FY 2019 STATE PROPERTIES COMMISSION PORTFOLIO REPORT real property real solutions CREDITS: The Fiscal Year 2019 State Properties Commission Portfolio Report is published on behalf of the State Property Officer and Executive Director of the Commission, Marty W. Smith. Written, compiled, and edited by Morgan Smith-Williams, Frank Smith, Andre Elam, Clark Wong, Russell Morgan, Jamiel Jones, and Lindsey Sprewell. LAYOUT AND DESIGN: Sherry Britt, Georgia Building Authority PRINTING: Fast Printing, Inc. 2 FY 2019 TABLE OF CONTENTS 2About the Commission 3Leadership 4Year in Review 5Portfolio Summary 12 Buildings Portfolio 16Space Portfolio 19Lease Portfolio 30Land Portfolio 32Spotlight: CSX Lease 2019 portfolio repor t 1 about the commission The State Properties Commission (SPC) was created in 1964, under Governor Carl Sanders, to aid the State of Georgia with acquiring and disposing of State-owned real property and real property interests. With the creation of the State Property Officer under Governor Sonny Perdue, as well as legislation through the 2005 Georgia General Assembly that realigned the management of the State's capital assets, the State Properties Commission was designated as Georgia's real estate portfolio manager. As such, the Commission's primary focus is to provide accountability in the stewardship of the State's Real Property Assets for the citizens of Georgia. Since 2005, SPC is in charge of increasing the utilization and efficiency of workplace environments, executing lease and land transactions on behalf of State agencies, and maximizing the value of the State's assets. SPC State Properties Commission REAL PROPERTY REAL SOLUTIONS Vision To be the national leader in State real estate portfolio management by exemplifying stewardship, accountability and integrity. Mission To advise, guide and maximize Georgia's real estate portfolio by applying industry best practices in asset, space and transaction management. Values Stewardship Accountability Integrity Leadership 2 2019 ABOUT THE COMMISSION leadership Board Members Governor Brian Kemp Board Chairman Alan Skelton State Accounting Officer, Board Vice Chairman Brad Raffensperger Secretary of State, Board Secretary Lynne Riley State Treasurer, Board Member S. Michael Howell Citizen Member appointed by Speaker of the House Karl Lutjens Citizen Member appointed by Lieutenant Governor Phil Carlock Citizen Member appointed by the Governor State Properties Commission Marty Smith State Property Officer Executive Director, SPC Gerald Pilgrim Chief of Staff Lisa Sharpton Director, Human Resources April King Chief Financial Officer Frank Smith Deputy Executive Director Clark Wong Land Manager Morris Srochi Leasing Manager Russell Morgan Asset Manager Alisa Pereira Director, Legal Services Alan Perry Chief Technology Officer Morgan Smith-Williams Director, Marketing & Communications 2019 leadership 3 year in review Marty Smith State Property Officer Executive Director, State Properties Commission As the State's real estate portfolio manager, our charge is to find ways to derive the most value out of our assets. In Fiscal Year 2019, the State Properties Commission planted the foundation for investments decades into the future. The Commission successfully negotiated a new agreement with CSX Corporation authorizing their continued use of the Western & Atlantic Railroad, valued at $1.2 billion over a 50-year lease period, starting January 1, 2020. Railroads are a major part of Georgia's freight infrastructure, and the Port of Savannah and the Hartsfield-Jackson Atlanta International Airport both depend on Georgia's railroads to ship goods into the interior of the country. CSX's operation of the Western & Atlantic Railroad generate $1.1 billion in public benefits and supports approximately 1,800 jobs yearly. We were also proud to have supported the efforts to revitalize the area where Atlanta was born as the terminus of the Western & Atlantic railroad line. The Commission successfully marketed and sold a 9.3-acre tract in Atlanta's Gulch area to developer CIM Group, which is strategically important to the $5 billion Centennial Yards project. Our continuous improvement means agencies can rest assured that the Commission is prepared to support their growth through unmatched expertise and customer service. The Governor's and the Legislature's support of multi-year contracting allows the agencies to receive the best market rental rates in fact, the