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Authorize the Town Manager to Apply for Local Government Commission (LGC) Approval and Execute a Lease at 7300 Millhouse Road for Town Offices including the Town’s Police Department
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Staff: |
Department: |
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Chris Blue, Town Manager |
Manager’s Office |
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Mary Jane Nirdlinger, Deputy Town Manager |
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Amy Oland, Director |
Business Management |
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Celisa Lehew, Chief |
Police Department |
Overview: Tonight we are asking Council to consider approval of a resolution (1) making findings of fact in support of the application to the Local Government Commission (LGC) for approval of the lease; and (2) authorizing the Town Manager to take the steps necessary to execute the lease.
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Recommendation(s): |
That the Council make findings of fact in support of the application to the LGC for approval of the lease and authorize the Town Manager to take the steps necessary to execute the lease.
Background: On September 13, 2023 <https://chapelhill.legistar.com/LegislationDetail.aspx?ID=6345172&GUID=BD2EFAC4-3B75-455A-94A8-443305F86259>, The Town Council resolved that finding a suitable location for police operations was a critical need for the Town and that the current facility at 828 Martin Luther King Jr. Boulevard no longer meets the needs of the Department. The Council also identified the need to proceed with efforts to remediate the 828 Martin Luther King Jr. site.
Town staff has worked diligently to find a suitable location for the Police Department and has identified this location to serve as the new police headquarters, an emergency operations center, and IT department-critical co-located operations. The address for the proposed new headquarters is 7300 Millhouse Road, Chapel Hill, NC 27516. The Town plans to lease no more than 60,000 square feet for approximately 15 years. This will allow adequate time to identify a location and funding plan for a permanent location for the Town’s operations and sufficient time to proceed with a remediation plan and funding for the existing 828 Martin Luther King Jr. site.
State law requires that the Town’s lease be approved by the North Carolina Local Government Commission (LGC), a division of the North Carolina State Treasurer’s office. Under the LGC’s guidelines, this governing body must make certain findings of fact to support the Town’s application for the LGC’s approval of the Town’s arrangements.
Fiscal Impact/Resources: The approximate rent would be $1,370,000 in year 1, and subject to escalators, management fees, and tenant assessments as customary for similar leases.
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Attachments: |
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• Resolution |
A RESOLUTION MAKING FINDINGS OF FACT IN SUPPORT OF AND AUTHORIZING THE TOWN MANAGER TO APPLY FOR LGC APPROVAL AND EXECUTE A LEASE AT 7300 MILLHOUSE ROAD FOR TOWN OFFICES (2024-06-17/R-3)
WHEREAS, Town staff has worked diligently to find a suitable location for the Police Department and has identified space at 7300 Millhouse Road to serve as the new police headquarters, an emergency operations center, and IT department-critical co-located operations; and
WHEREAS, the proposed project is necessary and appropriate for the Town under all the circumstances. Construction of a new facility to serve the same purpose would be more costly, take several years to build, while serving the same purpose; and
WHEREAS, the estimated sums to fall due under the proposed contract are adequate and not excessive for the proposed purpose. The Town will closely review proposed rates against market rates with guidance from the LGC. All amounts paid will reflect either approved contracts, previous actual expenditures, or professional estimates; and
WHEREAS, as confirmed by the Town’s Finance Officer, (i) the Town’s debt management procedures and policies are sound and in compliance with law, and (ii) the Town is not in default under any of its debt service obligations; and
WHEREAS, given the Town’s need for the project, the Council believes that the effect on the Town’s budget and the tax rate from the lease will be reasonable under all the circumstances. Town staff expects no actual increase in taxes to result from this transaction. The Council will work to minimize the tax rate impact in a manner consistent with moving forward with the project and addressing the full range of Town needs; and
WHEREAS, the Town Attorney is of the opinion that the proposed project is authorized by law and is a purpose for which public funds of the Town may be expended pursuant to the Constitution and laws of North Carolina.
NOW, THEREFORE,
1. The Chapel Hill Town Council RESOLVES, as follows:
a. The Town makes a preliminary determination to lease approximately 60,000 square feet at 7300 Millhouse Road, Chapel Hill, NC 27514 for use as the new police headquarters, an emergency operations center, and IT department.
b. The Council authorizes the Mayor and the Town Manager, or either of them, to execute and deliver a final form lease. The execution and delivery of the final form lease by an authorized Town officer will be conclusive evidence of that officer’s approval of any changes.
c. The lease in final form, however, must be consistent with the plan and parameters described in this resolution. In particular, the lease must be for not more than 60,000 square feet, for a term of not more than 15 years from the rent commencement date, and call for a first-year rent of not more than $1,370,000, subject to escalators, management fees, and tenant assessments as customary for similar leases.
2. The Council makes the following findings of fact in support of the Town’s application to the LGC:
(a) The proposed project is necessary and appropriate for the Town under all the circumstances. Construction of a new facility to serve the same purpose would be more costly, take several years to build, while serving the same purpose.
(b) The estimated sums to fall due under the proposed contract are adequate and not excessive for the proposed purpose. The Town will closely review proposed rates against market rates with guidance from the LGC. All amounts paid will reflect either approved contracts, previous actual expenditures, or professional estimates.
(c) As confirmed by the Town’s Finance Officer, (i) the Town’s debt management procedures and policies are sound and in compliance with law, and (ii) the Town is not in default under any of its debt service obligations.
(d) Given the Town’s need for the project, the Council believes that the effect on the Town’s budget and the tax rate from the lease will be reasonable under all the circumstances. Town staff expects no actual increase in taxes to result from this transaction. The Council will work to minimize the tax rate impact in a manner consistent with moving forward with the project and addressing the full range of Town needs.
(e) The Town Attorney is of the opinion that the proposed project is authorized by law and is a purpose for which public funds of the Town may be expended pursuant to the Constitution and laws of North Carolina.
3. Additionally, the Council resolves as follows:
(a) The Council directs the Town Manager and the Finance Officer to take all appropriate steps toward the completion of the agreement, including completing an application to the LGC for its approval of the proposed lease. The Council ratifies all prior actions of Town representatives in this regard.
(b) This resolution takes effect immediately.
This the 17th day of June, 2024.
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The Agenda will reflect the text below and/or the motion text will be used during the meeting. |
presenter
By adopting the resolution, the Council makes findings of fact in support of the application to the LCG for approval of the lease and authorizes the Town Manager to take the steps necessary to execute the lease.