City to cover $80,000 in security upgrades at South Office Building

Suzanne Bonamici, the U.S. representative for Oregon’s 1st Congressional District, has chosen The Round at Beaverton Central as the location for her Oregon office.

Her landlord? The city of Beaverton.

With the City Council still pondering uses for the South Office Building, which the city purchased in April, the prominent prospective tenant agreed to lease suite 220 on the second floor at a rate of $5,000 a month. The council approved an agreement for the city to provide approximately $76,500 in tenant-required improvements to the space at 12725 S.W. Millikan Way.

The two-year lease is contingent on the congresswoman’s re-election in November for her second term beginning in 2013. To protect the city’s investment, the agreement calls for automatic renewals over a six-year period, said Don Mazziotti, the city’s director of economic and community development.

Following a lengthy discussion at its Tuesday night meeting, the council unanimously approved the lease agreement, which authorizes no more than $80,000 from the contingency category of the city’s General Fund to be applied to renovating the space. The upgrades would include federal Homeland Security measures related to congressional offices including bulletproof glass, a safe room with an alternate ventilation system, secure interior and exterior doors and special alarm systems.

Mazziotti, who played a key role in lease negotiations, called the situation “very unique.”

“One that’s not likely to rise again,” he said on Wednesday. “She’s the 1st District congresswoman — and there’s only one of ’em. New Homeland Security requirements for congressional offices outside federal property, the security standards are very high, and the improvements necessary to accommodate federal officials are very high.”

The approximately $5,000 monthly rate, based on $21.50 per square foot in a 2,700-square-foot space, “effectively sets the rates for the building,” he noted.

“We assumed $19.50 (per square foot) would be the average rent we could collect. Now we feel confident we can collect at least $21 per square foot. It improves the pro forma, the building’s economic performance, greatly,” he said.

Councilor Betty Bode questioned whether the city fully funding a renovation of space for a fledgling tenant might set an unwanted precedent for future tenants.

“My issue is if you take 100 percent tenant improvements in how we behave with this one, it sets the precedent in how we’re going to do it with the next tenant,” she said Tuesday night. “I think we have to have a policy going forward on what are our parameters.

“It doesn’t have a thing to do with (Bonamici) coming in.”

Noting the federal security standards make the $80,000 tenant-driven improvement “significantly” higher than that of, say, a stock broker, Mazziotti emphasized the city would begin to recoup its investment after the lease’s first 17-and-a-half months.

“We see having Congresswoman Bonamici as a major tenant in the South Office Building to be a significant attractor of other tenants and helps give a unique character to the building itself,” he said.

Bode’s enthusiasm for the tenant is tempered by her interest in establishing a rental policy for the building regardless of the tenants’ profession.

“I just think we can do better business in Beaverton,” she said on Wednesday. “As we look at rental space, maybe we’ll have to have a professional property management company manage the business for The Round.”

Real estate issues aside, the councilor likes knowing a member of Congress will be based in the heart of Beaverton.

“Am I pleased our congressional representative for District 1 is in the city of Beaverton? Yes,” she said. “I support the work of my representative, and I’m glad she’s going to be here.”