State avoided over $54 million in costs during this fiscal year. Recent hurricane activity has had a devasting effect on Georgia's prized beaches; in order to protect and prevent future damage to coastal structure, the Commission granted mineral leases at both Sea Island and Tybee Island for beach nourishments. Beach nourishment replaces sand that is lost through erosion. By creating a wider beach with new sand, it becomes possible to prevent future damage to coastal structures. The new sand interacts with the waves in the surf zone to reduce the impact of very high tides and storm surges. Through Governor Kemp's strong leadership, we are leading our industry through innovation and will continue to make significant strides to support Georgia's growth for years to come. Frank Smith Deputy Executive Director, State Properties Commission 4 2019 year in review FY 2019 PORTFOLIO SUMMARY Overview Highlights Revenue Assets by County 2019 portfolio summ ary 5 overview The State Properties Commission is organized in four distinct divisions: Space Management, Asset Management, Land, and Leasing. Space Management Division Space Management maximizes the utilization of space to create efficient work environments. SPC has developed space standards based on industry and public sector criteria to accomplish the following objectives: Increase occupancy Decrease vacancy Improve the value of State owned and leased space Provide the most cost-efficient work space for State entities Asset Management Division The strategic function that manages the State's real estate assets to provide the maximum value to the State. The Asset Management Division (AM) is responsible for collaborating with agencies to develop 4-year real property plans based on staff projections, budget, existing locations and operational plans. Additionally, AM maintains the State's real property database (BLLIP); provides project management on select SPC deals and evaluates space utilization of leased and owned space. Land Division All acquisitions or dispositions of the State's real property must come through SPC. The Commission assures that all acquisitions and dispositions of land in the State's name meet the legal, policy, and process requirements of the State. Properties owned by the Board of Regents are excluded. Acquisitions into the State include fee simple interests, conservation easements, access and other easements, and ground leases. Dispositions from the State include temporary revocable licenses, permanent easements, short or long-term ground leases and fee simple conveyances. Leasing Division SPC offers an array of leasing services to State entities in commercial or state-owned leased space. Services range from locating and procuring new lease locations to renewing or renegotiating existing agreements, as well as managing the State's lease inventory. The Division's responsibilities and functions include leasing assistance to State entities in both State and commercially owned facilities. 6 2019 PORTFOLIO SUMMARY 2019 highlights 14,802Total Buildings in the portfolio 10,037 State of Georgia 3,487 Board of Regents 1,095 Georgia Department of Transportation 183 Community Service Boards 2,277Total Leases in the portfolio 1,189 SPC Managed 709 Agency Managed 379 Board of Regents Managed 830,320 Total State owned and leased acres of land $36,696,547,714 Total insured value of buildings in portfolio Mackey Branch Waterfall 2019 portfolio summ ary 7 revenue Chart Title SPC RevenueRCevoenluleeCcoltleectded vs.ExSpePndCiturEesxpenditures $12,680,212 $9,651,202 $9,063,222 $1,852,190 2017 $1,980,614 Chart Title 2018 Revenue Collected Expenditures $1,980,614 2019 Total revenue collected and deposited into State treasury vs. total expenditures. Includes staff, surveys, appraisals and other operating expenses. $12,680,212 type of revenue Breakdown of Revenue Collected$9i,3n67F,8Y062019 by Type 94% 1% 5% Land Leases $9,651,202 Easements & Revocable License Agreements Sales AMOUNT $7,814,484.43 $454,700.00 $794,037.70 8 $1,827,657 $1,852,190 $1,980,614 2019 PORTFOLIO SUMMARY assets by county The following totals include the Department of Transportation, Board of Regents, and Community Service Boards. County Appling Atkinson Bacon Baker Baldwin Banks Barrow Bartow Ben Hill Berrien Bibb Bleckley Brantley Brooks Bryan Bulloch Burke Butts Calhoun Camden Candler Carroll Catoosa Number Number of of Buildings Leases 33 8 6 5 18 7 4 5 521 70 13 2 