norco dhs consolidated facility 1-09-13 (1)

7/30/2019 NorCo DHS Consolidated Facility 1-09-13 (1)

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DECEMBER 2012


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WOLF BUILDING (Circa 1893)

45 North 2nd Street, City of Easton

Purchased 1986 for $912,000

Houses Area Agency on Aging

Children and Youth

HS Information and Referral/Emergency Services

Veterans Affairs 52,171 Square Feet

Estimated Future Capital Cost $3.3M

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BECHTEL BUILDING (Circa 1962)

520 E. Broad Street, City of Bethlehem

Purchased 1993 for $763,000

Houses

Developmental Program (MR)

Drug and Alcohol

Early Intervention

Health Choices

Mental Health

Weights and Measures

Juvenile Probation Satellite Office

27,882 Square Feet

Estimated Future Capital Cost $1M 3


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Bechtel Building 70

Wolf Building 173

Courthouse 3

TOTAL 246

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CONSOLIDATE NORTHAMPTON

COUNTYS HUMAN SERVICES, AND

OTHER COUNTY OFFICES, INTO A

COST EFFECTIVE,

STATE OF THE ART, CENTRALIZEDFACILITY

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ONE STOP SHOPPING FOR CONVENIENCE OFCLIENTS

MORE EFFICIENT LAYOUT NEW FACILITY OFFERS LOWER OPERATIONAL COSTS

PROVIDES CENTRAL LOCATION FOR EMPLOYEES &CLIENTS NEGATES EXPENSIVE CAPITAL REPAIRS TO WOLF &

BECHTEL BUILDINGS PLACES WOLF & BECHTEL BUILDINGS BACK ON TAX

ROLLS PROVIDES ADDITIONAL SECURITY FOR DHS

EMPLOYEES & CLIENTS PROVIDES AN OPPORTUNITY TO HOUSE ADDITIONAL

COUNTY OFFICES INCLUDING A DISTRICTMAGISTRATE

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Steve DeSalva, Director Public Works

Tom Dietrich, County Council

Doran Hamann, Chief Fiscal Officer

Tom Harp, County Administrator

Ken Kraft, County Council

Ross Marcus, Director Human Services

Ken Mohr, Mohr Management Resources

John Stoffa, County Executive

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Access - Easy Access to Major Highways Facility - Modern, Energy Efficient, easy to maintain Mech. Sys. Human Services - Improve Operational Productivity / Efficiency Parking - Clients / Visitors Parking Onsite Site - One Human Services Site Space Future / Growth Cost - Avoided Capital (e.g. Wolf & Bechtel Building repairs, etc.) Cost - Lease / Purchase Cost - Operational (current & future)

Human Services - Improve Client Service Human Services - Optimal Layout / Adjacencies / Situation Project Timeframe - 1 year Sale Wolf & Bechtel Buildings Security Employees

Access - Public Transportation (e.g. Bus route, etc.) 8


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SOLICIT PROPOSALS LVEDC BROKER / DEVELOPER PROSPECT ALERT SEARCH 34 COMMERCIAL REALTOR/BROKER SITES

RESULTS

26 PROPERTIES IDENTIFIED, 10 ELIMINATED (OUT OFCOUNTY), 2 WITHDRAWN PROJECT TEAM RANKED 14 PROPERTIES SHORTLISTING

3 (ONE EXISTING BUILDING & TWO BUILD TO SUIT)

SHORT LIST DRILL DOWN SOLICITED DETAILED APPLES TO APPLES LEASE TERMS

ON SHORT LISTED PROPERTIES CONDUCTED COST & TERMS COMPARISON ANALYSIS TOURED ONE (1) EXISTING BUILDING INTERVIEWED SHORT LISTED DEVELOPERS

RANKED SHORT LISTED PROSPECTS 9


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2801 EMRICK BOULEVARDBETHLEHEM TOWNSHIP

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2801 EMRICK BOULEVARDBETHLEHEM TOWNSHIP

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LOWEST COST ALTERNATIVE

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SHORT LISTED COST COMPARISON

#16 - 2800 Baglyos Circle, Bethlehem TownshipTotal SF =66,800 Year 1 Year 15 Average (15 Years)

Annual Increase: 3.0%

Rent Cost $ 901,800 $ 1,364,053

Rent Cost / SF / Yr $ 13.50 $ 20.42 $ 16.74

#21 - 2801 Emrick Blvd., Bethlehem TownshipTotal SF =66,375 Year 1 Year 15 Average (15 Years)Annual Increase: 2.5%

Rent Cost $ 773,269 $ 1,092,609

Rent Cost / SF / Yr $ 11.65 $ 16.46 $ 13.93

#23 - 1455 Valley Center Parkway, Hanover TownshipTotal SF =48,418 Year 1 Year 15 Average (15 Years)

