CC Resolution No. 1608 59
RESOLUTION NO. 1608
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, APPROVING THE PURCHASE OF AN OFFICE BUILDING BY THE
HARRIS COUNTY APPRAISAL DISTRICT; CONTAINING A SAVINGS
CLAUSE; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
WHEREAS, Section 6.05(a) of the Texas Tax Code authorizes the board of directors of
an appraisal district to purchase or lease real property and to construct improvements as
necessary to establish and operate the appraisal office; and
WHEREAS, Section 6.05(b) of the Texas Tax Code provides that the acquisition of real
property or the construction or rc ,,7ation of a building or other improvement by an appraisal
district must be approved by the of three-fourths of the taxing units entitled to
vote on the appointment of appra �`�C'�� / -^d
WHEREAS, the City o' I/ tled to vote on the appointment of
members of the board of direct .isal District (HCAD); and
WHEREAS, at its rr September 10, 2003, the board of
directors authorized HCAD's rea, thief appraiser to negotiate for the
acquisition of an office building located at 15u,., _ est Freeway, Houston, Harris County,
Texas ("the Building") and authorized the chief appraiser to engage an architect for planning,
design and construction necessary for relocation of the appraisal office to the Building; and
WHEREAS, if the negotiations are successful, it is anticipated that the board of directors
of HCAD will adopt a resolution proposing acquisition of the Building by a lease-purchase
agreement; and
WHEREAS, the City Council of the City of Baytown believes that acquisition of the
Building is in the best interest of HCAD and the taxing units it serves; NOW THEREFORE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
Section 1: That the City Council of the City of Baytown, Texas, hereby approves of
the proposal by the board of directors of the Harris County Appraisal District to acquire and
improve the Building located at 13013 Northwest Freeway, Houston, Harris County, Texas, if
made by resolution,be, and it is hereby, in all things approved.
Section 2: This resolution shall take effect immediately from and after its passage by
the City Council of the City of Baytown, Texas.
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INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the
City of Baytown, this the 9th day of October, 2003.
" e &'
PETE C. A FL �-
ARO
ATTEST: /
GARY k . SMITH, City Clerk
APPROVED AS TO FORM:
NACIO RAMIREZ, City Attorney
F:\Je=ene\My Documents\Council\03-04\0ctober 1 st\APProveHCAD2LeasePurchaseBuilding.doc
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Ml
Mailing Address., Harris County Appraisal District
P.O.Box 920975 Houston, TX 77292-0975 2800 North h L West, Houston, Texas
Telephone:713-812-5800
Information Center. 713-957-7800
E-Mail: jrobinson@hcad.org
Office of Chief Appraiser
September 24,2003
Presiding Officers and Members of the Governing Bodies
of Taxing Units in Hams County
Ladies & Gentlemen:
I am writing in behalf of the appraisal district's board of directors to ask that your
governing body adopt a resolution authorizing the Hams County Appraisal District to
proceed with the lease-purchase of a headquarters building. We anticipate a significant
annual savings in our annual operating expense if we are able to relocate from our present
leased space into the lease-purchased building at 13013 Northwest Freeway in Houston.
Section 6.051, Tax Code, provides that the acquisition of real property by an appraisal
district must be approved by the governing bodies of three-fourths of the taxing units
entitled to vote on the appointment of board members. An entity that fails to indicate
approval is considered to be a no vote. The law contains a strict time frame in which
taxing unit approval can occur, and must take place within 30 days after the HCAD board
of director's formally approves the proposal at its October 15, 2003 meeting.
Attached to this letter is an outline of the lease-purchase proposal and sample copies of
resolutions authorizing the appraisal district to move forward with the transaction.
Resolution A is designed to be used if your approval meeting occurs before HCAD's
October 15 meeting. Resolution B is designed to be used if the approval meeting occurs
after October 15.
In addition to saving money, this transaction will enable us to better serve the citizens of
Harris County. We urge you to place the approval item on your agenda and act favorably
on it no later than 30 days after October 15.
Please do not hesitate to contact me at 713-957-5291 if you have questions.
Sincerely,
Jim Robinson
Chief Appraiser
Building acquisition aver WLrdav4
Harris County Appraisal District
Building Lease-Purchase Proposal
The Harris County Appraisal District is negotiating for the lease-purchase of a new
headquarters building. The district currently leases approximately 180,000 square feet in
the Brookhollow I office building located at the intersection of Loop 610 and US 290.
The district also leases approximately 14,000 square feet of warehouse space in two
different locations in the county. The proposed building is located at 13013 Northwest
Freeway, close to the intersection of Hollister and Northwest Freeway(US 290). To
complete the purchase, we will need formal approval from 3/4 of the governing bodies of
the taxing units entitled to vote on selection of HCAD's board of directors.
Why we need new space
HCAD's lease expires in April, 2007. The current building is no longer suitable for the
district's operations,primarily because we are handling many more visitors than were
anticipated at the time the building was leased(and far more visitors than the building is
designed to handle). The district's board of directors believes that,with interest rates at
historic lows and large inventories of commercial office space available, it is
economically advantageous to proceed with purchasing a building at this time.
What has been done to date
In June of this year,the district issued a request for proposals to fiunish new office space, _
either through a build-to-suit arrangement or through refurbishing an existing building.
The district required at least 190,000 square feet of office space, located in an area
bounded on the West and North by the Sam Houston Tollway, on the East by Interstate
45, and on the South by Highway 59, with the principal notion of keeping the district's
headquarters somewhere near the center of the county. 13 proposals were received. On
September 10, 2003, HCAD's board voted to authorize negotiations to purchase a 7 story,
196,000 square foot building located at 13013 Northwest Freeway, close to the
intersection of Hollister and US 290. The building was formerly the corporate
headquarters of the Cameron Iron Company. This building represents the lowest and best
proposal, with a net rental rate of$11.61 per square foot that was$3 per square foot
below the next lowest proposal. Current lease rates for this type of space range from$10
to $11 per square foot net,with no equity ownership.
The proposal
Under the proposal, the district will acquire the building through a lease purchase
arrangement. The owner will refurbish the building to the district's specifications,
including replacing all window glass, adding an additional level to the parking garage,
installing an additional elevator, building out the interior, and firnishing the first and
second floors. The proposal also requires the owner to buy out or assume the district's
remaining lease obligations at the Brookhollow building. The district's lease payment
will be approximately$2.3 million a year, and we will be able to purchase the property
for $100 at the end ofthe lease term In comparison, the district's 2004 office space
budget is $3.6 million per year including a $6.00 per square foot expense stop for the
Brookhollow building, and approximately $80,000 for warehouse space. Our projections
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are that the total annual cost of the new building will be considerably less than the
amount currently budgeted for space. A table illustrating the comparison is shown
below.
Existing space 13013 NW
2004 Budget Freeway
Office Space $ 3,653,599.00 $ 2,275,644.00
Electricity and Water $ 112,900.00 $ 278,320.00
Building and Fixture Maintenance $ 85,000.00 $ 638,960.00
Casualty & Liability Insurance $ 65,000.00 $ 62,720.00
Reserve fund for replacements $ 196,000.00
Total $ 3,916,499.00 $ 3,451,644.00
Note: Under the Brookhollow lease, the district is only responsible for utility
and expense costs in excess of$6.00 per square foot.
Advantages of this facility
In addition to lower overall cost, the primary advantages of the 13013 Northwest
Freeway building will be:
• We will be able to consolidate nearly all of our hearings and public information
facilities on the first floor. Currently, in peak hearing season,we have property
owners and consultants on six different floors, which is a logistical and security
nightmare. The new building will be much more customer friendly.
• The district will own the building at the end of the lease.
• The location, approximately 3 miles from the current facility, fronts directly on a
major highway and is easily accessible from all parts of the county.
• The building will provide room for expansion, should it be necessary.
• The building will be fully ADA compliant. The current facilities are not.
• Separate warehouse space will not be needed.
• The lower cost of ownership, as opposed to the present lease arrangement, will
reduce the cost of appraisal district operations and result in a savings to each
participating taxing unit.
What the jurisdictions need to do
Section 6.051, Tax Code, provides that the acquisition of real property by an appraisal
district must be approved by the governing bodies of three-fourths of the taxing units
entitled to vote on the appointment of board members. An entity that fails to indicate
approval is considered to be a no vote.
Time is also of the essence. The HCAD board plans to formally approve the proposal at
its October 15, 2003 meeting. After the approval, the chief appraiser will send you
formal notification of the purchase. Your governing body may approve the purchase at
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any time between now and the 301h day after the date you receive the formal notification,
but it must act before that 30`h day, and must file its resolution with the chief appraiser on
or before the 10`h day after the governing body votes. Failure to act within these time
frames is considered a"no"vote.