196 8 179 18 30 9 29 6 272 53 68 6 10 3 9 4 87 11 185 49 62 9 162 9 33 1 83 9 17 3 143 28 19 7 Total State Owned Acreage 4,973.37 4,534.10 19.23 6,449.27 5,301.46 3,332.42 1,859.15 2,851.23 42.26 9,040.96 2,325.72 631.22 6,714.10 4.63 23,035.60 3,673.91 10,088.40 1,373.60 6,836.32 5,688.07 16.30 766.75 47.64 Total State Leased Acreage 0.00 0.00 0.00 0.00 1.22 0.00 0.00 3,455.00 0.00 0.00 0.00 4,304.74 0.00 0.00 2.00 0.00 0.00 0.00 0.55 0.00 0.00 0.00 0.00 Total State Owned & Leased Acreage 4,973.37 4,534.10 19.23 6,449.27 5,302.67 3,332.42 1,859.15 6,306.23 42.26 9,040.96 2,325.72 4,935.96 6,714.10 4.63 23,037.60 3,673.91 10,088.40 1,373.60 6,836.87 5,688.07 16.30 766.75 47.64 County Number Number of of Buildings Leases Charlton 62 7 Chatham 487 56 Chattahoochee 6 4 Chattooga 98 5 Cherokee 14 15 Clarke 709 45 Clay 65 8 Clayton 127 36 Clinch 22 4 Cobb 141 44 Coffee 117 19 Colquitt 63 11 Columbia 133 12 Cook 41 10 Coweta 73 17 Crawford 10 3 Crisp 169 12 Dade 89 6 Dawson 102 5 Decatur 88 15 DeKalb 357 138 Dodge 100 12 Dooly 47 2 Total State Owned Acreage 37.63 33,487.87 4.48 1,299.20 40.52 5,214.62 545.09 501.17 337.02 869.43 5,334.59 1,755.71 137.45 633.10 2,803.17 2.23 1,562.91 3,560.56 21,765.14 8,930.56 3,628.76 610.45 3,457.37 Total State Leased Acreage 145.00 0.00 0.00 0.00 9,213.70 36.42 0.00 0.00 0.00 0.00 0.00 0.00 2,871.70 0.00 0.00 0.00 0.00 3.00 0.00 17,023.00 0.00 0.00 0.00 Total State Owned & Leased Acreage 182.63 33,487.87 4.48 1,299.20 9,254.22 5,251.03 545.09 501.17 337.02 869.43 5,334.59 1,755.71 3,009.15 633.10 2,803.17 2.23 1,562.91 3,563.56 21,765.14 25,953.56 3,628.76 610.45 3,457.37 2019 portfolio summ ary 9 County Dougherty Douglas Early Echols Effingham Elbert Emanuel Evans Fannin Fayette Floyd Forsyth Franklin Fulton Gilmer Glascock Glynn Gordon Grady Greene Gwinnett Habersham Hall Hancock Haralson Harris Hart Heard Henry Number Number of of Buildings Leases 118 48 78 12 62 10 4 2 14 10 153 10 122 18 40 5 13 5 3 15 205 18 31 13 179 6 381 124 23 10 4 2 236 32 82 10 15 5 27 10 103 83 156 8 156 82 44 4 16 5 183 4 60 8 2 3 42 17 Total State Owned Acreage 16,520.62 2,060.63 2,346.34 4.01 5,800.44 232.93 9,843.27 421.57 18.73 3.15 4,036.24 141.55 497.28 1,478.52 2,971.30 3.86 32,557.14 1,339.74 58.56 2,601.21 585.70 1,470.09 2,099.59 895.34 102.72 12,165.97 986.65 903.22 127.99 Total State Leased Acreage 0.00 0.00 0.00 0.00 843.00 1,527.72 1,634.12 3.00 0.00 0.00 0.00 0.00 393.12 5.23 2,141.60 0.00 1.60 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4,746.38 0.00 9,999.56 0.00 Total State Owned & Leased Acreage 16,520.62 2,060.63 2,346.34 4.01 6,643.44 1,760.65 11,477.39 424.57 18.73 3.15 4,036.24 141.55 890.40 1,483.75 5,112.91 3.86 32,558.74 1,339.74 58.56 2,601.21 585.70 1,470.09 2,099.59 895.34 102.72 16,912.35 986.65 10,902.78 127.99 County Houston Irwin Jackson Jasper Jeff Davis Jefferson Jenkins Johnson Jones Lamar Lanier Laurens Lee Liberty Lincoln Long Lowndes Lumpkin Macon Madison Marion McDuffie McIntosh Meriwether Miller Mitchell Monroe Montgomery Morgan Number Number of of Buildings Leases 122 27 19 2 7 3 73 4 24 5 22 9 72 3 44 2 35 7 54 18 25 4 88 22 59 7 29 8 73 7 29 3 223 47 108 27 64 2 45 2 24 1 57 8 219 5 159 10 12 4 54 12 185 14 56 1 190 5 Total State Owned Acreage 15,814.16 7,192.05 806.07 6,142.62 10,314.83 741.41 3,802.11 203.25 235.11 282.74 16.64 9,193.53 890.40 913.69 3.86 25,301.89 3,172.60 668.45 1,148.62 1,500.71 10,313.86 637.05 62,868.36 15,094.60 4,687.49 1,687.70 2,025.63 114.08 6,078.78 Total State Leased Acreage 0.00 0.00 0.00 0.00 0.00 0.34 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 669.00 0.00 0.00 0.00 0.00 0.00 0.00 12,539.00 0.00 654.05 0.00 6.84 0.00 0.00 0.00 Total State Owned & Leased Acreage 15,814.16 7,192.05 806.07 6,142.62 10,314.83 741.75 3,802.11 203.25 235.11 282.74 16.64 9,193.53 890.40 913.69 672.86 25,301.89 3,172.60 668.45 1,148.62 1,500.71 10,313.86 13,176.05 62,868.36 15,748.65 4,687.49 1,694.54 2,025.63 114.08 6,078.78 10 2019 PORTFOLIO SUMMARY County Murray Muscogee Newton Not Georgia Oconee Oglethorpe Paulding Peach Pickens Pierce Pike Polk Pulaski Putnam Quitman Rabun Randolph Richmond Rockdale Schley Screven Seminole Spalding Stephens Stewart Sumter Talbot Taliaferro Tattnall Number Number of of Buildings Leases 134 8 210 62 84 9 62 0 68 9 32 3 50 14 123 9 17 5 12 4 35 5 26 9 52 2 235 8 1 4 96 4 13 7 349 31 56 24 3 2 30 9 63 4 146 31 26 11 74 2 174 24 25 4 97 1 414 13 Total State Owned Acreage 