[BoulderCouncilHotline] Alpine-Balsam Pavilion Building

[Yates, Bob]

City staff:


Thank you for the preliminary memo on the Alpine-Balsam Pavilion Building in preparation for our August 27 council meeting. Below I list some of the questions that I anticipate asking at that meeting, including questions that I have asked in previous council meetings which I believe have not yet been fully answered. Please provide answers in the final version of the memo or at the August 27 meeting.


Best,


Bob


  1.  Use: If council decided not to place city offices in the Pavilion Building, would we deconstruct it or would we sell it to a third party?
  2.  Value: What is the market value of the Pavilion Building, using recent sales comps? Assume for this valuation that the deconstruction of the adjoining hospital buildings is completed in such a way as to make the Pavilion Building useable as office space (as staff is proposing for city office use).
  3.  Immediate expense: If the city spends $2 million on programming and design work on the Pavilion Building over the next two years--as staff proposes--and council then decides not to use it for city offices, would that work be useful to and transferable to the ultimate owner of the building, allowing the city to recoup its $2 million expenditure through a higher sale price?
  4.  Hub: The memo mentions creating a customer hub in the Pavilion Building. How many customers currently visit the city offices that would be relocated to the Pavilion Building? Has this number trended up or down in recent years?
  5.  Deconstruction: Does the $60 million estimated cost of the renovation of the Pavilion Building include the deconstruction costs for the New Britain and Park Central buildings that it would replace. If not, what are the estimates of these costs?
  6.  Operating expense: How does the $3 million in annual debt service on the costs of renovation of the Pavilion Building compare to the annual costs of renting and maintaining the buildings it will replace? In doing this comparison, please include the cost of maintaining the Pavilion Building, so that we have an apples to apples comparison. The table on page 52 of the preliminary memo and the February 12 staff memo start to address this, but the underlying assumptions about the future (like rent escalation rate) are not fully provided. Rather than digging into those long-term future assumptions, please simply provide the avoided costs (rent and maintenance) and the anticipated new costs (debt service and maintenance) on day one of use of the Pavilion Building.
  7.  Capital expense: How does the $60 million in renovation costs, plus the value of the Pavilion Building (provided in response to question 2), compare to acquiring or constructing a comparably-sized building in another part of town? Please provide recent comps of actual sales or construction, showing costs per square foot of alternatives. The tables on pages 50-51 of the preliminary memo start to address this question, but don't include the value of the Pavilion Building (or, alternatively, the allocable share of the $40 million site purchase price). If you want to include parking in the comparison, then factor in the value of the Alpine-Balsam parking garage (or the allocable share of the $40 million purchase price). Since furniture, fixtures, and equipment would be needed under any scenario, they should be eliminated from the comparison, unless you believe that FF&E would be significantly different under the alternatives (and, if so, explain).

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