HomeMy WebLinkAbout07-19-2016 Item 06 Lease Agreement for 999 Monterey Street, Suite 345
Meeting Date: 7/19/2016
FROM: Michael Codron, Director of Community Development
Prepared By: Rebecca Cox, Supervising Administrative Assistant
SUBJECT: LEASE AGREEMENT FOR 999 MONTEREY ST, SUITE 345
RECOMMENDATION
Approve and authorize the City Manager to execute a lease agreement in a form subject to the
approval of the City Attorney for 2,000 square feet of office space at 999 Monterey St, Suite 345
between the City of San Luis Obispo and Jamestown Premier SLO Retail, L.P.
DISCUSSION
The Community Development Department (CDD) requests approval of the lease of 2,000 square
feet of office space located at 999 Monterey Street, Suite 345, in the Court Street project. The
space will accommodate eight to 12 employees for a period of three years. Funding for the lease
was approved in the department’s 2016-17 fiscal year budget, as part of the 2015-17 Financial
Plan Supplement. As discussed in the Significant Operating Program Change (SOPC) presented
with the Supplement, the proposed change will free up space at the City’s 919 Palm Street
offices to accommodate growth in development review and code enforcement activities. In
addition, the change will enable the City to establish a one-stop shop at 919 Palm (during this
calendar year) to improve customer service and increase the quality of applications submitted to
building and planning.
The growth in development review activity has required CDD to increase its staffing resources to
provide timely service, such as subdivision plan reviews, processing of architectural review
applications, and building permit plan check and inspections. To address this growth in work
activity, the City Council approved the conversion of six temporary employees to regular, full-
time positions, and provided funding to maintain six other temporary staff members as part of the
2015-17 Financial Plan. In addition, CDD was approved for four additional temporary staffing
positions as part of the 2016-17 Financial Plan Supplement. In total, between CDD and Public
Works, there will be 23 additional temporary and regular staff working at 919 Palm than there
was when the building first opened its doors.
The proposed lease is a temporary solution to allow time for a reconfiguration of the 919 Palm
Street offices to occur, or for other alternatives to be developed. Community Development and
Public Works is working with the architectural firm Ravett Albrecht to prepare an analysis of
existing office spaces. The study will make recommendations for reconfigurations that can
accommodate staff in more productive work environments, where shared work spaces are
supported by additional resources such as access to private workstations for focus work, and
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additional conference and break-out rooms. In addition, the City Council approved a major space
needs analysis as part of the 2015-17 Financial Plan Supplement that will inform the City’s long
term office space planning.
FISCAL IMPACT
Staff has negotiated a cost of $2,500 per month for the 2,000 square foot lease space ($1.25 per
square foot). Total cost for lease space is $31,800 in 2016-17, $31,800 in 2017-18, and $31,800
in 2018-19, factoring in minor additional cost for electricity and water. The annual lease amount
will increase 3% in the second and third years of the lease. The total one time cost to span from
FY 16-17 to FY 18-19 is $95,400. The full cost will be offset by over realized revenues from
Development Services Fees. Funding for the lease was approved as part of the 2015-17 Financial
Plan Supplement, and as a result the resources are available in CDD’s budget for the 2016-17
fiscal year.
ALTERNATIVES
1. Deny or Defer Lease Agreement. The City Council may decide to not approve this lease and
continue the status quo. Denial of the request will continue the current situation where staff
are required to share space in “bullpen” configurations within the office at 919 Palm Street,
which impacts their ability to be productive and attentive to departmental priorities. In the
future, shared space is part of the plan for accommodating more bodies within the 919 Palm
Street office, however, those shared spaces will be supported by additional private work
spaces, collaboration spaces, and other features that enable an employee to be productive
during all phases of the work day.
2. Implementation in a Different Way. The study being prepared by Ravett Albrecht will
identify alternatives to plans for reconfiguration of 919 Palm Street, including use of the
Wellness Room in the Old Library, and/or reconfiguration of the downstairs offices at City
Hall. Ultimately, all of these alternatives may be necessary at some point to accommodate
future staffing needs. The larger space needs analysis approved by the City Council and
funded in Fiscal Year 2016-17 will provide additional recommendations for addressing the
City’s overall office space demand.
Attachments:
a - lease agreement
b - SOPC Lease Space
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SIGNIFICANT OPERATING PROGRAM CHANGE – COMMUNITY DEVELOPMENT
TEMPORARY LEASE SPACE TO ACCOMMODATE GROWTH AT 919 PALM
Summary of Change: The Community Development Department is proposing to lease 2,000 square feet of office space
located at 999 Monterey Street, Suite 345, in the Court Street project to accommodate 8-12 employees for a period of
three years.
Fiscal Impact: Staff has negotiated a cost of $2,500 per month for the 2,000 square foot lease space . One-time costs of
$50,000 are estimated to furnish the space and make information technology improvements such as cabling and an air -link
for data connectivity to City Hall. Total cost is $81,800 in 2016-17, $31,800 in 2017-18, and $31,800 in 2018-19. The
only additional expenditure outside of the monthly rent is for water and electricity, expected to total $1 50 per month or
$1,800 annually. The total one time cost to span from FY 16-17 to FY 18-19 will total $145,400. The full cost will be
offset by over realized revenues from Development Services Fees.