3,712.12 1,960.55 988.95 1,519.09 1,565.81 391.42 15,368.81 2,892.76 154.88 2.00 566.71 3,465.93 6,153.86 15,641.28 2.00 5,050.52 17.91 1,952.07 1,247.61 2.21 2,149.97 3.86 1,085.53 61.10 6,697.93 1,904.78 13,946.12 2,357.42 13,988.93 Total State Leased Acreage 22.68 0.00 0.00 0.00 0.00 0.00 75.50 0.00 0.00 2.37 0.00 0.00 2.90 0.00 0.00 0.00 0.00 5.30 110.53 0.00 11,457.60 2,892.07 0.00 0.00 0.00 0.00 1,198.42 0.00 0.00 Total State Owned & Leased Acreage 3,734.80 1,960.55 988.95 1,519.09 1,565.81 391.42 15,444.31 2,892.76 154.88 4.37 566.71 3,465.93 6,156.76 15,641.28 2.00 5,050.52 17.91 1,957.37 1,358.15 2.21 13,607.57 2,895.93 1,085.53 61.10 6,697.93 1,904.78 15,144.54 2,357.42 13,988.93 County Taylor Telfair Terrell Thomas Tift Toombs Towns Treutlen Troup Turner Twiggs Union Upson Walker Walton Ware Warren Washington Wayne Webster Wheeler White Whitfield Wilcox Wilkes Wilkinson Worth TOTALS Number Number Total State of of Owned Buildings Leases Acreage Total State Leased Acreage Total State Owned & Leased Acreage 28 3 2,760.41 0.00 2,760.41 53 5 11,998.35 0.00 11,998.35 22 5 93.15 2.69 95.84 85 28 4,249.88 0.00 4,249.88 332 25 4,218.76 0.00 4,218.76 63 15 5,780.90 80.44 5,861.34 60 1 503.53 0.00 503.53 24 4 2,920.33 0.00 2,920.33 54 19 1,609.76 0.00 1,609.76 21 4 33.14 0.00 33.14 9 4 313.17 206.45 519.61 138 9 317.44 866.51 1,183.95 62 9 370.79 1,294.11 1,664.90 95 15 22,805.42 0.00 22,805.42 41 6 468.45 0.00 468.45 268 18 31,167.59 5.05 31,172.64 6 3 3.00 0.00 3.00 129 13 1,591.49 0.00 1,591.49 69 11 21,334.12 3.03 21,337.15 4 4 4,363.93 0.00 4,363.93 120 1 8,461.08 0.00 8,461.08 218 5 2,069.64 5,599.96 7,669.60 72 17 231.94 0.00 231.94 44 2 317.47 0.00 317.47 33 8 39.36 8,005.00 8,044.36 14 3 1,946.60 0.00 1,946.60 7 4 1,195.69 0.00 1,195.69 14,802 2,277 726,268.88 104,051.49 830,320.37 2019 portfolio summ ary 11 FY 2019 BUILDINGS PORTFOLIO Highlights Agencies with Most Square Footage for Owned Buildings Top Primary Use Types for State Owned Buildings Breakdown of State Owned Buildings by Age 12 2019 buildings PORTFOLIO 2019 highlights SPC is responsible for the acquisition and disposition of all state buildings and for maintaining a comprehensive inventory of all owned buildings in the portfolio; their size, use and other key criteria. Each agency is responsible for the maintenance and operation of state buildings in their custody The state-owned building portfolio consists of 14,802 buildings Department of Revenue, Albany 2019 buildings PORTFO LIO 13 STATE OWNED BUILDINGS Top 10 Agencies with Most Gross Square Footage for Owned Buildings SQ FT 80,041,502.93 1 13,761,235.00 2 13,033,990.00 3 7,625,236.86 4 7,047,820.07 5 SQ FT 4,836,825.00 6 4,771,469.00 7 4,424,737.50 8 4,391,153.00 9 10 3,120,098.00 14 2019 buildings PORTFOLIO STATE OWNED BUILDINGS Top 10 Primary Use Types for State Owned Buildings Use Type BUILDINGS 1 Warehouse, storage, shop, maintenance 2 Residence, house, apartment, dormitory 3 Classroom, faculty, library, training 4 Office 5 Comfort station, bathhouse, welcome center 6 Student services, recreation, event, entertainment 7 Land 8 Laboratory 9 Athletic facility 10 Medical, clinical 4,758 1,433 1,067 965 411 308 262 246 227 183 21-30 Years 41-50 Years 0-20 Years 31-40 Years 51 Years and Over Breakdown of State Owned Buildings by Age 23% 0-20 Years 17% 21-30 Years 13% 31-40 Years 50% Over 40 Years 37% 51 Years and Over 11% 41-50 Years 2019 buildings PORTFO LIO 15 FY 2019 SPACE PORTFOLIO Highlights Primary Use Type Requests Space Action Request Types Space Standards for Administrative Office Space Comparison of Georgia's Space Standards to Public & Private Sector 16 2019 space PORTFOLIO 2019 highlights SPC's Space Management Division offers a full range of professional space planning services to State entities in meeting their space needs. For those State entities submitting requests for administrative space, Space Management not only develops space utilization programs to determine square footage requirements, but also prepares schematic floor plans and design intent drawings that can steer workspace layout and construction. In FY 2019, the SPC Commission received 936 space requests from state agencies. The use and transaction types of space requested are illustrated in the two charts below. Percentage by Primary Use Type Requests Submitted to SPC During FY 2019 Use Type percentage Administrative/Office Classroom/Faculty Offices Classroom/Training Rooms Towers