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I I I Council Meeting Minutes May 24, 1994 Page 11 Council Business. continued Williams asked if these figures were reviewed by other staff members. Fulton confirmed that Egan has reviewed the analysis. Egan noted her concurrence with the assumptions and approach used to compute the occupancy figures. Williams asked what would be the impact to the City if the third floor was unoccupied by the end of 1995. Egan confirmed that there would be a loss of $86,000 in rental income for that second half of 1995. Fulton noted that the internal financing of the project gives the City a greater flexibility in regards to bonding issues. Williams asked if staff has identified a tenant. Fulton confirmed that the City has not retained a property management firm, but meetings has been held with the school district and Ramsey County to determine potential interest. The Park Department has discussed potential interest with private medical businesses. Fulton added that the Towle study suggests the absorption rate of 9 to 18 months to occupy the building. Williams feels that the Towle absorption rate is too aggressive and asked what marketing techniques will be used to locate tenants. Carlson feels the City should utilize a real estate broker to seek out tenants. He noted that existing office buildings sell for about $20-30 sq. ft. as compared to the City's initial investment of $65 per sq. ft. He said the decision should depend upon the City's future plans for the facility. Williams is not adverse to building the third floor provided it strengthens the building's purpose, however, he is not interested in private tenants who do not have a connection to family services. If compatible tenants which contribute to family services were identified, he would support the third floor. However, he has difficulty accepting the construction of a third floor merely to provide extra space. Gunderman shares the same concerns expressed by Williams and asked Anderson if there are interested groups to utilize the third floor. Anderson feels there are compatible tenants for the building, but the issue is what these tenants could afford to pay for rent. The City was approached with a request from the Mounds View School District for additional space beyond what they own. There has been contact with the Ebenezer Society in locating a senior citizen day care, but there is some question if they could afford the rates. Anderson suggested a shared office space arrangement between tenants which could benefit both the community and the City. Anderson stated there is no question in his mind that the space could be filled, but is unsure of the City's financial return in such an arrangement. Larson asked if the Family Center could incorporate a joint venture for senior center activities. Anderson noted that one consideration in providing services to seniors is that preferably those activities should be located on the first floor. Walter Martin, 2439--17th Ave., feels the taxpayers should not be forced into paying for another government owned facility. Benke noted that Council needs to decide whether it is prudent to construct a third floor and whether its revenue would lower the existing obligation. Martin feels New Brighton is trying to compete with other cities who have community centers. Benke said the Family Center provides a proactive approach to providing services to families; and the City continues to determine the best approach in keeping property taxes affordable. Council Business Potential Construction of Third Floor for the Family Service Center Report 94-131