Special Project Oversight Committee (SPOC) Report #1

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SummaryBackground Reports Courthouse Square Purpose: Part one of this report contains a brief history of the project with specific emphasis on Marion County's interests and needs. Part two, is summary of the transit portion of the project. Background: In 1995 the county owned appro~umately 85% of the Senator Block. The county had been acquiring ownership of the block since 1974 when we purchased the old Senator Hotel. The aging condition of the Senator office building and the need to move county departments out of the Courthouse necessitated the county to prepare a master facility plan in 1993. The plan concluded that the county should mai.ntain its pri.mary government office buildings in downtown Salem. On three occasions since the late 1970's, the city, county and transit district recognized the Senator block as the preferred site for a transit center and also encouraged joint development as the best use of the site. In 1996, the availability of $7 million in federal funds and up to $2 million in urban renewal funds made the project a reality. Original Proposal: In February of 1996, proposals were requested to solicit a developer for Courthouse Square. The request for proposals (RFP) stated the county needed 50,000 sf of office space in the first year (1999) with an additional 60,000 sf needed for growth over a 20 year period. Developers were asked to include a design for 250 parki.ng spaces in the proposal. Dan Berrey of Prudential Real Estate Professionals and his development team consisting of Arbuckle Costic Architects and Pence/Kelly Construction was chosen to complete the project. (Note): Based on an analysis of available class A/B office space in the downtown area, the county concluded that if it had to purchase an e~usting office building or lease space for departments being displaced from the Courthouse, the lease rate would be at least $1.20/sf. This rate was chosen as a goal for rates paid by county departments in Courthouse Square. Design Evolution and Cost: The first proposal by Mr. Berrey was for a 186,000 gsf office building costing an estimated $34 million. An above-ground parking garage containing 642 parking stalls was included. Lease rates for the county, depending on different options, ranged from $0.89 to $1,42/ sf. In the originai proposal, the county would not obtain an ownership position unless a residual payment estimated at $38 million was paid.