15/16
Forecast
15-16
Financial
Plan
Budgeted
Revenue
Forecasted
Revenue in
Excess of
Budget
Over Realized
Revenue
Eligible for
Appropriation
Appropriated
Development
Services
Balance
16/17 SOPC Requests Forecasted
Revenue in Excess
of Budget after
SOPCs
Staffing/Consultant Lease Space
$4,825,962 $3,734,000 $1,091,962 $818,972 $200,000 $661,423 $145,400 $212,149
Service Level Impact: The proposed change will enable space to be created at the 919 Palm Street office to
accommodate growth in development review and code enforcement activities. In addition, the change will enable the City
to establish a one-stop shop at 919 Palm to improve customer service and increase the quality of applications submitted to
building and planning.
KEY OBJECTIVES
1. Accommodate high levels of permit activity by freeing up space at 919 Palm Street to accommodate additional staff in
planning and building.
2. Implement a one-stop shop at 919 Palm Street to give project applicants access to the development review team to get
coordinated feedback on project proposals and definitive answers to key questions in advance of submitting an
application.
3. Allow time to design and construct a reconfiguration of 919 Palm Street to accommodate staff in a collaborative and
productive work environment.
EXISTING SITUATION: FACTORS DRIVING THE NEED FOR CHANGE
20 more employees than when the doors first opened, with more on the way.
As part of the 2015-17 Financial Plan, the City Council approved the conversion of six temporary employees to regular,
full-time positions, and provided funding to maintain six other temporary staff members – all in support of the
development review process. Revenue from development review activities continues to exceed projections and
Community Development is currently requesting three additional temporary staff to manage the workload. In addition, the
establishment of a Rental Housing Inspection Program added four full -time, regular positions to the department. In total,
Community Development has grown by 15 employees and Public Works has grown by 4 employees located at 919 since
the office space was first occupied.
Community Development is now requesting three additional temporary positions (see associated SOPC), and has initiated
plans to create a one-stop shop for permit services located at 919 to improve customer service and the quality of
applications submitted for review. These plans place additional demands on already impacted workspace at the 919 Palm
office space. The corresponding CIP project proposed to design reconfigured work space at 919 Palm will accommodate
this growth in a thoughtful and well-planned manner to ensure ongoing efficient and effective service to residents and
other customers.
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SIGNIFICANT OPERATING PROGRAM CHANGE – COMMUNITY DEVELOPMENT
TEMPORARY LEASE SPACE TO ACCOMMODATE GROWTH AT 919 PALM
How have we accommodated the additional staff, and what are our plans to improve on that situation?
The changes made at 919 Palm Street to accommodate the increased staff have been primarily to create “bullpens” or
shared workstations that group as many as five employees where two workstations previously existed. This has resulted in
less than optimal working conditions for staff that spend much of their day analyzing, researching, and preparing reports
and recommendations. For staff that works in the field much of the day, time in the office is also important for conducting
research, important phone calls, and plan checking activities. While shared work spaces are an important part of future
plans for accommodating additional staff at 919 Palm, these should only occur where there are supportive facilities that
provide quiet work environments for focus work, collaborative areas that support group work and innovations, and shared
resources such as a library of code books so that space can be used more efficiently and effectively. Without these
features, staff working in the bullpens often feel trapped and unable to complete their work in a timely manner. The
proposal to relocate up to 12 staff members for a period of three years will enable design and construction of a new
concept for the layout of 919 Palm Street to occur without sacrificing a productive and supportive work environment.
Additional Benefits: One-Stop Shop Concept
The co-location of Community Development and Public Works at the 919 Palm offices has resulted in improvements in
communication and service delivery through the development review process. As the City has started to measure its
performance in the areas of building and planning permit services (e.g. plan check cycle times, percent of applications
deemed complete on first submittal), it has become apparent that changes are necessary to support improved performance
and increased customer service. One of the ways jurisdictions are able to improve performance in the area of building and
planning permitting is through the creation and implementation of a one-stop shop for permit services. The counter at 919
Palm was originally envisioned to perform this function, however, additional steps are necessary to fully support staff in
performance of plan check and permitting functions.
A working group made up of members of the City’s Development Oversight Committee and Development Review Team
is developing a program to provide this support to staff so that the associated customer service improvements can be
accomplished. The initial vision is to have all staff involved in development review activities (including planning,
building, and public right-of-way permits) convene at the one-stop shop up to four hours each week. During this period of
time, staff will work together on permit plan check activities, will meet with members of the public who are either
contemplating making an application or need additional information on a project already in plan check, and, staff will use
this time to participate in cross-training activities for the customer service team at the 919 counter. Mobile workstations
will provide staff located in the one-stop shop the ability to access the City’s network and complete normal work
assignments as if they were at their regular office location. It is also important to note that cross -training is seen as an
essential function of the one-stop shop to ensure consistent communication between customers and the customer service
team working at 919 Palm.
