July 13, Commissioner Johnson out at 9:10 and returned at 9:11 a.m.

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1 Page 1 of 5 July 13, 1999 The Marion County Board of County Commissioners met in workshop session in Commission chambers at 9:08 a.m. on Tuesday, July 13, 1999 at the Marion County Governmental Complex located in Ocala, Florida. Upon roll call the following members were present: Chairman Parnell Townley, District 3; Vice- Chairman Steve F. Henning, District 5; Commissioner Judy D. Johnson, District 1; Commissioner Larry Cretul, District 2; and Commissioner Randy Harris, District 4. Also present were Clerk David R. Ellspermann, Deputy Clerk Miriam Pauley, Assistant County Attorney Thomas P. MacNamara, Assistant County Administrator Janet Tutt, members of the news media and ten citizens. Commissioners/Municipalities - Chairman Townley announced that the City of Ocala requested the joint meeting scheduled on Tuesday, July 27, 1999 at 2:00 p.m. be changed to Tuesday, August 10, Commissioner Johnson out at 9:10 and returned at 9:11 a.m. The Board rescheduled the joint meeting with the City Council to Tuesday, August 10, 1999 at 2:00 p.m. Contracts & Agreements/Libraries - The Chairman announced that the purpose of the workshop was to present the status of negotiations with the owners of the commercial building located at 2710 East Silver Springs Boulevard for a library site. Assistant County Attorney Tom MacNamara stated that he, Chairman Townley and Dwight Ganoe, were the members of the team involved in negotiating acquisition of the building for a library. He stated Earl Wesson, Tampa, representing the owner, was present. Mr. MacNamara stated that inspections of the building were conducted and that last week he presented a memo, dated July 8, 1999 with a copy of the "Inspection Report Summary" for the Board s review. He stated the inspection period expired on August 1, 1999 and since July 20, 1999 was the last regular meeting, the Board would be asked to make a decision on that date as to whether to proceed with purchase or terminate the agreement by failing to make a $25,000 non-refundable deposit on or before Monday, August 2, Mr. MacNamara stated that Kmart was the lessee under an existing Lease, with a term ending July 31, 2001 with four five-year renewal options through July 31, He stated the annual rent was $311,359 payable in monthly payments of $25, Mr. MacNamara stated that Kmart was responsible for all taxes, all maintenance and repair costs, and insurance. He stated the Lease allowed Kmart to sublease the building, but would not relieve Kmart of its obligations. Mr. MacNamara stated that Kmart had two subleases, one with Kash N Karry and one with Scotty s. He stated Scotty s occupied a portion of the building, but indicated it would move if the County paid all moving expenses. Mr. MacNamara stated that Kash N Karry would terminate the sublease, pay the present value of the remaining lease payments, approximately $300,000, and contribute $100,000 for roof repairs. He stated that three roof repair estimates were obtained by Kash N Karry, ranging from $100,000 to $150,000. Mr. MacNamara submitted copies of the estimates received from Barbara K. Mitchell, Kash N Karry, in a Fax Memo, dated July 12, He noted that Ms. Mitchell advised that Kash N Karry agreed to terminate the sublease at the East Silver Springs Boulevard location for the amount of $400,000, if the following conditions were met:

