator Jeff Greene says in an interview that the county might end up gaining a little extra money by having its facilities maintenance people take care of the entire Arrowswest building, not just the county portion. The condo board will make that decision, he says.

4425-55 Arrowswest Drive

County officials say the building is perfect for records storage. County information officer Dave Rose said recently in an e-mail to us, "I walked through the space when this was first discussed and it does have secure climate controlled storage space with a lot of storage racks and bins etc already in place."

Many of the county's records dating to the 19th century are housed at what used to be the county Health Department building on South Union Boulevard. That building will be sold now that Public Health has moved to the Citizens Service Center on Garden of the Gods Road.

The county's contract on the Arrowswest property includes a clause allowing it to convert the lease to a lease-to-purchase deal, if the county pays $30,000 when it executes the existing lease. Here are the terms of that lease to purchase arrangement as spelled out in the lease:

If such option is exercised by Tenant, the Basic Rent shall continue to be paid in
monthly installments, but shall be divided into a principal component (the “Basic Rent Principal
Component”) and an interest component (the “Basic Rent Interest Component”) based on an
interest rate of 7.0% per annum based on a 360 day year of twelve 30-day months, a principal amount of $2,165,000.00 on October 1, 2012 and a payment of Basic Rent totaling $15,742.00 per month beginning on October 1, 2012 and ending on September 1, 2036. The principal amount on the date that the option is exercised shall be $2,165,000.00, less any payments made
by Tenant between October 1, 2012 and the date of the exercise of such option that would have
constituted the Basic Rent Principal Component if such option had been exercised on October 1,
2012.

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