Warehouse/Storage Other Uses 81% 4% 2% 5% 1% 7% Received and processed 936 space action requests from State agencies Percentage of Space Action Request Types Submitted to SPC During FY 2019 4 % 2 % 4 % NNeew w 52% RReenengoetigatoiontiation RReenenwealswals CCaancnelclaetiolnlation OOthtehr er 38% New Renegotiation Renewals Cancellation Other 2019 space PORTFOLIO 17 space standards Space Standards for Administrative Office Space SPC tracks the square footage per employee in leased space to drive efficiency in space utilization. The chart illustrates the average square footage of space per employee from 2014 to 2019. *Space standards were revised in 2015. **Includes circulation and common space. 500 400 300 288 200 100 0 2014 *Space Standards were revised in 2008, 2012, 2014 & 2015* 353 302 300 244 292 2015* 2016 2017 2014 2015 2016 2017 2018 2019 2018 ** 2019 Comparison of Georgia's Space Standards to Public & Private Sector (in square feet) Georgia Virginia Kansas Massachusetts GSA (Federal) Private Sector Corporate office 120-220 SF 120-196 SF 110-400 SF 100-200 SF 250-300 SF 120-225 SF CUBICLE 49-64 SF 48-96 SF 45-100 SF 42-100 SF 64-200 SF 20-48 SF 18 2019 space PORTFOLIO FY 2019 LEASE PORTFOLIO Highlights Total Leases Multi-Year Leases Cost Avoidance with Multi-Year Leases Executed Multi-Year Leases Key Performance Indicators 2019 LEASE Portfolio 19 2019 highlights The leasing of administrative space for use by State entities is also within the purview of SPC. The Leasing Division provides management and oversight of the State's leased property portfolio, as well as leasing assistance to State entities in both State and commercially owned facilities. Lease portfolio consists of 2,277 leases, of which SPC manages 1,189 Multi-year lease agreements' cost avoidance was over $54M for FY 2019 379 709 1,189 FY 2019 Total Leases SLePSasCPesCLMLeaneaaagsesedesbsy SPC AAggAeengcney MncaycnyaMgMeadaLnenaaasgegseedd BBooBaraodraodfrRdoegofefnRtsReeggeennttss Managed Leases SPC completed 16 new multi-year lease agreements in FY 2019 20 2019 lease PORTFOLIO MULTI-YEAR LEASES Since the ratification of the Constitutional Amendment in November 2012, which authorized SPC to enter in Multi-Year Leases (MYLs), SPC and the Georgia State Financing and Investment Commission (GSFIC) work together to safeguard Georgia's AAA credit rating. For FY 2019, GSFIC set a total MYL contract obligation limit of $215 million. In FY 2019, SPC executed 16 multi-year leases that together, totaled 563,035 rentable square feet. SPC's total contract obligation is $161,664,159, and the agency has avoided $53,689,780 in costs. Department of Revenue, Albany Department of Revenue, Albany Department of Human Services, Canton Department of Human Services, Canton 2019 LEASE Portfolio 21 MULTI-YEAR LEASES Cost Avoidance With Multi-Year Leases Cost avoidance by the state year over year since gaining the MYL ability. $49,454,000 $49,266,000 $53,689,780 $32,706,900 $6,574,600 Department of Family and Children Services, DeKalb 2015 2016 2017 2018 2015 2016 2017 2018 2019 2019 22 2019 lease PORTFOLIO FY 2019 executed multi-year leases Entity Department of Banking and Finance Sub-Entity N/A Square Feet 2,800 City Dublin County Landlord Laurens Southern Loan and Investment Company Department of Human Services Division of Family & Children Services 11,522 Cordele Crisp Perlis Realty Company Department of Juvenile Justice N/A 3,200 Dublin Laurens Southern Loan and Investment Company Department of Human Services Division of Family & Children Services 112,731 Atlanta DeKalb FDS Georgia I, LLC Department of Human Services Division of Family & Children Services 49,000 Marietta Cobb The Center for Children & Young Adults Department of Revenue N/A 11,805 Albany Dougherty Indusa Beverage, Inc. Department of Human Services Division of Family & Children Services 27,337 Carrollton Carroll Carroll County Board of Commissioners Office of the Secretary of N/A State of Georgia 12,466 Atlanta Cobb Interstate NW Owner, LLC Department of Behavioral N/A Health & Developmental Disabilities (Amendment) 0 Cumming Forsyth 1230 Bald Ridge Marina, LLC Department of Human Services Georgia Vocational Rehabilitation Agency Department of Human Services Department of Human Services Department of Driver Services Technical College System of Georgia Department of Human Services Department of Human Services Department of Human Services (Amendment) Total Division of Family & Children Services N/A Division of Aging Division of Family & Children Services N/A N/A Division of Child Support Services Division of Family & Children Services Division of Child Support Services 26,958 5,983 15,678 32,850 128,272 92,640 Tifton Warner Robbins Valdosta Canton Conyers Atlanta Tift Houston Lowndes Cherokee Rockdale DeKalb 5,664 24,129 0 Covington Covington Carrollton Newton Newton Carroll 563,035 Tift County Board of Commissioners BY OS, LLC GF Valdosta Mall, LLC Efficient Governement Public Service, Inc. Zephyr Holdings, LLC Clairmont Place Partners, LLC Tango Mike, LLC Tango Mike, LLC WHLR-Riverbridge Shopping Center, LLC 2019 LEASE Portfolio 23 KEY PERFORMANCE INDICATOR Department of Human Services Division of Child Support Services and Aging Services Consolidation and Co-location Consolidation and Co-location with No Additional Operating Expense Pass Throughs The Opportunity For over a decade, Child Support Services and Aging Services have occupied multiple separate administrative offices and training spaces. Co-locating these divisions will maximize space utilization while addressing the needs for additional operational space and staff growth. Through SPC's competitive RFP process, Valdosta Mall presented a cost effective option that satisfies the requirement from both an economic and size perspective. This former Sears box store will be converted into office space. The Process Due to the lack of available office product in the city of Valdosta, the only other proposals received were either too small, or required new construction, which resulted in unfavorable (over budget) economics. The decision to relocate to Valdosta Mall was in part due to the convenient and well-known location, as well as the proposed renovation of former Sears box into brand new office space. This newly converted space will allow the agency to proactively plan its space configuration. This results in increased efficiencies, lower costs, and greater product quality. The result of this proposed lease will be a fully functional, modern office space for the two divisions, allowing them to share common areas, whilst maintaining autonomy from one another in client-facing capacities. Lease #8376 Address 1700 Norman Drive Valdosta, GA 31601 Space Use Office/Administration Square Footage 15,678 RSF Lease Term 180 months Savills Services Transaction Management Project Management 24 2019 lease PORTFOLIO KEY PERFORMANCE INDICATOR Department of Human Services Division of Child Support Services and Aging Services Consolidation and Co-location Financial Details The lease will have a flat rate structure of $22.66 per rsf with 1.65% annual escalations. The general terms and conditions are highlighted below: Approximately 15,678 rsf Fifteen (15) year lease term $22.66/per rsf modified gross rental rate, with 1.65% annual escalations No additional operating expense pass throughs Turnkey renovations and base building improvements valued at over $1.1 million The terms outlined above represent a below market deal while still including over an estimated $1,100,000 in additional Tenant Improvements to upfit the space to the agency standards for a turnkey buildout. The current full service retail market rate, including tenant improvement allowance, in Valdosta is $24.38 per rsf. The cost savings and cost avoidance are detailed below: Savings in DHS CSS & AS Rental Rate vs. Market Rental Rate/RSF $1.72 Total Cost Avoidance: DHS CSS & Aging vs. Market ($22.66/RSF vs. $24.38 RSF) $583,990.49 * a 3% annual market escalation Estimated Value of Turnkey Improvements (@ $75.00/RSF) $1,100,000 *Turnkey buildout (inclusive of base building improvements and TI) 2019 LEASE Portfolio 25 KEY PERFORMANCE INDICATOR Technical College System of Georgia Lease Renewal The Opportunity & Process TCSG has occupied approximately 87,849 rsf of office space located at 1800 Century Place, NE, Atlanta, Georgia 30345 since 2004 under a multiyear lease between the landlord and Georgia Building Authority (GBA). TCSG wishes to continue their tenancy as the location serves them well and the property is well maintained. TSCG has requested SPC enter into a new lease on their behalf which would allow for improvements to the premises, including an expansion of 4,791 rsf in order for TCSG to occupy the entire building. Entering into a twelve-and-a-half-year lease will enable the landlord to complete all necessary tenant improvements to update and expand the