Item 5.1 - Poway Sheriff Substation Site Review Dr TRIBUTED
AGENDA REPORT
ADDITIONAL INFORMATION
TO: Honorable Mayor and Members of the City Council
FROM: James L. Bowersox, City Ma~~')~
INITIATED BY: John D. Fitch, Assistant City Manage~'
DATE: February 14, 1995
SUBJECT: Poway Sheriff Substation Site Review
ABSTRACT
At their January 10, 1995 meeting, the City Council reviewed a list of 18
potential sites for the Poway Sheriff Station. At that meeting, it was the
consensus of the majority of the City Council to consider locating the proposed
Poway Sheriff Station on the east end of the Huber Property which is located at
the northeast corner of Bowron Road and Civic Center Drive, and to move a portion
of the affordable housing project that has been planned for that site to the
Western Lumber property. However, the City Council requested that the matter be
referred to the Redevelopment and Housing Advisory Committee and that staff
prepare a drawing that would show the relative amount of area that would be
assigned to each use on the Huber and Western Lumber properties and how many
units would be developed on each location.
A report was prepared regarding this issue for the February 7, 1995 City Council
meeting; however, due to the absence of two of the City Council members, this
item was continued to the February 14, 1995 meeting.
At the February 7, 1995 meeting City Councilmember Rexford requested that
additional information be provided regarding the financial implications of the
City building the Poway Sheriff Station. This report has been prepared to
address City Councilmember Rexford's request for additional information.
BACKGROUND
In May of ]994, the City proposed to the County that the new sheriff station be
located on the Western Lumber site adjacent to the library. The proposal, which
the County agreed to in concept, included the City acquiring 2 acres of the
Western Lumber site from the Redevelopment Agency, the City selling revenue bonds
to cover the cost of land acquisition, design, site preparation, and construction
and the City entering into a long-term lease with the County to rent the
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Agenda Report - Additional Information - Poway Sheriff Station
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facility. Even though the City Council decided not to locate the sheriff station
adjacent to the library on the Western Lumber site, the County indicated a desire
to continue to work with the City in locating and developing a new sheriff
station.
FINDINGS
There are several benefits regarding the City building the Poway Sheriff Station
including the following:
1. The Sheriff Department will be housed in a new facility rather than in
leased space not designed to be a sheriff station.
The County of San Diego, at this time, does not have the financial ability
to build a new station. As a result, if there are no other alternatives
available to the County, it would be their intention to lease existing
commercial space and convert it to be used as a sheriff station. Sites
that have been identified include: Builder's Emporium; the Mega Foods
Building; the Mega Foods (K-Mart) Center; the Von's Store at Pomerado and
Poway Road; and the Von's Center. As indicated in the January 10, 1995
report regarding potential sheriff station sites, none of these sites have
been identified as good sites for a sheriff station.
2. The City, thus the public, would own the building and would be gaining
equity in the building as a result of the County lease instead of a ~rivate
building owner gaining equity in a leased building.
After 32 years the debt would be paid on the building and the building
would be owned in full by the public.
3. The City would have a Police Department facility in the event the City ever
decided to discontinue the contract for law enforcement services with the
County of San Diego.
Whether or not the City continues to contract with the County of San Diego
for law enforcement services there will always be a need for a law
enforcement facility in Poway. In the case of severe economic problems,
the City could be forced to discontinue the subsidies to the Performing
Arts Center or the municipal swimming pool; however, it is not forseeable
that the City would eliminate, or sharply curtail, law enforcement
services.
4. Because of the way the law enforcement contract with the County is
structured, the additional lease cost would be paid by the contact law
enforcement cities of San Diego County of which Poway is one of nine
members and represents only 14.4 percent of the total contract cost for
patrol and traffic units, which is used as the basis for calculating
Poway's share of the total facilities lease cost. As a result, the cost of
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Agenda Report - Additional Information - Poway Sheriff Station
February 14, 1995
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the new Poway Sheriff Station would be averaged with the cost of leasing
the other facilities used by the contract law enforcement cities. In
addition, under the current contract, the County of San Diego would pay 45
percent of the total lease based upon the total number of sheriff deputies
who are assigned to the unincorporated areas of the County that are
assigned to the stations serving contract law enforcement agencies
including the Poway Sheriff Station.
5. Although, due to the current economic conditions, the County could secure
a short-term lease of one of the existing buildings at a rate which would
be less than the debt service on a bond issue to build a new facility. The
cost of converting the building to office use would probably be over
$500,000. Therefore, it would cost the taxpayers more to lease a privately
owned commercial building.
