Development Team Meeting Notes (96-99)

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COURTHOUSE SQUARE DEVELOPMENT TEAM October 2, 1997 1:30 p.m. Conference Room B Present: Dan Petrusich, presiding, Craig Lewis, Byron Courts, Melvin Mark Development Company; Randy Curtis, Elyn Lyon, Bob McCune, Ken Roudybush, Marion County; R.G. Andersen-Wyckoff, John Whittington, Salem Area Transit; Dave Hays, Pence Kelly Construction; and Leona.rd Lodder, Arbuckle Costic Architects. Dan opened the meeting with an overview of Tuesday's meeting between Melvin Mark Companies, county, transit and the financing people up in Portland. The outcome of this meeting generated a$1.65 per square foot rent based on the cunent design and performa. This amount is higher than the county can afford. Our work is cut out to make significant changes to the project that will remove dollars from the project and close the gap. Some options were discussed. The first and most immediate from a financing standpoint would be to make the office building all govemment tenants and eliminate the private lease space. We would leave the building the size it is, but just remove any private leases. NIlVIDC also worked out another scenario considering that parking is a non-economic item. Let's look at losing the parking on the north retail end of the block. The underground parking would stop at the north block retail boundary wall, which would give us 50 feet on the north side and work with surface parking on the retail pad area. When you offer this site for future outside development, it makes the process much cleaner. You could also offer to sell this site completely and without the burden of a garage underneath. You won't have to worry about ownership issues without a pazking structure under the retail section. With an all government building, you won't need the same parking ratio that would be required with private space. Discussion regarding cutting 50 feet from the parking structure would eliminate 45-50 spaces. A quick calculation at a cost of $12,000 per space you are looking at about $500,000 in savings. Ken added that would be about 8 cents on the rent figure. Leonard added that it would eliminate 66 spaces. We are looking at some savings for every space deleted. The revenues from parking are minimal anyway. For surface parking costs you are at about $1,000 per space. There was some question whether the original parking design would qualify for exemptions per Ed Einowski at Tuesday's meeting. Ken expressed the desire to continue to maintain the target costs of $1.20 sf for rents. The board is aware of the $1.40 costs, but let's not change the tazget number of $1.20. RG asked if the $4 million shortfall was based on rents of $1.20 sf? County replied it was. Interest rates of either 7.5% or 5.5% will have an impact on the equation as well. A critical issue for transit at this point is defining true transit costs. We need to make sure that transit is not over budget. If they are, then they are hurting county's numbers. The assumption is that county could be picking up costs and transit could be feeding that deficit. This needs to be identified. If we can't build what is being designed, we need to take a serious look at this. ~ Page 1 of 7