premises. Lease #9127 Address 1800 Century Place, NE Atlanta, GA 30345 Space Use Office/Administration Square Footage 92,640 RSF Lease Term 150 months Savills Services Transaction Management 26 2019 lease PORTFOLIO KEY PERFORMANCE INDICATOR Technical College System of Georgia Lease Renewal Financial Details The lease will have a rate structure of $19.06 per rsf with an annual average escalation of 3.0%. The general terms and conditions proposed by Clairmont Place Partners, LLC are highlighted below: At lease commencement, tenant shall occupy approximately 87,849 rsf Premises will expand to include an additional 4,791 rsf beginning July 1, 2020 or when the landlord obtains a Certificate of Occupancy. Twelve and a half (12.5) year lease term $19.06 per rsf full service rental rate with 3% escalation of the base rate for fiscal year 2020. Upon Commencement of the expansion space which is anticipated July 1, 2020, tenant will pay $21.10 per rsf full service with two (2%) percent annual escalations over the remaining term. Tenant will only pay for actual increases in taxes and insurance over a 2019 base year capped at 105% over the previous year. Landlord to provide and pay for painting, new flooring and moving expenses associated therewith. Tenant improvement allowance of $35.00 per rsf on the additional 4,791 rsf area The current full service office market rate, including tenant improvement allowance, in North DeKalb is $30.00 per rsf. The cost savings and cost avoidance are detailed below: Year 1 Per RSF Savings in DHS DFCS Full Service Rental Rate vs. Market Full Service Rental Rate ($29.79/ RSF vs. $30.89/RSF) $10.941 Total Lease Term Cost Avoidance: DHS DFCS Full Service Rental Rate vs. Market Full Service Rental Rate ($29.79/RSF vs. $30.89/RSF) $12,402,8852,3 Notes: 1 Savings shown for the first year of the lease. 2 Cost avoidance shown is for the difference between the $30.00 current market rent, with 3% annual increases, and the rent under proposed lease over a term of 12.5 years. 3 A 3% annual increase applied to the current market rent as a commonly accepted industry standard. 2019 LEASE Portfolio 27 KEY PERFORMANCE INDICATOR Department of Revenue - Alcohol and Tobacco Unit Expansion and Lease Negotiation Expansion with Concessions and Tenant Improvements The Opportunity DOR currently occupies 5,094 rsf of office space at 1105-D West Broad Avenue in Albany, GA. DOR needs to expand their office space to accommodate increased employee headcount and customer foot traffic, to expand the Alcohol and Tobacco unit and to add a regional training facility. The current landlord cannot provide expansion space for the agency. In January, 2018, SPC advertised a Request for Proposal (RFP) to relocate DOR. Three (3) proposals were received, and the selection committee visited the properties in February, 2018. In April, 2018, the selection committee selected Indusa Beverage, Inc. as the apparent awardee. The Process Due to the nature of the Albany market, most existing office spaces in the market are in old buildings that have not been renovated to modern standards. The Indusa Beverage, Inc. building is already slated for conversion to office, and the Landlord has already underwritten the majority of the shell conversion as part of its redevelopment plan for the property. Other existing product in the market would require significantly more improvement to meet minimum shell requirements for the State. The result of this proposed lease will be a fully functional, modern office space for the agency in a well located building that is easily accessed by constituents and agency personnel. Lease #8348 Address 735 N Westover Blvd., Suite A Albany, GA 31707 Space Use Office/Administration Square Footage 11,805 RSF Lease Term 120 months Savills Services Transaction Management Construction Management 28 2019 lease PORTFOLIO KEY PERFORMANCE INDICATOR Department of Revenue - Alcohol and Tobacco Unit Expansion and Lease Negotiation Financial Details The lease will have a flat rate structure of $20.75 per rsf with no annual increase. The general terms and conditions of the Indusa Beverage Inc. proposal are highlighted below: Approximately 11,805 rsf Ten (10) year lease term $20.75 per rsf modified gross (net of janitorial services) rental rate with no annual increase Landlord is providing base building improvements of $221,510.00 ($18.76/SF) and TI valued at $818,849.00 ($69.36/SF) The terms outlined above