A committee is recommending Yellowstone County lease the third floor of the Stillwater building for additional office space.
Tipping the recommendation toward the Stillwater building were convenience for the public and staff and plenty of parking for both the Stillwater building and the adjacent county courthouse.
Review committee members presented their recommendation Monday at the county commission discussion meeting. The commission is expected to vote on a proposal at its Tuesday board meeting.
Commission Chairman John Ostlund agreed with the recommendation and said the Stillwater proposal had the most flexibility and parking.
The Stillwater building is the former five-story federal courthouse, at 316 N. 26th St.
WC Commercial LLC bought the building, which is being developed by EEC of Billings.
Stillwater’s proposal was for a five-year lease with a five-year extension option. Review committee member Kevan Bryan, finance director, said the Stillwater’s proposal is $15 per square foot, including a build to suit.
If a lease is approved, the county would be Stillwater’s first tenant.
The Stillwater building was the first building on the county’s radar when it began looking to relocate its fourth floor offices, which includes commissioners, finance, clerk and recorder, and auditor.
The county needs to relocate departments to remodel the fourth floor into courtroom space and offices for two additional district court judges, which were authorized for the 13th Judicial District by the 2017 Legislature. The new judges will take office in January 2019.
Initially, the county considered buying Stillwater’s third floor as a condo. A commercial appraisal for a purchase valued the floor at $3.6 million to $3.75 million.
Other vendors also expressed interest in offering the county downtown office space, so the county issued a request for proposals. The request sought a minimum 14,000 square feet to 30,000 square feet of professional office space and occupancy no later than April 1, 2018.
The county received six proposals. Committee members, which included Bryan, Chief Deputy County Attorney Dan Schwarz and Public Works Director Tim Miller, toured each of the properties.
The committee said it was “impressed with the overall quality” of all office space offered. The overall reasons influencing its recommendation, the committee said, were convenience for the public, cost and efficiency. Those reasons led to a unanimous recommendation for commissioners to accept Stillwater’s lease proposal.
The committee scored and ranked each proposal, with a possible 200 points maximum possible. The rankings and some of the comments are as follows:
1. Stillwater building: 167 points; five-year lease with five-year extension offer. In addition to parking, having county operations on one floor would provide for a better workflow and be easier for the public. The build-to-suit option will provide maximum efficiency.
2. U.S. Bank: 146 points; five-year lease with five-year extension. The proposal had a “hefty” increase in the fifth year of the lease to be determined by market terms and conditions for comparable space. The parking options were not as good and the building was three blocks from the county employees’ parking lot.
3. Wells Fargo Bank: 140 points; 10-year lease with 10-year extension. Substantial build out would be required and there was not five-year lease option. The cost was in the middle, but there were other lower-cost options available.
4. Renovation of county’s “round building”: 134 points. The building would require “massive renovation costs" of between $1.9 million to $2.3 million, and was the second most expensive option. The committee said it could not recommend this option.
5. Miller building: 100 points; five year lease with five year extension. The square foot lease costs including build-out costs was “considerably higher” than other proposals. The building was the farthest away from the courthouse. The committee said it could not recommend this proposal.
6. Old Masonic Lodge: 95 points; purchase. The building’s open, modern design was not conducive to government operations and substantial remodeling would be needed. Renovation costs plus a $4 million asking price exceeded the county’s budget.