2 Page 2 of 5 The County purchases the property. The County assumes the Kmart lease on the property. Subject to execution of a mutually agreeable Termination Agreement with Kash N Karry. Mr. MacNamara noted that if the above conditions were met, Ms. Mitchell indicated Kash N Karry would move forward with termination of its sublease. Mr. MacNamara stated a roof inspection of Kash N Karry and Scotty s conducted by Roger M. Staley, Consolidated Professional Services, Ocala, the County s consultant, indicated the cost estimate for repairs would be much higher, due to the need to remove and replace wet materials before re-roofing. Mr. MacNamara stated there was a problem since Kmart was not willing to sign a Lease Amendment and assign its interest in the Lease to the County, which would make the County a subtenant, and deal with Kash N Karry. Even with this problem, Mr. MacNamara stated he considered this to be a beneficial deal for the County and recommended proceeding with acquisition. In response to inquiry by Commissioner Harris, Mr. MacNamara reviewed the report received from Mr. Staley, indicating a total cost estimate for repairs to be $370,000. In response to inquiry by Commissioner Johnson, Mr. MacNamara stated there was no proposal to re-design the roof. He stated the air-conditioner units on the roof were not properly installed and Mr. Staley indicated the units should be removed if the County was not going to use them. Commissioner Harris pointed out the following portion of the memo dated, July 8, 1999, relating to deferred maintenance cost: The appraisal by Albright and Associates (dated Nov. 98) estimated deferred maintenance of the KNK Food portion to be $14.50/SF or $817, without the cost of roof repair. Mr. MacNamara stated that no estimates were obtained for repairs to the building, other than from the roofing consultant. In response to inquiry by Commissioner Cretul, Mr. MacNamara stated that Albright and Associates considered the re-roof cost when determining the appraised value of the building. Earl Wesson, a Broker with Commercial Corners Inc., Tampa, representing Kash N Karry in Florida, stated he had been involved with the structured deal with the owners to sell the entire property to the County, which would allow the County to occupy the Kash N Karry portion of the building immediately and in the future to occupy the Kmart portion leased to Scotty s. He stated that Kmart was willing to assign its interest to the County in the Scotty s portion of the Lease. Mr. Wesson stated the negotiated price of $3.2 million was a good price, noting a new building could not be constructed for that amount. He stated that $190,000 rent was paid each year by Scotty s. Mr. Wesson stated the structure of the building was good and that he was aware some cosmetic improvements were needed inside the building. He stated the Inspection Report showed that the County would be getting a good deal and the price was fair for a 54,000 square foot building. In response to inquiry by Commissioner Henning, Mr. Wesson estimated new construction cost to be $45 a square foot, which did not include paving a parking lot. Mr. MacNamara stated the parcel contained thirteen acres of land. He stated that Kmart would be foregoing revenues they have been

3 Page 3 of 5 collecting if the County proceeded with the purchase. Mr. Wesson stated the owners were not responsible for building maintenance and indicated that Kmart was responsible for roof maintenance and repairs. He stated the Lease required the roof to be maintained and not leaking, noting that Kash N Karry agreed to pay $400,000 to the County. Chairman Townley suggested that the negotiations with Kash N Karry could go further as to the $400,000 amount, since it was not a fixed amount. Commissioner Johnson stated the County could continue to collect rent until 2001 from Scotty s. Mr. MacNamara pointed out that in the memo received from Ms. Mitchell, she indicated the top offer from Kash N Karry was $400,000. Chairman Townley stated the amount of $400,000 had not yet been accepted by the County. In response to inquiry by Commissioner Harris, Mr. Wesson advised that the total building size was 112,700 square feet. Commissioner Harris stated the report received by the Board indicated the building was 110,350 square feet. He requested the actual cost to repair the building. Commissioner Johnson stated the cost to bring the building up to library standards should not be considered as part of the purchase price. She commented on the site s convenient location to the Governmental Complex, the opportunity to acquire additional space, as well as the ability to generate an additional revenue source from the Scotty s Lease. Commissioner Johnson stated there was a critical need for additional space for the main library. Commissioner Harris stated he was concerned with the actual costs involved with building a turn-key library facility. In response to inquiry by Commissioner Henning, Mr. Wesson stated the Kash N Karry portion of the building was closed in May He advised there were no pending offers to purchase the building, but noted offers to lease the building for offices had been received. Mr. MacNamara reminded the Board that $3.2 million was the negotiated purchase price. He stated the cost of improvements had not been determined since a design professional for the library had not been hired. Chairman Townley questioned whether $90 to $100 a square foot was a reasonable cost for constructing a new library, containing 50,000 square feet. Mr. Race estimated that $90 to $100 a square foot would be a reasonable cost. Library Director Julia Sieg concurred. Chairman Townley stated that based on those estimates, a new building could not be constructed for less than $5 million, and would not include the purchase of the land. Commissioner Harris stated there would be a greater savings to construct a new building than renovating an existing building. Commissioner Johnson stated the purchase would provide an additional 54,000 square feet of office space, parking for the Veterans Park and other multi-functional uses of the site. Commissioner Cretul stated other issues should be considered before making a decision on the purchase price. He noted a letter, dated June 3, 1999, addressed to Randy Gunn, Kash N Karry, from Jeffrey M. Poole, Kmart, stated the following: "that the condition of the premises was deplorable". The letter indicated that not only did Kash N Karry not put on a new roof, but allowed the physical premises to deteriorate over the years. Commissioner Cretul stated the condition of the roof and interior, which would cost approximately $275,000 to repair, should be used as a negotiating factor. He suggested the team go back and negotiate down to $2.9 million. Chairman Townley stated that he was aware that further negotiations may be needed before closing. Mr. Wesson noted the owners would earn $312,000 rent a year for another ten years and he did not anticipate a reduction in the negotiated $3.2 million amount. Chairman Townley stated that it appeared that Kmart was in jeopardy under the conditions of the lease with the condition of the roof. He stated that Scotty s would continue its existing Lease and

