Extra space would raise maximum purchase price to $26 million, staff says
On Jan. 26, the Sarasota County Commission took the final step in authorizing a new District 12 Medical Examiner’s Office, to be located at 4480 Fruitville Road.
As Dr. Russell Vega, the medical examiner for Sarasota, Manatee and DeSoto counties, had requested, it will be close to Interstate 75, Carolyn Eastwood, director of the county’s Capital Projects Department, noted in her presentation.
The site will be just east of the McIntosh Road intersection with Fruitville Road.
Formally, on Jan. 26, the commissioners unanimously confirmed their Jan. 12 adoption of a resolution that agreed to a 30-year lease of the facility — with an option to purchase it after three years — from 4480 Fruitville LLC, whose principal is John LaCivita, executive vice president of Willis A. Smith Construction in Sarasota. The motion noted the inclusion of an addendum to the lease that the commission initially approved on Jan. 12.
At the request of commissioners earlier this month, county staff worked with the members of the limited liability company to add into the lease provisions for a “cold dark shell,” as a document in the Jan. 12 agenda packet put it, which would be constructed atop the office portion of the new building. That shell would comprise 17,483 square feet.
Before adding in the expense of the unfinished second floor, Eastwood noted on Jan. 26, staff had expected the total for leasing the new building for three years would run from $5 million to $5.6 million.
After staff reviewed facets of the Jan. 12 discussions with 4480 Fruitville LLC, she added, the firm agreed that creating the 17,483 square feet of unfinished space atop the administrative portion of the new building would raise the rent by $279,728 per year. Thus, the total annual rent is expected to run from $1.7 million to $1.9 million in the first year, depending on the cost of what Eastwood termed “tenant improvements.” For example, she has pointed out that the Medical Examiner’s Office will need specialty equipment that is expected to run between $1 million and $4.4 million. “We don’t know the exact cost of [that],” she emphasized on Jan. 26.
Further, she said, “We do plan on buying the actual office furniture,” which is expected to cost about $800,000.
The lease also calls for an annual rent escalator of 3% or the Consumer Price Index, whichever is higher.
Moreover, the addition of the upper floor would increase the purchase price by $2.5 million, Eastwood noted, for a maximum of $26 million. The anticipated range for annual debt service payments to fund the purchase would increase by a range of $1.3 million to $1.5 million, she added, depending on the final expense of furnishing the new building.
The Sarasota County Property Appraiser’s Office valued the land at 4480 Fruitville Road at $669,600 in 2020. 4480 Fruitville LLC bought the parcel in March 2019 for $675,000, Property Appraiser Office records show.
Keeping the options open
In discussions late last year, Commissioner Michael Moran brought up the idea of the second floor, talking of the potential for the county to rent out that space to a compatible tenant in the future — a nursing school or a forensics lab, for examples.
On Jan. 12, commissioners also talked of the potential need for more storage space for county departments.
Nonetheless, the board members emphasized that they did not want to approve an amended lease that would entail significantly higher expenses. They voiced concern, especially, about the potential cost of constructing far more parking spaces to accommodate a future use of that second floor.
On Jan. 26, Eastwood showed the commissioners a slide that listed all the sections of the county’s Unified Development Code (UDC) — which contains the land-use and zoning regulations — that pertain to parking requirements. “The code allows for an alternative parking plan,” she noted, “if the applicant feels the [parking] ratios are too high or too low” for a particular project. Representatives of 4480 Fruitville LLC said they would undertake that alternate parking plan process, Eastwood added.
After the Capital Projects staff learns the results of that engagement between the firm and county staff, she continued, staff would report back to the commissioners. “We’ll go from there.”
Eastwood noted that the expectation that few parking spaces would be needed for the morgue, as visitors would be unlikely. The Development Concept Plan she showed the commissioners on Jan. 12 included 65 spaces altogether on the site, she added. The lease addendum, she continued, says that “as long as we can keep the parking … at 65 or less,” 4480 Fruitville would not need to raise the annual rent or purchase price above the figures she was showing the board members that day.
Referencing Eastwood’s remarks about the parking aspect of the construction, Commissioner Ron Cutsinger characterized the firm’s upcoming permitting discussions with staff as an “approach [that] will be based on common sense.”
Chair Alan Maio, who was a principal of the Kimley-Horn consulting firm prior to his election to the board, stressed that, under the rules of the Sarasota County Charter, he cannot provide direction to staff other than County Administrator Jonathan Lewis and County Attorney Frederick “Rick” Elbrecht. However, Maio continued, “If I was staff, I would sure listen to all the conversations the policymakers had, and I would expect that whatever consultant gets hired can create an alternative parking plan. I know I could do one right now that would probably pass muster.”
With a chuckle, Lewis responded that Maio could give that advice to the applicant’s staff.
The addendum to the lease the board members approved on Jan. 26 also included a clause that would require the county to pay $2.5 million to 4480 Fruitville LLC to finish the second floor so the building could be leased to another entity if the county decided to withdraw from the lease, Eastwood explained.
“At first look, that looks alarming,” Commissioner Moran told Eastwood. However, he continued, “If we bail out on that lease, then they have to make [the second floor] usable space, so they are making this aggressive in the contract. I don’t blame ’em.”
“I don’t have a problem with it,” Moran added of that section of the addendum.
“We think it’s a very unlikely event,” Eastwood responded, referring to the potential for the county to terminate the lease for the building.
Looking ahead
As she has explained in the past, 4480 Fruitville LLC is willing to sell the property and new structure to the county at the end of a three-year lease period. That time frame, Eastwood has noted, is a factor related to the arrangements the firm has made for financing the building.
The terms of the lease call for the new Medical Examiner’s Office to be completed 24 months after the execution of the lease, subject to 4480 Fruitville LLC’s working through the county permitting process. Therefore, Eastwood noted on Jan. 26, staff anticipates the Medical Examiner’s Office to be ready for occupancy in January 2023.
The county also will be responsible for paying property taxes and insurance as a tenant, Eastwood reminded the commissioners. However, Medical Examiner Vega expects to save $270,000 a year in operating expenses by having his own facility instead of having to rent space in other locations, Eastwood pointed out.
Commissioner Moran ended up making the motion to confirm adoption of the lease, with the Jan. 26 addendum, and Chair Maio seconded it.
Maio pointed out that Vega had been asking for a new facility for years. Early on during her presentation that day, Eastwood made it clear that achieving that has been a top priority for the commission.