We have enclosed two sample resolutions:
Resolution A is designed to be used if your approval meeting occurs before HCAD's
October 15`h meetini. Resolution B is designed to be used if the approval meeting occurs
after the October 15 meeting.
Please call Jim Robinso _Chief Appraiser, at 713-957-5291 if you have questions_or__
need assistance.
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SAMPLE RESOLUTION A
RESOLUTION NO.
RESOLUTION APPROVING PURCHASE OF OFFICE BUILDING BY
HARRIS COUNTY APPRAISAL DISTRICT.
WHEREAS, Section 6.05(a) of the Texas Tax Code authorizes the board of directors of
an appraisal district to purchase or lease real property and to construct improvements as
necessary to establish and operate the appraisal office; and,
WHEREAS, Section 6.05(b) of the Texas Tax Code provides that the acquisition of real
property or the construction or renovation of a building or other improvement by an appraisal
district must be approved by the governing bodies of three-fourths of the taxing units entitled to
vote on the appointment of appraisal district board members; and,
WHEREAS, the (name of taxing unit) is a taxing unit entitled to vote on the
appointment of members of the board of directors of the Harris County Appraisal District
(HCAD); and,
WHEREAS, at its regular monthly meeting held September 10, 2003, the board of
directors authorized HCAD's real estate brokers and chief appraiser to negotiate for the
acquisition of an office building located at 13013 Northwest Freeway, Houston, Harris County,
Texas ("the Building") and authorized the chief appraiser to engage an architect for planning,
design, and construction necessary for relocation of the appraisal office to the Building; and,
WHEREAS, if the negotiations are successful, it is anticipated that the board of directors
of HCAD will adopt a resolution proposing acquisition of the Building by lease-purchase
agreement; and,
WHEREAS, the (title of governing body, e. ., city council) of the (name of
taxing unit) believes that acquisition of the Building is in the best interest of HCAD and the
taxing units it serves; now, therefore,
BE IT RESOLVED BY (title of governing body) OF THE (name of taxing unit)
That the proposal by the board of directors of the Harris County Appraisal District to
acquire and improve the building located at 13013 Northwest Freeway, Houston, Harris County,
Texas,if made by resolution, be, and it is hereby, in all things approved.
PASSED AND APPROVED this day of 2003.
(Title of Presiding Officer, e.g.,Mayor)
ATTEST:
(Title, e.g., City Secretary)
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SAMPLE RESOLUTION B
RESOLUTION NO.
RESOLUTION APPROVING PURCHASE OF OFFICE BUILDING BY
HARRIS COUNTY APPRAISAL DISTRICT.
k # k # k k k #
WHEREAS, Section 6.05(a) of the Texas Tax Code authorizes the board of directors of
an appraisal district to purchase or lease real property and to construct improvements as
necessary to establish and operate the appraisal office; and,
WHEREAS, Section 6.05(b) of the Texas Tax Code provides that the acquisition of real
property or the construction or renovation of a building or other improvement by an appraisal
district must be approved by the governing bodies of three-fourths of the taxing units entitled to
vote on the appointment of appraisal district board members; and,
WHEREAS, the (name of taxing unit) is a taxing unit entitled to vote on the
appointment of members of the board of directors of the Harris County Appraisal District
(HCAD); and,
WHEREAS, at its regular monthly meeting held October 15, 2003, the board of directors
of HCAD adopted Resolution No. proposing acquisition by lease-purchase agreement and
renovation of an office building located at 13013 Northwest Freeway, Houston, Hams County,
Texas (the "Building") for the purpose of establishing and operating the appraisal office therein;
and,
WHEREAS, the board of directors of HCAD has delivered a copy of Resolution No.
to the presiding officer of the governing body of the (name of taxing unit) together
with information showing the costs of other available alternatives to the lease-purchase of the
Building; and,
WHEREAS, the (title of governing body, e.g., city council) of the (name of
taxing unit) believes that acquisition of the Building is in the best interest of HCAD and the
taxing units it serves; now,therefore,
BE IT RESOLVED BY (title of governing body) OF THE (name of taxing unit)
That the proposal by the board of directors of the Harris County Appraisal District to
acquire and improve the building located at 13013 Northwest Freeway, Houston, Harris County,
Texas,be, and it is hereby, in all things approved.
PASSED AND APPROVED this day of 2003.
(Title of Presiding Officer, e.g., Mayor)
ATTEST:
(Title, e.g., City Secretary)
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