The existing library building, occupied by the City Planning and Community Services Department (PCSD), will be demolished in December, 2013.  Until then, a significant amount of building and construction activity will take place adjacent to the building, inconveniencing both staff and PCSD customers.  To continue to provide high quality customer service and maintain good staff morale, the PCSD sought proposals from property agents and landlords for available office space to accommodate the Department.  A Request for Proposals (RFP) was advertised in the Billings Gazette on June 10 and 17, and responses were requested by June 29.  Nine proposals were received.  During the summer, the proposals were evaluated based on the selection criteria listed in the RFP:
A. Cost
B. Adequacy of space/layout
C. Location
D. Remodeling needs if any
E. ADA compliance
F. Availability of convenient parking
G. Availability date
H. Other amenities

Every effort was taken to ensure a fair and equitable selection process. Initially, five properties were selected by the PCSD senior staff to visit.  As additional information was presented by some of the agent/owners of the properties, it was necessary to request supplemental information from the other contending properties so that an equal comparison of attributes could be made.  The City Information Technology Division provided comparative costs on extending or leasing fiber optics at the proposed locations.  Equipped with the information provided in the original submittal and the supplemental request for information, all nine properties were scored according to the evaluation criteria listed in the RFP.  The two properties that scored the highest also had the same score.  Because of that, both properties were further evaluated for more detailed cost information.  An architect was employed to estimate the cost of tenant improvements in both locations and the IT Department provided a more detailed inspection report of the two locations.  The tenant improvement costs and the configuration of the existing computer and phone network were the main deciding factors for selecting between the two highest ranked properties.

The Planning and Community Services Department advertised for 12,500 square feet of office space.  Many of the proposals were for space that had yet to be configured as office space.  The cost of bringing these buildings up to code and to meet PCSD needs is prohibitive.  Also, the time required for remodeling would extend the availability date beyond what would be acceptable.  The PCSD considered the possibility of purchasing the property which would go further to justify the extensive remodeling required.  The City, however, is not in the position to purchase properties of this magnitude without having a reasonable plan for future City facilities.  For that reason, the properties that required extensive remodeling and/or tenant improvements were not considered in the final selection.  The two finalist were essentially move-in ready office space with monthly utility, janitorial and maintenance costs included in the proposed cost/square foot.

Three of the four Divisions in the Planning and Community Services Department rely on property tax and/or fees for operating revenue.  The Community Development Division relies on federal funding that is capped for administrative activities, including rent.  None of the sites considered were affordable to the Community Development Division without subsidies from the other Divisions or the General Fund.  For that reason, the Community Development Division is seeking separate office space at a price or other arrangement that the Division can afford.  The other three Divisions have historically paid between $90,000 and $135,000 annually in rent.  The recommended office space is proposed to cost up to $124,650 the first year.  The final lease terms have yet to be agreed to, but are estimated to be less than the proposed figure.  This cost does not include space for the Community Development Division.

Staff is recommending that Council approve the selection of the Miller Building located at 2825 3rd Ave. North for the new location of the Code Enforcement, Planning and Building Division offices.