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08-21-2023 Closed Session Meeting Minutes BOCAugust 21, 2023, Closed Session #1 Page 1 of 3 Person County Board of Commissioners Minutes of a Closed Session DATE: August 21, 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, Brenda Reaves, County Attorney, Ellis Hankins, Clerk in Training Michele Solomon, Assistant Finance Director Tracy Clayton, General Services Director Ray Foushee, Doug Brock, Senior Managing Director, Newmark, Doug Carter, President and Managing Director, DEC Associates, Inc., and Andrew Carter, Director, DEC Associates Inc. CLOSED SESSION #1 A motion was made by Commissioner Puryear and carried 5-0 to enter into Closed Session #1 at 9:24am 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 Brenda Reaves, Clerk in Training Michele Solomon, County Attorney Ellis Hankins, Assistant Finance Director Tracy Clayton, General Services Director Ray Foushee, Doug Brock, Senior Managing Director, Newmark, Doug Carter, President and Managing Director, DEC Associates, Inc. and Andrew Carter, Director, DEC Associates Inc. Chairman Powell called the Closed Session #1 to order at 9:25am. County Manager Katherine Cathey advised that the County’s lease with Brixmor for the Human Services Building will expire in August 2025. Ms. Cathey presented a Memorandum of Understanding (MOU) prepared by Newmark to purchase approximately 8.58 acres of land and improvements located at 355 S Madison Blvd. Roxboro, NC, which currently houses the County’s Human Services. Ms. Cathey indicated that the County has had multiple issues with Brixmor. Staff recommends purchasing only the county’s portion of the shopping center and investing in upgrades to include HVAC & roof repair. Ms. Cathey advised that Brixmor’s purchase price was $8.5 million. Ms. Cathey recommended the MOU purchase price of $8.2 million which includes 150 days as a feasibility period to evaluate the property. Ms. Cathey advised that Phase I would include an Environmental Study at an estimated cost of $3,500, Roofing Study, an appraisal of property estimated to cost $6,000 and a HVAC assessment. Ms. Cathey indicated that the proposed cost for the above studies/assessments would be $10,000- $20,000. August 21, 2023, Closed Session #1 Page 2 of 3 Vice Chairman Sims stated that he is aware of several current issues with the building and that it is in need of renovations. Vice Chairman Sims noted that they are over 150 employees in that building. Vice Chairman Sims stated known issues of mold, water and the HVAC system. County Manager Katherine Cathey advised that the mold issues have been addressed. Ms. Cathey stated that a study would need to be done to look into HVAC cost and repair. Chairman Powell had questions regarding the water line reconfiguration. Ms. Cathey stated that there is a recognized need for a dedicated water line. Commissioner Palmer stated that there have been multiple issues with the water and referenced the water leak last year. Commissioner Palmer stated issues with water drain, backflow preventer, unsure what device it is. Ms. Cathey stated that the water issues from last year were related to the City of Roxboro’s water main line break. Director of General Services, Ray Foushee stated that Brixmor has a private water line that runs from Barden St. to Brixmor property. Mr. Foushee proposes a cutoff at the breezeway or feed the water from Burger King to separate it from the Human Services Building. Commissioner Puryear asked if County Staff has looked into other properties and renovations of others properties such as the old Belk or the Cotton Mill. Director of General Services, Ray Foushee stated that the old Belk location was too small and no quotes on the Cotton Mill but cost factor is prohibitive. Chairman Powell stated the need for outside input for the studies. Chairman Powell indicated a concern for the roof. Director of General Services, Ray Foushee advised that the roof is 18 years old. There are no imminent problems with the roof and it has very little leaks. Mr. Foushee stated that the mold issues were HVAC related. He stated that 95% of the problems with the building are HVAC related. Mr. Foushee advised that he would be seeking an independent contractor to look at HVAC system, as Brixmor staff does not respond in a timely manner. Mr. Foushee stated otherwise, the structure is in good shape. Chairman Powell asked about the parking lot and parking spaces. Director of General Services, Ray Foushee stated that the parking lot would be divided out in a proposal and there are no known issues at this time. Mr. Foushee advised that the parking lot was recently sealed and striped. Newmark Senior Managing Director, Doug Brock stated the existing lease with Brixmor includes a purchase option, which includes the whole site; the recent purchase price includes just the County used portion. Mr. Brock’s suggestion was to provide the MOU to Brixmor and to allow them 10 days to respond. Mr. Brock stated that the County is at a good spot to negotiate. Ms. Cathey stated that she would like to close on the sale, if the County goes this route, in March 2024, therefore saving the County in lease payments. President and Managing Director, DEC Associates, Inc, Doug Carter gave a brief overview and stated that time was of the essence. Mr. Carter recommended purchasing the real property versus new construction, as new construction would require the need to increase taxes by 2 cents and or decrease the County budget. Mr. Carter stated that the operating costs of the existing building were not significantly higher than new construction. Mr. Carter recommended that the County seek a conservative method of financing to amortize the principal as operating costs are comparable. Ms. Cathey advised that the purchase fits in the debt model without a tax increase. Commissioner Puryear asked about future borrowing capacity to which Mr. Carter said that it would be 2030 or beyond to realize more borrowing capacity. Commissioner Puryear strongly recommended that the Board consider putting money down, such as 20%, to lower the impact on the debt model. Mr. Carter confirmed that the County could finance the whole purchase price or any portion thereof. August 21, 2023, Closed Session #1 Page 3 of 3 County Attorney Ellis Hankins advised that this was a much better alternative to solve the issues with the lessor and provide flexibility to evaluate the property with an out if there were unanticipated problems with the property. Mr. Hankins did not recommend the County owning the whole Brixmor property. Vice Chairman Sims recommended the Board pursue the MOU as it will not increase taxes. Ms. Cathey stated she needed the Board’s consent to proceed with the MOU and to authorize use of the undesignated contingency for the studies and assessments. The Board consented to proceed as recommended by staff. A motion was made by Commissioner Puryear and carried 5-0 to return to open session at 10:24am.