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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
$10/SF Tenant Improvement $12.25 / SF/ Yr
$20/SF Tenant Improvement $13.35 / SF/ Yr
$30/SF Tenant Improvement $14.45 / SF/ Yr
$40/SF Tenant Improvement $15.55 / 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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