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HomeMy WebLinkAboutREP FC 048 2017/10/03 (2016-2018) Hawai`i County Council-24 October 18,2017 ADOPTED: Ayes: Council Members David, Kanuha, Lee Loy, O'Hara, Poindexter, Ruggles, and Acting Chair Eoff—7. Noes: None. Absent: Council Members Chung and Richards—2. Excused: None. Res. 312-17: AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR LEASE OF REAL PROPERTY Authorizes the Mayor to enter into a ten-year and six-month lease with Prince Kuhio Plaza, LLC,with an option for a ten-year extension, for space located at the Prince Kuhio Plaza(former Safeway space). The property contains an area of approximately 39,525 square feet, to be used by various County agencies for general office use and related services. The annual rent would be $573,112.50 starting on July 1, 2018, and would rise incrementally to $747,781.82 ending on December 31, 2028. Reference: Comm. 470 Intr. by: Ms. David(B/R) Approve: FC-48 POSTPONED TO THE CALL OF THE CHAIR: Ayes: Council Members Chung, David, Kanuha, Lee Loy, O'Hara, Poindexter, Ruggles, and Acting Chair Eoff—8. Noes: None. Absent: Council Member Richards— 1. Excused: None. Res. 321-17: TRANSFERS/APPROPRIATES AN APPROPRIATION OUT AND FROM A DESIGNATED FUND ACCOUNT AND CREDITS SAME TO A DESIGNATED FUND ACCOUNT TO PROVIDE A GRANT TO THE COVO FOUNDATION TO ASSIST WITH EXPENSES RELATING TO THE 2017 FILIPINO-AMERICAN HERITAGE MONTH CELEBRATION AND BARRIO FIESTA Transfers $3,000 from the Clerk-Council Services —Contingency Relief account (Council District 6); and credits to the Research and Development, Hawai`i County Resource Center account. Reference: Comm. 480 Intr. by: Ms. David (Vote on Res. 321-17 is on the next page.) Page 4 REPORT OF THE COMMITTEE ON FINANCE DATE: October 3, 2017 Re: Comm.No. 470/Res. No. 312-17 PLACE: Council Chambers Hilo, Hawai`i TIME: 1:00 p.m. Council Chair and Members Hawai`i County Council Hilo, Hawaii 96720 Your Committee on Finance,to which was referred Resolution No. 312-17,reports as follows: Resolution No. 312-17,transmitted by Finance Director Collins Tomei,via Communication No. 470 dated September 15, 2017, authorizes the payment of funds of a later fiscal year and of more than one fiscal year for a multi-year lease of real property. This resolution authorizes the Mayor to enter into a ten-year and six months lease with Prince Kuhio Plaza, LLC, with an option to extend for an additional term of ten years, for office/warehouse space located at the Prince Kunio Plaza, identified as Space No. 300J, Tax Map Key: 2-2-047:006. The property contains an area of approximately 39,525 square feet,to be used by various County agencies for general office use and related services. Hamana Ventura,Property Manager, stated they have taken a proactive approach looking at maturing leases,rate structures, and in doing so, it given the opportunity to consolidate some of County leases it would save the County money down the line. He felt the County would be in a better and stronger position going forward. Council Member Susan Lee Loy asked which offices or departments were being looked at to consolidate. Mr. Ventura stated they are looking primarily at the Office of Aging and Housing. There is adequate space for both services and, in addition,they will have space for other departments as the need arises, including warehouse space. Council Member Eileen O'Hara inquired as to whether this was a new space and Mr. Ventura's response was that it is a new location,which is the former Safeway space located next to Longs. He stated Safeway,the current tenant, decided to move to another location and the County will be the replacement tenant. The only other tenant in that building is CVS/Longs. Council Member Herbert M. Richards, III asked if it was a ten-year fixed rate,to which Mr. Ventura replied that it's starting at a base rent of$1.20 a square foot with an annual rate increases of approximately 3 percent. Council Member Aaron S. Y. Chung questioned how much is being paid for Housing at this time. Deanna Sako, Director of Finance,responded that over the next ten years there would be a savings of approximately $2.4 million. Housing at the armory is free but roughly paying $110,000 a year at the other location(the Section 8 area), which is 7,000 square feet. Ms. Sako FC Report No. 48 S FC-48 Page 2 October 3, 2017 noted that the armory space contains 6,500 square feet and stated that Office of Aging is at $538,000 but that lease is ending and the proposal is to escalate significantly. Right now the rented portion is just under 17,000 square feet for the facility and warehouse space. Mr. Chung asked if building a place has been considered. Ms. Sako stated that they are looking at different options as they evaluate the leases as well as looking into buying some of the current facilities. She noted that building something is difficult because the County does not have land in the area. Council Chair Valerie Poindexter supports this but expressed concerns of taking retail space away and the effects on Hilo. She suggested that this area be left for retail and to check into the old State buildings that are being abandoned. A possibility would be to work with the State and have them give the County an executive order for the land and then build something. She noted that these areas of Hilo can be left for other potential retail stores. Council Member Dru Mamo Kanuha agreed and is in favor of consolidating and building a new facility that can house and support many different departments. The County needs to look at different ways to make space for the County and also to generate income by renting unused spaces. Mr. Chung asked if there will be any capital expenditures in getting this shell ready for occupancy. Ms. Sako expressed there will be some but the landlord is willing to help with the build out costs and renovations, and that the County is also working with Public Works to keep our costs down. Pursuant to Section 10-11 of the County Charter, "any contract, lease or other obligation requiring payment of funds from the appropriations of a later fiscal year or of more than one fiscal year be approved by resolution." Your Committee on Finance is in accord with the purpose and intent of Resolution No. 312-17, and recommends its adoption. dm AYES NOES ABS EX Respectfully submitted, CHUNG X DAVID X COMMITTEE ON FINANCE EOFF X KANUHA X LEE LOY X '.440 O'HARA X POINDEXTER X MAILE DAVID, CHAIR RICHARDS X FC REPORT NO.: _ 4.8 _ RUGGLES X ADOPTED: