County to pursue idea of consolidated office building

March 15, 2012

Steve Joseph, head of Joseph Enterprises, discusses the Inyo County Consolidated Office project with the Board of Supervisors with partner Scott Piercey (r) and consultant Allan Kotin (center). Photo by Mike Gervais

County leaders voted Tuesday to move forward with a non-binding agreement that will allow them to pursue construction of a new consolidated office building in Bishop.
The agreement the Board of Supervisors signed with Joseph Enterprises Tuesday is a term sheet that outlines all necessary steps and a time line that must be completed before the county can build a new, 4,200 square-foot consolidated office facility.
The term sheet is non-binding, which means the county has the right and ability to stop negotiations up until the lease agreement for the new building is signed.
With the term sheet in place, Inyo County and Joseph Enterprises can begin working on a site plan and design for the property, located just north of Bishop on U.S. 6, and work on preliminary specifications and costs for the project.
County staff will also conduct a thorough space needs analysis and develop a final concept plan that will determine what departments will be located in the new facility.
Until the final cost and site plans are approved, and the lease is executed, Inyo County reserves the right to back out of the agreement.
Before signing the term sheet this week, the Board of Supervisors reviewed an analysis of potential savings, to see if there is any chance that the new consolidated office would save the taxpayers money.
Allan Kotin, of ADK&A, which conducted the cost savings analysis, said the county is currently paying $330,000 per year in leases for several office buildings in Bishop. Due to increasing rent prices and tenant improvements, Kotin said over the next 20-50 years, the amount of money the county spends on its leases will skyrocket.
Though the consolidated office building comes with a heavy price tag, an estimated $14 million, Kotin said in the long-run, a new building will be cost effective.
“The benefits of this are substantial,” Kotin said. “Why do this now? For one, for construction and financing, it’s a good time. And secondly, government is the ultimate long-term investment, it’s almost immortal and this will get you out from under inflation.”
Kotin also said that, because the county will own the property and eventually the building, it will not be paying taxes on its office space.
County Administrative Officer Kevin Carunchio said the goal is to have a long-term, 20-year lease with the option of buying the building for $1 when it expires.
Under the preliminary agreement, Joseph Enterprises will be responsible for designing the building and construction.
In exchange, the county will trade 5.69 acres it owns south of Bishop on U.S. 395 for the three-acre parcel owned by Joseph Enterprises.
Under the preliminary agreement, the county will invest $2 million in initial rent, pay $600,000 a year for rent, with three additional payments of $250,000.
“We haven’t spent a long time fine-tuning these numbers,” Kotin said, pointing out that final numbers will be established once the county knows exactly how large the building will be and what departments will be housed there.
While four board members have committed to continue looking in to the construction of a new office building, Fifth District Supervisor Richard Cervantes and some residents have voiced their objections, saying the county should not put itself into debt.
“The defining issue of America today is massive amounts of public debt,” Cervantes said. “From the White House to the State House, we are drowning in a sea of red ink.”
Cervantes also said the county has not adequately explored alternative locations and costs for the proposed project.
“My constituents in Lone Pine, Keeler, Cartago, Olancha, Pearsonville, Darwin, Stovepipe Wells, Homewood Canyon, Death Valley, Tecopa, Shoshone, Charleston View and Sandy Valley will be forced to pay for something they will never use,” he said. “This county does not have the money and we are facing declining revenues. No time is a good time to go into debt, and to add to the taxpayers’ burden under these conditions, I believe, would be fiscally irresponsible.”
Russ Aldridge, local business owner, board member of the Owens Valley Contractor and Vendors Association and candidate for District 2 Supervisor, said he would like to see the county consolidate its offices, but is not convinced that now is the time to take on the debt.
“If the county can’t afford it, what’s going to happen?” Aldridge asked. “Talk to the people. Find out what the people want. None of us want higher taxes.”
Carunchio said he does not see the county raising taxes to cover the cost of the new building and believes that, through unfilled positions within local departments, Inyo could save enough money to keep business going as usual and make the necessary payments on the building, if the county chooses to continue its agreement with Joseph Enterprises.
Dan Stone, president of the OVCVA, said he supports the project. “I’m all about business and putting people back to work, but go conservatively,” Stone said. “I’d like to see this building go in. I’d like to see solar go in” to help reduce utility costs.
“The time is certainly right, right now,” Second District Supervisor Susan Cash said. “We can have control over our own destiny, and we can very carefully walk down this road before we have to write a check.”
Cash said that the project may be feasible because Joseph Enterprises has agreed to handle site planning and other preliminary work that would generally cost the county money.
If the plans don’t turn out the way county leaders envision them, they can always back out and continue paying the leases the county currently holds.