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Home My WebLink About06/16/1998, C2 - REAL PROPERTY ACQUISITION - 879 MORRO STREET council ne June 16 1998 acEnOA IZEpont 't=Nh. CITY OF SAN LUIS OBIS.PO FROM: John Moss, Director of Utilities" SUBJECT: Real Property Acquisition- 879 Morro Street CAO RECOMMENDATION 1. Approve the purchase of property located at 879 Morro Street for the price of$468,034. 2. Authorize preparation of letter of friendly condemnation. 3. Authorize CAO to sign purchase documents and deed. DISCUSSION On April 21, 1998 Council authorized staff to enter into negotiation with Tom Copeland for the purchase of the property located at 879 Morro Street. The proposed use of the property after acquisition would be for office space for Utilities Department Administration and Conservation staff. Council also authorized staff to contract with a local architect to obtain a refined rehabilitation and construction cost estimate for remodel of the building to accommodate its proposed use. This report recommends that Council approve the purchase of the property at 879 Morro Street for the negotiated amount of $468,034 which is within the negotiating amount authorized by Council. In Council's consideration of this recommendation, Council should also review the refined construction cost estimate provided in the attached report provided by Fraser and Seiple Architects, which identifies the additional costs for seismic retrofit, fire sprinklers and remodel of the structure required before use as City office space. Previous staff reports have presented the need for additional office space for the Utilities and Public Works Departments. In short, it was identified that in order to meet the growing demands being placed on both departments and accommodate existing and future staffing requirements, additional office space would be needed. The property under consideration meets the identified space needs for Utilities as well as other important considerations such as adjacency to City Hall and potential future value for enhancement of the Palm Street parking structure. The anticipated minimum utilization of the property as office space for the Utilities Department is 15 +years. The appraised value of$450,000 was established by Rollie McCormack,MIA, of the San Luis Obispo firm of Schenberger, Taylor, McCormick, and Jecker, Incorporated and provided an initial point of negotiations. High and low estimates for acquisition, construction and furnishing, including seismic safety improvements were provided in the April 21, 1998 staff report to Council and are summarized in the following table. Council Agenda Report-Property Purchase-879 Morro Street Page 2 Preliminary Cost Estimate 879 Morro Acquire and Remodel Project Low High Acquisition $450,000 $495,000 Strengthen and remodel(plus 10%contingency) 250,800 308,000 Design&Study services(estimated at 15%to 20%) 39,600 61,600 Acquisition and Construction Subtotal $740,400 5864,600 Furnishings 66,000 80,000 Total $806,400 $944,600 Based on the negotiated purchase price of$468,034 and the refined construction cost estimate of $317,756 provided by Fraser and Seiple Architects,the revised acquisition and construction cost projections as shown in the following table are within the previous high and low estimate provided in the April 21, 1998 staff report. Additional costs have been added in the following table to those provided in the previous staff report to cover miscellaneous escrow closing costs and construction management services. Refined Cost Estiniare 879 Morro Acquire and Remodel Project Acquisition $468,034 Strengthen and remodel(plus 15%contingency) $317,800 Furnishings(high estimate) $ 80,000 Total $865,834 Additional Costs Miscellaneous closing costs $ 11,966 Construction management $ 30,000 Design& Study services(estimated at 20%) $ 63,600 Acquisition and Construction Total $971,400 A Phase I Environmental Assessment of the building was performed by ATC Associates of Marina, California, and found no evidence of Recognized Environmental Conditions (RECs). Their conclusion was that no further evaluation was warranted. However, before construction, ATC recommended a comprehensive asbestos survey to evaluate the type and condition of any suspect materials. The samples taken in the phase 1 assessment showed no asbestos, but this is not conclusive. The cost of such a survey would be between $2,500 and $3,000, depending on the number of samples required. The survey will be completed after Council approves the acquisition of the property and any conditions requiring special handling will be identified in the preparation of the plans and specifications for improvements and included in the final construction cost estimate for the remodel project. Council Agenda Report-Property Purchase-879 Morro Street Page 3 CONCURRENCES The Public Works Director concurs with the recommended action. General Plan Consistency The Planning Commission considered the City's acquisition of this building on May 27, 1998 and found it to be in conformance with the General Plan. FISCAL IMPACT The negotiated purchase price for the property is $468,034. There will also be some miscellaneous expenses associated with closing escrow. The needed funds were recommended and considered for appropriation, as a part of the water and sewer enterprise fund analysis and included as a 1998-99 Capital Improvement Plan Request, at the June 2, 1998 meeting of the City Council and are anticipated to be approved with the remainder of the City's 1998-99 Budget on June 16, 1998. The requested appropriation includes funds for all aspects of the project, including furnishings. It is anticipated that escrow will close in August of 1998. The refined total cost estimate for acquisition and construction is $971,400.. Based on the fund analyses and revenue projections presented at the June 2, 1998 Council meeting, sufficient working capital in the Water and Sewer Fund is available to support the project. Staff recommends that the Water and Sewer Funds pay 68% and 32% respectively of the project costs. This is based on the duties of the staff to be located in the office space, many of whom are charged full time to water activities. ALTERNATIVES Do not purchase the property. This alternative is not recommended as the options available for meeting the growing space needs of the Public Works and Utilities Departments are very limited and opportunities which also meet longer term goals of the City such as enhanced parking are even more limited. SUMMARY Next Steps. An estimated schedule of activities to follow the recommended action is as shown below: Staff prepares RFP for Architectural and Design Services June 1998 Solicit Proposals July 1998 Award Design Contract August 1998 Complete Design and Plans and Specs December 1998 Advertise for Construction Jan.-Feb. 1999 Award Construction Contract March 1999 Complete Construction and Move-in Summer 1999 ��•3 Council .genda.Report=Property PurchAse='879 Morro Street. Page 4 Attachments Refined Construction Cost Estimate- Fraser•and Seiple Architects. Vicinity Map Purchase Agreement(Copy avail'atile in the Council Reading File) �n S� �r`� p May 18, 1998 LUIS OBISPO PUBLIC WORKS/UTILITIES John Moss Public Works Department City of San Luis Obispo 955 Morro Street San Luis Obispo, CA 93401 RE: Estimate Refinement, Improvements to 879 Morro Street Dear John: Subsequent to the preliminary estimate I transmitted last week I've received our electrical engineers analysis, reviewed heating,ventilating and air conditioning requirements with our mechanical engineer and have refined several other components of our estimate. Among our additional findings are the following: 1. The spaces inside the building are generally suitable for the Utility Division offices. Only the perimeter walls and the hallway/stairway walls perpendicular to Morro Street are load- bearing, so both floors can be reconfigured from reasonably well proportioned rectangles. 2. The second floor attic is about 24"tall and well configured for the routing of new ducts, conduits, and related installations. This allows us to reduce our estimate for duct routing. 3. Much of the work of electrical remodeling is subtractive, but a lot of modernization still needs to be done. The electrical estimate has been upgraded per Bill Thoma's input and amounts have been added for data/communications and alarms. 4. It is unlikely that any of the existing roof mounted air conditioning equipment can be efficiently re-used. Most of these units were installed to address specific equipment requirements and would not suit general office areas. The estimate for mechanical systems assumes a complete new installation. 5. The estimate for seismic upgrades has been reduced to compensate for the fact that the original engineers estimate included its own overhead/bond/profit multipliers, which we've applied to the overall estimate. 6. We've corrected a couple of mistakes in the preliminary estimate. The line item for fire sprinklers was left out and we had a math error in the total. 9. i 0305 Street Son Luis Cb;sDo (0H0rn:s 93»01 is6 5;= ;,15s n� 5/18/98 John Moss Page 2 These factors affect our 5/11/98 preliminary estimate as follows: Seismic Upgrades: Devaney Co. 11/21/94 estimate,with 42 mo. inflation @ 4%per year. 73,814.00 X 1.14= 84,148.00 Interior Remodeling and Finishes: Allowance: 3,923 g.s.f. X$25.00/s.f.= 13,652.00 Exterior Street Elevation Improvements: Allowance: 880 s.f.X$15.00/s.f. = 13,200.00 Other Exterior Remodeling and Finishes: Allowance: 1,760 s.f. X$6.00/s.f.= 10,560.00 Roofing: Built-up membrane: 19 sq. X$149.38= 2,838.00 Plumbing: 13 new fixtures X$1,257.70= 16,350.00 Mechanical: New equipment and ducting: 3,923 g.s.f.X$7.50= 29,423.00 Fire Sprinklers: Complete system: 3,923 g.s.f.X$2.50= 9,808.00 Electrical: Reconfigure power, new lighting(per engineer)= 41,935.00 . Data/Communications: Upgrade to Category 5 cabling (per engineer)= 12,000.00 Alarms: Allowance(per engineer) = 5.000.00 SUBTOTAL 238,914.00 General Contractor Overhead, Profit, Bonds: 18%= 43,005.00 Contingency: 15%= 35.837.00 TOTAL: $317,756.00 C��•L 5/18/98 John Moss Page 3 Attached here is the report Bill Thoma prepared describing electrical system upgrades. I will be out of the area through Wednesday, June 3. I'll get back in touch with you or Sue Baasch at that point to review what additional level of analysis is appropriate to complete this effort. .4 Sincerely, Bruce Douglas Fraser, AIA Principal FRASER SEIPLE ARCHITECTS attachment UQ/1/./ba tut i-I:U0 1-.AA 61,10 043 "Zkf LKU31A hI&CIMIC INC LIM 001 ELECTRIC CO. May 12.. 