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MINUTES

STATE BUILDING COMMISSION Executive Subcommittee January 22, 2018

The State Building Commission Executive Subcommittee met this day at 11:00 a.m. in House Hearing Room II of the Cordell Hull State Office Building, Nashville, Tennessee, with the following members and Departments present. Commissioner Martin called the meeting to order at 11:00 a.m. and requested action on the following matters as presented by State Architect Ann McGauran.

MEMBERS PRESENT

David Lillard, State Treasurer Tre Hargett, Secretary of State Justin Wilson, Comptroller of the Treasury Larry Martin, Commissioner, Department of Finance and Administration

ORGANIZATION

? Department of General Services ? Tennessee Board of Regents ? Department of Environment & Conservation ? West Tennessee River Basin Authority ? State Building Commission

PRESENTER

John Hull Dick Tracy Bill Avant Bill Avant Ann McGauran

SBC Executive Subcommittee ? January 22, 2018

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CONSENT AGENDA

Approved the following real property transactions which have been reviewed and recommended for approval by Subcommittee staff:

A.

Agency:

Transaction:

Provision(s):

Department of General Services ? Anderson County Acquisition ? Fee (Gift) Waiver of advertisement and appraisals

B.

Agency:

Transaction:

Provision(s):

Department of General Services ? Anderson County Disposal ? Lease (Land) Waiver of advertisement and appraisals

C. Agency: Transaction: Provision(s):

Department of General Services ? Cocke County Disposal ? Fee (with Right to Hire a Broker) n/a

D. Agency: Transaction: Provision(s):

Department of General Services ? Bedford County Disposal ? Fee (with Right to Hire a Broker) n/a

E.

Agency:

Transaction:

Provision(s):

Department of General Services ? Knox County Acquisition ? Lease (Space) n/a

SBC Executive Subcommittee ? January 22, 2018

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DEPARTMENT OF GENERAL SERVICES

Disposal ? Fee (with Right to Hire a Broker)

Requested Action:

Approval to issue a Request for Qualifications for a real estate brokerage firm to assist with the disposal

Transaction Description: ? Location:

? Estimated Sale Price: ? Estimated Broker Cost:

Transaction No. 15-06-004-BN

Citizens Plaza Davidson County- 0.57 +/- acres ? 400 Deaderick Street, Nashville, TN Fair Market Value To be negotiated

Comment:

This request is to hire a real estate brokerage firm, experienced in the disposal of commercial/office properties, to assist the State with the sealed bid sale of the property. Use of a real estate brokerage firm is requested to effectively market this large office building.

Date of Last Transfer: Previous Owner: Original Cost to State: Square Footage Improvements:

July 1, 1986 Citizens Plaza, LTD $25,360,630 277,000

Previous Action:

12/18/2017 ESC approved disposal in fee.

Minutes:

01/22/2018

Approved issuing a Request for Qualifications for a real estate brokerage firm to assist with the disposal.

SBC Executive Subcommittee ? January 22, 2018

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DEPARTMENT OF GENERAL SERVICES

Acquisition ? Lease (Space)

Requested Action:

Approval of a lease

Transaction Description: ? Proposed Lease o Location: o Landlord: o Term: o Area / Costs:

? Current Lease o Location 1: o Landlord: o Term: o Area / Costs:

Transaction No. 17-09-901-SH

Knox County ? 724 Dutch Valley Drive, Knoxville, TN

Key Holdings, LLC

5 years/ two one year renewal options

4,500 Square Feet First Year Contract Rent: Average Annual Contract Rent Estimated Annual Utility Cost Estimated Annual Janitorial Cost Total Annual Effective Cost

$59,625.00 64,125.00 7,875.00 4,950.00 $76,950.00

Knox County ? 4420 Whittle Springs Road, Suite A, Knoxville, TN

Michael Cohen

September 1, 2017 to August 31, 2020

3,602 Square Feet

Annual Contract Rent

$40,000.00

Estimated Utilities Cost

6,303.50

Estimated Janitorial Cost

3,962.20

Total Annual Effective Cost

$50,265.70

$13.25/sf 14.25/sf 1.75/sf 1.10/sf $17.10/sf

$11.11/sf 1.75/sf 1.10/sf

$13.96/sf

o Location 2: o Landlord: o Term: o Area / Costs:

Washington County - 508 Princeton Road, Johnson City, TN

SHARA, LLC

(5 years) July 1, 2015 to June 30, 2020

1,650 Square Feet

Annual Contract Rent

$24,948.00

Estimated Utilities Cost

2,887.50

Estimated Janitorial Cost

1,815.00

Total Annual Effective Cost

$29,650.50

$15.12/sf 1.75/sf 1.10/sf

$17.97/sf

? Source of Funding: ? Procurement Method: ? FRF Rate:

FRF Operating Funds LPR on template $18.00

Comment:

This lease will provide office space for the Alcoholic Beverage Commission. The leases at the current locations will be terminated when the new location is available, anticipated to be the first or second quarter of 2019. Evidence storage will be regionalized requiring this new lease with increased square footage in Knoxville.

Rent will increases $.50 in each year. The renewal option cost is $15.00 /sf for each of the 2 renewal options.

SBC Executive Subcommittee ? January 22, 2018

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Minutes:

Tenant may terminate this Lease after the 24th month any time by giving written notice to Landlord at least 120 days prior to the date the termination becomes effective with payment of a termination fee.

01/22/2018 Approved a lease.

SBC Executive Subcommittee ? January 22, 2018

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