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? II <{f () ">'Yc,~Qj,i,,, "d",,~{ a'\~~ I've, '[ ~ ~ ~~ l\1emo To: Neal Beets, City Manager From: Chris Miller, Finance Director Date: July 14, 2005 Re: Discussion on the Expansion ofthe License Center Background The License Center continues to experience steady growth in its overall operations. While the number of transactions overall have leveled off, the issuance of dealership vehicle licenses and passpOlis has increased substantially. The increase in these types of transactions, especially passports, has had a dramatic effect on the manner in which existing leased space is being used. Despite a reconfiguration of existing space in early 2003, added dealership and passport activity has increasingly constricted employee workspace and customer waiting areas. In addition, the lack of storage space for supplies and materials that need to be in a secure area has necessitated the use of aisles and walkways. This has created less-than-ideal, and somewhat hazardous, working conditions. Existing Lease Space Currently, the License Center leases 2,315 square feet of space in the Lexington Shopping Center. Since moving to the current location in 2000, the License Center has added passport services and has provided vehicle licensing services to an additional five (5) dealerships/auto auction houses - both of which has placed added demands on existing leased space. The License Center has an existing lease that runs through February, 2006. The lease is very favorable with terms that are approximately 15-20% below similar leasing sites. The License Center has a 3-year renewable option that could extend the lease through February 2009 - again at terms favorable to the current marketplace. Overview of Futurc Space Needs Over the next five years, we expect to realize decreasing transaction levels for vehicle tab renewals. However, these types of transactions require relatively small employee working and customer areas as contrasted with dealership vehicle licensing and passport services. As noted above, these paliicular transaction types are expected to continue increasing. Thc net result is that the demand for emplo yee working and customer service space is expected to steadily increase over the next five years. It is anticipated that all additional 1,000-1,500 square feet will be needed to accommodate expected growth.