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36 TaTonka Real Estate Advisors, to get an understanding of the Roseville market and identify 37 leasing costs for the License and Passport Center and Dance Studio. Both Mr. Chirhart 38 and Mr. Moss have decades of commercial real estate broker experience and have done 39 numerous deals on properties in Roseville over the years. Attached is a memo prepared by 40 TaTonka regarding the leasing rates in Roseville and other cost factors to take into 41 consideration when considering leasing. (Attachment 3) 42 43 The tables below show a range of annual leasing costs for a 10,400-square-foot License 44 and Passport Center and 5,000-square-foot dance studio. For the License and Passport 45 Center, staff is assuming leasing in a retail area and for the dance studio, leasing in an 46 industrial area. Additional details of the leasing costs are shown on Attachment 4. 47 Facility Square Feet Low Estimate High Estimate License & Passport 10,400 $212,680 $428,584 Center Dance Studio 5,000 $47,500 $72,500 48 The above costs do not cover any janitorial or utility costs for the use of the property. With 49 regard to tenant improvements, an allowance is typically provided by the landlord. While 50 the amount of the allowance is negotiable, for retail spaces and industrial areas they are 51 typically $2.50 - $5.00 per square foot per year of the term of the lease. So, for a 5-year 52 lease of 10,000 square feet, a negotiated tenant improvement allowance could range 53 between $125,000 to $250,000. Additional detail about leasing assumptions and tenant 54 improvements is included in Attachment 3. 55 56 If the City were to lease property for the License and Passport Center and/or the Dance 57 Studio, funds would need to be made available in the City budget to pay for the leases. 58 Currently, the License and Passport Center transfers $200,000 of program revenue to the 59 City's General Fund to lessen the need for tax levy. This program revenue could be shifted 60 to help pay for the lease, but additional funds would be needed to pay for the lease, 61 potentially from the License Center Fund or existing/new tax levy. It should also be noted 62 that if the $200,000 of License and Passport Center revenue no longer flows to the General 63 Fund, additional levy funds or cuts in the budget would be needed to address the $200,000 64 shortfall. 65 66 In regard to the Dance Studio lease, a new funding source, most likely from the tax levy, 67 would be needed to fund the lease costs. 68 69 Funding for new License and Passport Center/Dance Studio Building 70 Concept C would have a new building built to house the License and Passport Center and 71 Dance Studio in the southwest corner of Veterans Park as previously mentioned. The 72 estimate for this building is $14.5 million. This estimate is the worst-case cost scenario for 73 the new building. Of that amount, it is estimated that $11.1 million would be for hard costs 74(actual construction costs, site contingency, site conditions, and construction cost 75 escalation) and $3.4 million for soft costs (architectural design and construction 76 management fees, surveys, inspections, bidding, legal, and finance costs, and furniture, 77 fixtures, and equipment). 78 Page 2 of 4 Qbhf!56!pg!488