4 Page 4 of 5 make payments. In response to inquiry by Commissioner Henning, Mr. MacNamara stated he was aware that there were potholes in back of the building, which were recently repaired, but he was not aware of any Code violations to the structure. Chairman Townley stated the negotiating team looked at many other locations which were unsuitable. He stated the team was satisfied with the current deal. Chairman Townley stated that he was willing to try to negotiate a $275,000 reduction. Ms. Tutt presented and commented on a hand-out entitled "Library Main Branch Renovation/Construction Estimates May, 1999". She stated the cost estimates did not include Scotty s portion of the building. Ms. Tutt stated she considered that the County would be getting Scotty s portion of the building at no additional cost. Commissioner Henning stated there was the potential available for additional office space after the Lease expired on Scotty s portion of the building. In response to inquiry by Commissioner Henning, Mr. Ellspermann presented a memo, dated April 30, 1999, from Finance Director Garri, showing Funding Available for a Library Site. He noted the memo indicated the status of accounts, showing that $2,725,242 was available in the General Fund to purchase a library site. Chairman Townley stated that during a budget workshop yesterday, the Board agreed to transfer $122,000 for wellfield acquisition from the General Fund to the Library for land acquisition, which increased the total funding available to purchase a library site to $2.85 million. Commissioner Harris stated he needed a comparison of all costs before making a decision on the purchase. He stated the Board should not spend all funds available for the purchase and then have to bond for other capital needs. In response to inquiry by Commissioner Henning, Mr. Race advised that an engineering study, which cost $8,000, was the only study that he was aware of that had been done on the site. Ms. Tutt stated that unless an architect was hired, staff could not determine all applicable costs. After further discussion regarding the cost of an architect, Mr. Race estimated that a cost comparison study as to repairs to the building could probably be done for $10,000 or less. Commissioner Harris stated he wanted the actual cost for a turn-key library operation at the Kash N Karry building. Commissioner Cretul stated that Mr. Race should obtain the information from an architect and the Board should direct him to contact an architect. Chairman Townley reminded the Board that a final decision on acquisition of the building had to be made by August 1, Commissioner Henning was reminded that the Board needed to make the following four capital expenditures during the next budget year: Jail, Library, Judicial Center and Southeastern Livestock Pavilion. Commissioner Johnson noted the State Attorney had requested additional space within three years. There being no further business to come before the Board, the meeting thereupon adjourned at 10:55 a.m. Parnell Townley, Chairman Attest:

5 Page 5 of 5 David R. Ellspermann, Clerk Meeting minutes adopted by Board of County Commissioners on August 3, 1999.