Lease, buy or build. Yellowstone County has a smorgasbord of options to consider from six proposals submitted on Tuesday for downtown office space.
The county commission opened sealed bids from six vendors during its board meeting and referred all proposals to a committee for recommendation.
“Obviously, this is going to be a very difficult thing,” said Yellowstone County’s Chief Deputy Attorney Dan Schwarz.
Schwarz, along with Finance Director Kevan Bryan and Public Works Director Tim Miller, form the committee that will be analyzing the proposals and making a recommendation to the commission.
Schwarz said a recommendation is expected by a Nov. 13 commissioner discussion meeting, with a commission decision at its Nov. 14 board meeting.
The county is seeking more office space as part of a courthouse remodeling project to relocate its fourth-floor offices to it can remodel that floor for two new district court judges authorized by the 2017 Legislature. The new judges will take office in January 2019.
The fourth floor offices include the commissioners, clerk and recorder, auditor and finance department.
The county’s request for proposals sought a minimum 14,000 square feet to 30,000 square feet of professional office space and occupancy no later than April 1, 2018.
In addition to other criteria, the office space also had to be located within the central business district, with preference given to properties located closer to the courthouse. The county broadened its area of interest from an initial two-block radius of the courthouse. The county also sought a guaranteed number of parking spaces to be reserved for the county, in addition to a range of lease terms and purchase options.
Proposals came from:
- Management Group, Aaron Sparboe, president, for the Wells Fargo Building, 175 N. 27th St.
- WC Commercial LLC for the Stillwater Building, 316 N. 26th St.
- Berkshire Hathaway, Travis Dimond, agent, for 2804 Third Ave. N.
- Coldwell Banker for U.S. Bank, 303 N. Broadway.
- Boyer for a “build to suit” on county-owned property at 2550 Third Ave. N.
- NAI Business Properties for the Miller Building at 2825 Third Ave. N.
The Management Group’s proposal for the Wells Fargo building is for leasing the third floor and part of the fourth floor.
WC Commercial offered to lease the third floor of the Stillwater Building. The proposal said it was not offering condo space but offered an option to buy as a condo at the end of a lease.
The county first looked to the Stillwater Building, which is the former federal courthouse, to purchase the third floor as condo space. Developer EEC of Billings has abated the asbestos from the large, five-story structure and is looking for tenants.
A commercial appraisal obtained by the county valued the Stillwater’s third floor at $3.6 million to $3.75 million for condo space.
The Berkshire Hathaway offer is to sell all four floors of the Masonic Lodge, at 2804 Third Ave. N., which is across the street from the Alberta Bair Theater. If the county were to buy property, it is required by state law to get a certified appraisal before purchase. The county cannot pay more than an appraised price under state law.
Coldwell Banker is offering to lease the third and fourth floors in the US Bank building. The floors were formerly occupied by Talen Energy, which has moved out.
Boyer’s proposal is to “build to suit” on county-owned property at 2550 Third Ave. N., which is the site of the round building, formerly occupied by the sheriff’s office. The round building would be replaced as part of Boyer’s proposal.
The county is considering remodeling the round building but has estimated it would cost about $1.5 million to add bathrooms on the main floor, replace the heating and cooling system, upgrade lighting and make other improvements.
Bryan called a round building remodel the “choice of last resort.”
The sixth proposal, from NAI Business Properties, is for lease of the second and third floors in the Miller Building, which is where the county’s planning office is located.
In analyzing the proposals, the committee will score the offers using a point system with a maximum 200 points possible. The approach will award points for location, cost per square foot, ability to purchase, suitability/condition of space, parking, security and IT access and suitability.
The county has not designated a budgeted amount for the move but will make a mid-year budget adjustment once it decides how best to proceed, Bryan said.
“We just have to see what’s going to work out,” Bryan said.