Staff to investigate potential of constructing second story on part of facility, with commissioners interested in potential for leasing that space to a nursing school or other compatible tenant
Because of the legal necessity for local government bodies to follow certain procedures in contracting for services, the owners of the property located at 4480 Fruitville Road in Sarasota most likely would be able to construct a new facility for the District 12 Medical Examiner’s Office a year faster than Sarasota County could.
That was the news that Carolyn Eastwood, director of the county’s Capital Projects Department, delivered to the County Commission on Dec. 9.
The ownership team anticipates it could have the building completed within 24 months of the execution of the lease, Eastwood told the board members.
As Commissioner Alan Maio characterized it, even if the commissioners approved the plan for construction by the ownership team, “Dr. [Russell] Vega [the medical examiner] won’t see his building until spring of 2023.” Yet, Maio continued, “I don’t ever want to see our county, which is the gem on this coast, getting into a situation where we’re [featured] in a newspaper, moving in refrigerated tractor trailers to store bodies,” as some communities have done during the novel coronavirus pandemic. “We need this,” he added of the new facility. “Dr. Vega has been extremely patient. … I think us building [the facility] is a good 12 to 18 months longer.”
“We really, literally, escaped a bullet and a crisis” during the pandemic, Commissioner Nancy Detert concurred with Maio. “I think we’re doing this just in the nick of time …”
As a result of their desire for speed, the board members voted unanimously to authorize staff to continue negotiating a contract with the ownership group for a three-year lease of the new structure and then the purchase of it, plus the underlying land.
However, at the direction of Chair Michael Moran — with support voiced by Commissioner Christian Ziegler and then Commissioner Maio — staff will consult with the ownership group, 4480 Fruitville LLC — to determine whether a second story could be added to the administrative portion of the planned building. (The registered agent for 4480 Fruitville LLC is John LaCivita, executive vice president of Willis A. Smith Construction of Sarasota, which has offices on Lakewood Ranch Boulevard, the Florida Division of Corporations says.)
An upper level likely would comprise about 20,000 square feet, Moran noted. Thus, county staff potentially could rent out the space to a nursing school, for example, or a nationally accredited forensics laboratory, he pointed out. Then, the county eventually could offset some of its expense for the purchase of the site.
He would hate to be looking back in five or 10 years, Moran said, and wishing that the board had agreed to pursue such an opportunity; yet, it had opted not to do so.
Eastwood warned that the total of the purchase price and furnishings already is “bumping up against the [Sarasota County] Charter cap” of $23.5 million. (If the county needs to spend more than that cap on a project, it has to seek voter approval during a referendum.)
The purchase price alone would be $19.1 million, she said. “The final pricing won’t be known until design is completed and the bidding is done,” Eastwood told the commissioners.
Nonetheless, after looking to the ownership team members in the audience that day for their reaction to Moran’s proposal, Eastwood said they would be willing to entertain the idea.
If the addition would put the county above the Charter cap, Moran told Eastwood, that “is a pressure for this board.” Still, he said, “I appreciate your caring about the taxpayer dollars very much.”
Commissioner Detert voiced concerns about the fact, which Eastwood had pointed out, that the ownership group has made it clear that the county would need to lease the new structure for at least three years before buying it. That is related to the funding mechanism the team would be using, Eastwood said. “If we owned the building,” Detert added, “that [second floor proposal] would be different.”
Yet, Ziegler said, “I do like Commissioner Moran’s idea about having some sort of revenue opportunity. … We might as well go up a little bit,” he continued.
Commissioner Maio pointed out that the design could include just the shell of an upper floor. He reminded his colleagues that when they considered options for expanding the courtroom facilities and county office space at the R.L. Anderson Administration Center in Venice, he pushed “awful hard” for a second floor in that design. Having been involved in the construction of “dozens and dozens of buildings” prior to his 2014 election to the commission, Maio said, he knows that barrel tile roofs are the biggest expense. Yet, a roof can be lifted off, he indicated, to allow for finishing out a walled-in upper story.
More facets of the negotiations
Eastwood also told the commissioners on Dec. 9 that the 4480 Fruitville LLC lease proposal calls for the county to pay $34.75 per square foot in the first year of the Medical Examiner’s Office’s occupancy of the building. The structure is expected to encompass approximately 39,488 square feet.
Then the lease payment for each subsequent year would rise by 3% or the amount of the Consumer Price Index (CPI), whichever proved to be greater.
When Commissioner Ron Cutsinger asked Eastwood about the inflation clause, she told him, “I think CPI is more customary,” and it has been in the range of 1.5% to 2%. Nonetheless, she reiterated her earlier statement: “The proposer is suggesting the 3% [increase after the first year of occupancy].”
Additionally, the county will have to purchase not only traditional office furnishings but also specialty equipment that Dr. Vega will have to have. The expense of that equipment has been estimated in a range of $1 million to $4.4 million, Eastwood pointed out.
Taking all the factors into consideration, Eastwood projected the annual lease payments would add up to between $4.4 million and $4.9 million over three years.
The county also will be responsible for property taxes during the lease term, she continued. The total for three years is anticipated to run from $644,000 to $712,000, she added. However, a portion of those funds automatically would go back into the county’s General Fund, which is the repository for property tax revenue. The General Fund pays for operations of county departments that generate no funds on their own and for the operations of some of the county’s constitutional officers, including the sheriff and the supervisor of elections.
Finally, Eastwood explained, the lender that 4480 Fruitville LLC is using is going to require a higher level of insurance coverage than the county normally would carry. The estimated insurance expense for three years would range from $202,500 to $258,000.
Dr. Vega has given staff a list showing the savings his office would realize as a result of being in a county facility, plus a list of extra expenses, Eastwood noted. The net savings per year, she said, has been put at $270,000.
Therefore, Eastwood continued, the additional expenses the county would incur during three years of leasing the Fruitville Road facility, instead of constructing a complex on land the county owns, would run from at least $5 million to $5.6 million.
Still, as shown on a slide she presented the commissioners, prior to the start of the COVID-19 pandemic, construction costs were escalating. Thus, getting the new Medical Examiner’s Office completed more quickly “could translate into more value for the dollar,” the slide said.
A ‘positive relationship’
At the beginning of the Dec. 9 presentation, Deputy County Administrator and Chief Financial Management Officer Steve Botelho told the commissioners, “We’re really close with the lease negotiations. There’s a few loose ends.”
He and Eastwood last appeared before the board members in late August to discuss the proposal from 4480 Fruitville LLC. At that point, the commissioners authorized staff to proceed with the negotiations.
“The team has been great,” Botelho added on Dec. 9. “It’s always been a very positive relationship thus far.”
Along with Willis A. Smith Construction, he named Hembree & Associates, a commercial real estate management agency in Sarasota; the Williams Parker law firm; and Dr. Vega.