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10-16-2023 Closed Session Meeting Minutes BOC October 16, 2023 Closed Session #1 Page 1 of 2 Person County Board of Commissioners Minutes of a Closed Session DATE: October 16, 2023 MEMBERS OF BOARD OF COMMISSIONERS PRESENT: Chairman Powell, Vice Chairman Sims, Commissioner Puryear, Commissioner Palmer, and Commissioner Thomas OTHERS PRESENT: County Manager, Katherine Cathey, Clerk to the Board, Michele Solomon, County Attorney, Ellis Hankins, and Finance Director, Amy Wehrenberg CLOSED SESSION #1 A motion was made by Commissioner Sims and carried 5-0 to enter into Closed Session #1 at 10:52 a.m. per General Statute 143-318.11(a)(5) to establish, or to instruct the public body's staff or negotiating agents concerning the position to be taken by or on behalf of the public body in negotiating (i) the price and other material terms of a contract or proposed contract for the acquisition of real property by purchase, option, exchange, or lease; or (ii) the amount of compensation and other material terms of an employment contract or proposed employment contract with the following individuals permitted to attend: County Manager Katherine Cathey, Clerk to the Board Michele Solomon, County Attorney Ellis Hankins, General Services Director Ray Foushee, and Finance Director Amy Wehrenberg. Chairman Powell called the Closed Session #1 to order at 10:56 a.m. County Manager Katherine Cathey advised the MOU is pending Brixmor’s signature if the Board chooses to move forward with the purchase of the Human Services Building. She advised the MOU is a non-binding agreement with Brixmor, and the County needed to make sure they are comfortable with the provisions that have been included at this point; which are subject to change, based on any other appraisals completed by either party, by EH studies, structural analysis, or anything else deemed necessary. Cathey stated she received a copy of the ninety- six page appraisal this morning completed by Laura Ess with Wayne Ross Appraisals. She stated she spoke briefly with Laura Ess to go over appraisal, and has a better understanding of the appraisal after speaking with Ess. Cathey advised the appraisal came in at $6.07M, and that Ess used five comparable sales from Virginia Beach to the Triangle. She stated Ess had a hard time identifying comparable sales recently and was able to identify office buildings to use as comparables. Cathey advised Ess did not use the sale of the Hope Valley Shopping Center in Durham, which Durham County purchased for their elections office, as a comparable as Durham County purchased the entire shopping center, which still included anchor tenants. Cathey advised Ess did not see that as a direct comparison to what Person County would be purchasing; which is only the County’s part of the shopping center. October 16, 2023 Closed Session #1 Page 2 of 2 Cathey advised as a basis of analysis, the current lease was used and not the proposed lease, as Ess deemed the present value of the current lease to be the most valuable. Cathey advised Ess does not feel that renewing the lease under the terms proposed, would be favorable to the County. Cathey advised, Ess stated the office space vacancy rate is high in the Triangle, and does not feel that Brixmor would be able to fill the space if the County vacates the property. Cathey stated she shared the appraisal with Ray Foushee, Amy Wehrenberg, and Doug Brock of Newmark. Cathey stated that she received feedback from Brock and he indicated, based on his analysis, he would lean towards using the proposed lease versus the current lease in doing an appraisal, as it would increase the value, by his estimation to be $10-$11M. Brock also advised that he feels the Kroger Shopping Center in Durham would have been used as a comparison as well as other retail sales in our market. Cathey stated it is in the best interest of the County, financially and meets timeline, to move forward with the purchase of the current building. She stated Brixmor is currently updating the carpet and painting thorough out the building. Chairman Powell had concerns about making a decision based on a proposed lease and would rather look at the present lease. Commissioner Puryear had concerns in reference to Doug Newmark and the commission that he is seeking. Cathey advised that if the County paid Brixmor the appraisal price of $6.07M, Brock’s commission would be $243K, which is 4%. She stated she feels Brock should be compensated, as he added value, but also complicated things. She advised that his commission is contingent upon the sale of the building. She stated Brixmor does not want to have any interaction with Brock. Vice Chairman Sims had concerns that Brixmor wants no contact with Brock and only deal with the County. County Attorney Ellis Hankins advised that Brixmor has no obligation to speak to anyone. Cathey stated the tax value is $8.5M for the two parcels and structures. Hankins advised that Cathey needed to speak with the Person County Tax Collector, in reference to the difference between the tax value and the appraised value of the building. Cathey advised that she would share the appraisal with the Tax Collector. Cathey advised the current lease would expire in August 2025. Cathey advised that if the County chooses not to renew lease, and not to purchase the current building, and decided to construct a new building, it would be possibly early 2026 before completion. Finance Director Amy Wehrenberg stated that you are looking at a potential tax increase with this option. Wehrenberg advised that if the County chooses to purchase the current building there are some tangible benefits such as expansion. It was the consensus of the Board to move forward with purchase of the building versus constructing a new building and to update the MOU with Brixmor to reflect $6.07M with no commission to Brock, as the County would pay that separately. A motion was made by Commissioner Puryear and carried 5-0 to return to open session at 11:34 a.m. ADJOURNMENT: A motion was made by Commissioner Sims and carried 5-0 to adjourn the meeting at 11:34 a.m.