Annual Increase:$0.55 everyother year

Rent Cost $ 702,061 $ 888,470

Rent Cost / SF / Yr $ 14.50 $ 18.35 $ 16.30

#24 - 3370 Highpoint Blvd., Hanover TownshipTotal SF =60,000 Year 1 Year 15 Average (15 Years)

Annual Increase:$0.55 everyother year

Rent Cost $ 14.50 $ 870,000 $ 1,101,000

Rent Cost / SF / Yr $ 14.50 $ 18.35 $ 16.30

NOTE:

All $/SF/Yr include Tenant Improvements at $20/SF, 15 Year Term, Non Prevailing Wage


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LOCATIONDHS CLIENTS

33.1% BETHLEHEM ZIP CODES

30.3% EASTON ZIP CODES

DHS EMPLOYEES29.1% BETHLEHEM ZIP CODES17.7% EASTON ZIP CODES

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ACCESSAUTO BANGOR

Market & 1st StsBETHLEHEM

Main & W.Broad Sts

EASTON3rd &

NorthamptonSts

HELLERTOWNMain & Water Sts

2801 Emrick Blvd.

Bethlehem Twp. 16.5 Mi / 24 Min 6.4 Mi / 15 Min 5.3 Mi / 13 Min 8.9 Mi / 14 Min

Wolf BuildingN. 2nd & ChurchSts., Easton 14.0 Mi / 25 Min 16.6 Mi / 25 Min 0.6 Mi / 3 Min 12.2 Mi / 20 Min

Bechtel Building520 E. Broad St.,

Bethlehem 22.4 Mi / 33 Min 0.9 Mi / 4 Min 10.2 Mi / 22 Min 4.1 Mi / 10 Min

Source - Google Earth

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PUBLIC TRANSPORTATION

LANTA Bus Routes101 & 220 Service Emrick Blvd.


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Landlord: Polaris Properties, Inc.Term:

15 Years + 2 - 5 year options to renew + 1 4 year 10 month option to renew

Option to Purchase At End of Every 5 YearsFirst 15 years - Purchase at 7.5% Capitalization RateSecond 14 years 10 months - Purchase at straight line depreciationfrom Cap Rate in year 15 to $1.00 at end of lease

Square Feet 66,375 Gross SF

Stories 3Acreage 5.36Parking Spaces 256Delivery Date 4th Quarter 2013

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Lease rates 15 years (final rent based on actualtenant improvements & NorCo contribution to tenant improvements)

$0/SF Tenant Improvement $11.15 / SF/ Yr





$50/SF Tenant Improvement $16.65 / SF/ Yr $62.50/SF Tenant Improvement $18.00 / SF/ Yr

Lease Rate Escalation 2.5%/Yr

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Triple Net NorCo pays:Taxes, Utilities & Insurance

Tenant Improvements:

Approved by NorCo, completed by Polaris

Construction Utilizing Prevailing Wage

Tenant Improvements: Partially paid for byNorCo from Wolf & Bechtel sale proceeds

Operating Expenses by NorCo or Landlord asagreed on a year to year basis:Repairs & Maintenance

Lawn Care & Snow Removal

Custodial & Trash Removal 18


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REVENUE $2,800,000Sale of Wolf & Bechtel Buildings

EXPENDITURES $2,800,000Tenant Improvements (Portion)

Furniture, Fixtures & Equipment

Professional Fees

Contingency

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DHS 2012 ANNUAL BUDGET OF $130M (excluding Gracedale)

DHS ESTIMATED ADDITIONAL ANNUAL COST

$160K (0.12%) - $300K (0.23%) OF EXISTINGANNUAL BUDGET (excluding Gracedale)

ADDITIONAL COST SHARED

PA DHS REVENUE

NORTHAMPTON COUNTY(This approach creates an incentive for DHS and DFA to seek cost savings)

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Bechtel & Wolf Capital Repairs Savings (10 Years)$4.3M @ 3.5% for 10 years = $508K / Year

Utilities Savings = $32K / Year +/-

Northampton County Tax Revenue = $42K / Year +/-Bechtel & Wolf Buildings2801 Emrick Blvd. Building

Lease Excess Space Revenue = $108K / Year +/- Relocate DJ Office 03-02-03Sub Lease approximately 5,000 SF

BASED ON EARLY BUDGET ASSUMPTIONS FOR ILLUSTRATIVE PURPOSES ONLY!

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Improved Employee Performance & Morale

Improved Client Service and Convenience

Space Available for other Value Added County Services

Space Available for Future Growth

256 Safe, Convenient Parking Spaces

Insurance Exposure / Savings

Eliminates County Construction and possibly Maintenance &Repair

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December 2012 - Approval & ImplementationCounty Council review & act on lease agreement

County Executive & Developer execute lease agreement

Establish space planning committee to design layout

Plan project budget & financing

December 2012 November 2013 Design, Build, & Move

Complete Building Design

Construct BuildingOrder & Install Furniture, Fixtures & Equipment

Move In 4th Quarter 2013

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QUESTIONS

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norco dhs consolidated facility 1-09-13 (1)

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