Need for Space
The City of Georgetown is experiencing record growth, and the proposed FY 2023 budget includes 67.5 additional FTEs to enable the City to continue provide the same level of service as in FY 2022. However, between all of the City’s facilities, there are currently zero offices and 8 cubicles available. Current facilities have been filled by a 56% growth in Staff since 2010, including 53 new employees in FY 2022 alone.
In addition to the staffing needs precipitated by the City’s record growth, several City facilities require remodeling, so additional flexibility will be required in order to shift staff around during the renovations. Finally, the City’s IT department is currently split between multiple facilities, creating logistical and security concerns. For all these reasons, additional office space is needed, but new construction will require at least three years to deliver.
Available Space
295 Southeast Inner Loop is a 33,000-square-foot standalone office building within a business park located near the intersection of Southeast Inner Loop and Austin Avenue. The building is currently occupied by Smile Doctors, LLC, which recently switch its staff to remote work and is looking for a party to sublease the facility. The space is fully furnished, including A/V equipment.
The space includes 32 offices, 100 cubicles, 3 breakrooms, 1 training room, 4 conference rooms, 4 bathrooms, and IT room, a mechanical room, and an entry lobby.
Lease Terms
As proposed, the City would sublease the space from Smile Doctors for the remainder of its term (through April 2026), to give the City time to construct or procure a new facility elsewhere. Under the proposed term, Lease Commencement is projected for October 1, 2022; however rent payments would not start until January 1, 2023, to give the City time to prepare the space for employees and to move the affected departments (still in evaluation). Initial rent would be $19.00 per square foot per year, beginning January 1.
The lease includes 110 parking spaces, and the Landlord would provide maintenance of common areas, payable by the tenants of the business park on a pro-rata basis.
Rent Schedule
|
Period
|
PSF Base Rent
|
Monthly
|
Total in Period
|
|
Commencement Date
10/01/2022 – 12/31/2022
(Free Rent Period)
|
$0.00
|
$0.00
|
$0.00
|
|
01/01/2023 – 12/031/2023
|
$19.00
|
$52,250.00
|
$627,000.00
|
|
01/01/2024 – 12/31/2024
|
$19.57
|
$53,817.50
|
$645,810.00
|
|
01/01/2025 – 12/31/2025
|
$20.16
|
$55,440.00
|
$665,280.00
|
|
01/01/2026 – 04/30/2026
|
$20.76
|
$57,090.00
|
$228,360.00
|
These costs are in addition to NNN costs (common-area maintenance, taxes, insurance, etc.) estimated at a cost of $5.00 psf per year ($13,750 per month), escalating at an estimated 3% per year.
Staff recommends approval of the sale of a Sublease on the terms set forth herein.