As an example, a short-term lease for one of the existing buildings could
be negotiated for the next couple of years at approximately $0.80 per
square foot; however, once the economic conditions improve the, lease would
be increased to represent the then market rates. In addition, the County
would have to finance over $500,000 in tenant improvements or the rent
would have to would have to be increased to include the cost of the
improvements made to convert the existing buildings so that it could be
used as a sheriff station.
As indicated in the attached financial information that was prepared at the
City's request by Paine Webber in October, 1994, the building would have to be
leased to the County for approximately $1.31 per square foot to cover the debt
service on a 30 year bond issue if the construction costs including land
acquisition totaled $2,500,000. Since it would take approximately two years to
complete the construction of the facility and thus no lease payments would be
paid, the first two years following the issuance of the debt, the debt service
would be paid from a capitalized interest fund.
Based upon the above, the total amount of debt service that would be paid over
the 32-year term of the bonds would be $8,017,218. If, on the other hand, the
County of San Diego was to enter into a lease at $1.00 per square foot, which
would reflect a very low cost lease, the rent that would be paid over the same
32-year period if a 3 percent annual increase was assumed would be approximately
$9,450,498, for a difference of $1,433,270. Although the initial rent would be
$1.00 per square foot, the rent at the end of the 32-year period would be
approximately $2.50 per square foot and would average approximately $1.64 per
square foot over the 32-year term.
Since interest rates have increased following the preparation of the above
information, and the actual costs of construction and land acquisition, depending
on the site that the City Council selects, may be closer to $3,000,000, the above
information may no longer be accurate. However, if the City Council decides to
pursue this option further, the actual costs will be provided to the City Council
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Agenda Report - Additional Information - Poway Sheriff Station
February 14, 1995
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prior to their being committed to any specific action.
SUMMARY
City Build/Own County Build/Own County Lease
Cost over 32
years based
upon the above
assumptions $8,0]7,280 $8,0]7,280 $9,450,498
Average Rent,
per square foot
over 32 years $1.40 $1.40 $1.64
Equity City of Poway County of San Diego Property Owner
In addition to the above costs for the County lease, the County would have to
finance the $500,000 in tenant improvements or the rent would have to be
increased by approximately $0.30 a square foot to offset these costs.
ENVIRONMENTAL REVIEW
The subject matter of this report is exempt from environmental review.
FISCAL IMPACT
This report asks the City Council to provide staff guidance in siting a new
Sheriff Substation in Poway. As such, there is no immediate fiscal impact.
Additional action will be required by the City Council and the fiscal impact of
any recommended action will be reported at that time.
PUBLIC NOTIFICATION AND CORRESPONDENCE
In addition to the normal distribution, a copy of this report was sent to Jerry
Hargarten, Chairman of the Budget Review Committee; Jim Marmack, Captain Poway
Sheriff's Station; John Cross, of the Real Property Division for the County of
San Diego; Tom Tremble, Chairman of the Redevelopment and Housing Advisory
Committee; Joye Davisson, Chairperson of the Library Advisory Committee; Jerry
Long, Chairman of the Poway Road Specific Plan Committee; and Kathy Shawl,
President of the Friends of the Poway Library.
RECOMMENDATION
It is recommended that the City Council:
]. select a site for the proposed Poway Sheriff Station, and
2. indicate whether the City Council would be interested in pursuing an
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Agenda Report - Additional Information - Poway Sheriff Station
February 14, 1995
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agreement with the County of San Diego that would provide for the City acquiring
property, designing and constructing a sheriff station tha-Fwould be leased to the
County at an amount sufficient to cover the City's cost.
JLB/JDF
Attachments:
1. Letter dated October 10, 1994 from PaineWebber regarding Sheriff Station
Financing.
A:\SHERiO1.JDF
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INC. 213 9?2 159& TO 1974~1~55 ~'.~-~2/d3
M~ John D. Fitch
A,~si:a~at Cit?y t~,- ~er ..
C~' of Po~ay
15325 Cw~c C. gm~ Drive
Poway, CA 92064
Re: Sheriff gubst~ion Fin~Cmg
~ John
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Assumptions
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Conclusions
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Attachment 1
Mr. John D. Filch
October 10, 1994
Parc tv, o
ld"yoa ha,..e an5., qUgS'm:ms, please call mc at (213) 972-1714.
SinCerely,
'*rice President
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~'EB ! 4 1995 ITEM 5,/ ~ ~