Accomplishing the one-stop shop will require retrofitting existing space within 919 Palm with mobile workstations and
plan check resources so that staff can accomplish all of the work they would normally complete at their desks in this new
resource area. The changes include additional network support, mobile computing hardware, and furniture modifications.
Interim Solution
With the approval of the proposed off-site lease space, an interim solution for the one-stop shop is possible in 919 Palm
using the existing area outside of the Chief Building Official’s office. This area is already configured in a way that will
enable collaborative work between six members of the development review team, allowing staff in the one-stop shop to
use mobile workstations and a shared plan check table to review plans, perform cross-training with staff at the public
counter, and meet with prospective applicants regarding their plans.
GOAL AND POLICY LINKS
This operating program change ties to previously adopted goals or policies including:
1. Identify and support ideas for continued improvement and development within the Community Development
Department (E-140).
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SIGNIFICANT OPERATING PROGRAM CHANGE – COMMUNITY DEVELOPMENT
TEMPORARY LEASE SPACE TO ACCOMMODATE GROWTH AT 919 PALM
2. Continue to improve the development review process by implementing the recommendations of the Department’s
Organizational Assessment (E-145).
3. Implement a comprehensive performance management system to track the efficiency and effectiveness of permit
review (E-145).
4. Provide an in-house pre-application review process for applicants that have downtown complex mixed use
projects for code compliance as well as other applicants seeking advice and coordinate with other divisions as
needed (E-154).
PROGRAM WORK COMPLETED
On April 27, 2016, a preliminary report on how the City uses available space in 919 Palm, the lower level of City Hall, the
Old Library, and the Ludwick Center, was submitted by Ravatt Albrecht, an architectural firm that specializes in the
design of interior spaces. This work will inform the program, and ultimately the design of the reconfigured 919 Palm
office space. The report includes recommendations for a much more efficient layout of workspaces on the floor of 919
that will accommodate more people, support collaboration, and still provide employees with quiet work areas to
accomplish focus work.
ENVIRONMENTAL REVIEW
No environmental review required.
PROGRAM CONSTRAINTS AND LIMITATIONS
The lease space is being made available to the City for a three -year term. Three years is assumed to be sufficient time to
design, plan and implement a reconfiguration of the work space at 919. However, funding for a larger project is not
available at this time and will be dependent on other priorities. The project is constrained because after the three -year
period the staff working in the new lease space will be expected to move back to 919 Palm.
STAKEHOLDERS
Residents, property owners, and other community members who receive service from the Community Development
Department will be positively impacted by this change.
IMPLEMENTATION
Task Date
1. Execute Letter of Intent June 2016
2. Complete lease agreement July 2016
3. Implement moving plan July 2016
4. Occupy new lease space August 2016
KEY PROGRAM ASSUMPTIONS
Staff assumes that three years will be sufficient time to design and construct improvements at 919 Palm Street that will
allow for all staff to be accommodated within the existing work area.
PROGRAM MANAGER AND TEAM SUPPORT
Program Manager:
Community Development Director
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SIGNIFICANT OPERATING PROGRAM CHANGE – COMMUNITY DEVELOPMENT
TEMPORARY LEASE SPACE TO ACCOMMODATE GROWTH AT 919 PALM
Project Team:
Community Development Department Management Group, including the Chief Building Official, Deputy Directors, and
Administrative Analyst.
Alternatives:
1. Continue the Status Quo. Denial of the request will continue the current situation where staff are required to share
space in “bullpen” configurations within the office at 919 Palm Street, which impacts their ability to be productive
and attentive to departmental priorities. In the future, shared space is part of the plan for accommodating more bodies
within the 919 Palm Street office, however, those shared spaces will be supported by additional private work spaces,
collaboration spaces, and other features that enable an employee to be productive during all phases of the work day.
2. Implementation in a Different Way. The Ravett Albrecht study has identified alternatives to the reconfiguration of
919 Palm Street, including use of the Wellness Room in the Old Library, reconfiguration of the downstairs offices at
City Hall. Ultimately, all of these alternatives may be necessary at some point to accommodate future staffing needs.
OPERATING PROGRAM
Community Development Administration (40100)
COST SUMMARY
ONGOING EXPENDITURES
Line item description PROGAM ACCOUNT #AMOUNT
STAFFING
CONTRACT SERVICES
OTHER OPERATING EXPENDITURES
MINOR CAPITAL
TOTAL ONGOING OPERATING CHANGE -$ -$
ONE-TIME EXPENDITURES
Line item description PROGRAM ACCOUNT #AMOUNT
STAFFING
CONTRACT SERVICES 40100 7227 90,000$
OTHER OPERATING EXPENDITURES 40100 7227 55,400$
MINOR CAPITAL
Revenue Offset Development Services Fee Revenue (145,400)$
TOTAL ONE-TIME OPERATING CHANGE -$
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