1998 Bruce Fraser Architect 971 Osos St San Luis Obispo, CA 93401 Re: 879 Morro Street Dear Bruce As you have asked,we have visited the site and considered the conversion of this building for the purposes of expanding into City office use. The following observations should be noted based on our very brief sire observation conducted on 5/4/98. 1. The building is currently fed by (2) 200amp 120/240volt single phase services (several separate meters however total capacity of 400amps). Thcre is no 3phase available in the building. 2. Currently there are two emergency generators servicing telecommunication equipment. One on the roof and one on a trailer located immediately behind the building. Both units are likely to be removed when the current user vacates the property. 3. There is a tremendous amount of conduit subpancls, and branch circuit wiring that has been added over many years of the existing user's telecommunication system growth. Most of this infrastructure is likely to be removed because it is of little value to the Citv for their purpose. 4. There are 5 or 6 HVAC units on the roof with(3)priniarily feeding the equipment rooms on the first level. It appears that possibly two units are conditioning the upstairs offices.. 5. There is likely to be some fairly radical re-arran.-enient of the main electrical incoming sen,ice from its current condition, however most of this work is demolition and possibly re-establishing a new meter for the south half of the building near the existing one at the front north cast comer near the driveway on Morro St. and a new sub-panel for branch circuiting to consolidate Circuits to one or two locations. 6. The upstairs has been converted to offices from being apaitnents. There will likely be a need to add more outlets especially for anticipated computer applications (although previous user was also using computers in these area 7. The two original "Trurnbell" panels (likely 1940's vintage panels) are still being used on the second floor for power to receptacles and lighting. These should be re-fed with new .... ��. JV ♦ul. i, .0l'.�. Du.! J1J JOLJ 1KU./li tLG1.1K11. ll\V. 40002 feeders and new panels or possibly one new larger panel. There will likely be a need for isolated ground circuits and dedicated circuits. S. The Fire Alarm System is likely to require upgrade to accommodate ADA requirements. There are heat detectors and smoke detectors in most areas of the building since the building is not fire spnnklcred. This system is likely to be required to remain or a new fire sprinkler system installed, which would also trigger a newer style panel with ADA provisions and monitoring of the fire sprinklers.. 9. The lighting in the space except for the lower floor, north side, is in need of significant improvement. Light levels are not at office levels and should be retrofitted with newer lighting as well as addition lighting. The equipment rooms are lighted with task lighfing that will be inappropriate when the equipment is removed (mostly bare lamp or strip type). 10. Telecommunications and data system cabling is likely to be necessary, either surface mounted in conduit or wiremold raceway. The building has more communication service that could ever be necessary unless it is being removed when the current tenant moves out. The only issue here :s getting the right cables to the right location in the building. 11. The attic is quite accessible with approximately 24" clearance from roof to ceiling joist except where flex duct for HVAC units are routed. 12. It appears that most electrical systems are run in "B3:", flexible conduit,or EMT. The following is my very rough order of magnitude cost for various major items: i. Demo (mainly equipment areas) $1,000.00 2. Install new 200annp meter/main $3,000.00(for south side) 3. Install new 200amp sub-panel $1,500.00(associated %v/112) 4. Upstairs office lighting (Qa$3.00 sq.ft. 5. Upstairs additional power @$1.50 sq.ft. 6. Downstairs Lighting ion sq.ft.(no attic) 7. Downstairs Power @ S5.00 sq.ft. (no attic) 8. HVAC units hooked up (x3$750.00 each(9 unknown) 9. Replacement of feeders and panels at 2"d floor $2,500.00 each(2 units) 10. New Category 5 computer cable&telephone $12,000.00 11. Fire Alarm panel with ADA devices $5,000.00(if required) I hope these comments and assessments have been of some help. Please feel free to call if you have questions or wish to pursue any one issue further. Thank you for considering our firm for this project. Sincerely, William A. Thoma Thoma Electric.Inc. Morrost.doc L;�4-9 Vicinity Map r r 1 J t r J r 1 r \ r J / ` J \ ` ` r \ r ♦� , ; r r \ � r r 1 r l ! �r ` J r 1 J r J � r t t r r J � r r 1 r A 1 r r 1 J J \ 37] \ r r \ r J r l 87 9 M orm J r \t s � r l r r r , r r ` J J \ fi ° J J r J \ l r J 1 r