represent a below market deal while still including an estimated $405,000.00 in additional TI to upfit the space to agency standards for the turnkey buildout. The current modified gross market rate for office space in Albany is $22.70 based on an estimated $35.00 per RSF market Tenant Improvement package. The cost savings and cost avoidance of the DOR deal versus the current market are detailed below: Savings in DOR Rental Rate vs. Market Rate Rental/RSF $1.95 / RSF Total Cost Avoidance: DOR vs Market ($20.75 /RSF vs. *$22.70 /RSF) $230,175.69 *Rate is based on the average rental rate of a ten year term with a 3% annual market escalation Estimated Value of Tenant Improvements $1,040,359.00 *Turnkey buildout (inclusive of base building improvements and TI) 2019 LEASE Portfolio 29 FY 2019 LAND PORTFOLIO Highlights Board Approved Items Spotlight: CSX Lease Legislative Approved Items Other Approved Items General Assembly Approved Surplus/Conveyance Completed Items 30 2019 land portfolio 2019 highlights SPC is responsible for approving all acquisitions or dispositions of the State's real property. The Land Division assures that all acquisitions and dispositions of land in the State's name meet the legal, policy, and process requirements of the State. SPC Board approved 52 items in FY 2019 SPC Board Meeting Approved Items Other Items 11 5 Disposition-Short Term Lease 1 5 Disposition-Approve Sale 10 8 General Assembly approved 28 properties for Surplus/Conveyance in FY 2019 Reversion-Quit Claim Deed Acquisitions-Ground Lease Acquisitions-Easements Acquisitions-Conservation Easements 3 4 2 2 6 4 2 3 2018 2019 Acquisitions-Fee Simple 21 25 2019 land portfolio 31 SPOTLIGHT: Csx LEASE 32 A new, 50-year lease agreement with CSX for the continued use of the state-owned Western & Atlantic railroad continues to derive significant economic impact for the State of Georgia. The lease will generate $1.2 billion to the State Treasury, which is $509 million more than the previous leasing agreement. 2019 SPOTLIGHT the western & atlantic railROAD At approximately 1,550 acres and 137.33 miles, the Western & Atlantic Railroad was completed in 1850 and runs through several counties in Georgia and even enters Hamilton County, Tennessee. The Southeastern Terminus of the Western & Atlantic Railroad (W&A) later led to the creation of Atlanta. Since then, the W&A has been a tremendous aid to the economic growth of the State and its position as the hub of the South. With authorization and support of the Georgia General Assembly through Act 71 (Senate Resolution 228) in 2017, the State Properties Commission negotiated with CSX Corporation (CSX), a new lease agreement permitting their continued use of the W&A. The original lease executed in 1969 and later amended in 1986 will be replaced with a new lease for 50 years beginning January 1, 2020. CSX's operation of the W&A generates an additional $1.1 billion (NPV) in public benefits and supports approximately 1,800 jobs yearly. Operation of the line also diverts 362,053 cargo trucks off Georgia's interstates yearly--which equates to almost 1,000 cargo trucks daily. The value of the lease payments to the State of Georgia total approximately $1.2 billion over a 50-year lease period. This is an increase of $509 million over the current lease agreement. In addition to monetary consideration, CSX will also convey a 50-year lease to the Georgia Department of Transportation, allowing GDOT to ensure existing fiber lines running from the Traffic Management Center to Highway 75/85 and I-20 remain undisturbed. "The successful renegotiation of this long-term lease represents multiple benefits for the residents of Georgia," said Carol Comer, Director of the Division of Intermodal for the Georgia Department of Transportation (GDOT). "In addition to the long-term positive fiscal impact this lease brings, it also allows us to extend our fiber optic cable network, helping the Department to better manage our transportation network overall." For most Georgians, the most exciting benefit of the new lease is the conveyance of 2.3 miles of unused rail to extend the Silver Comet Trail. The Silver Comet Trail is a 61-mile-long (non-motorized) trail in northwest Metro Atlanta. "This acquisition will allow for growth of the Silver Comet Trail and will offer new opportunities for recreation in Georgia," said Mark Williams, Commissioner of the Georgia Department of Natural Resources. "Runners, cyclists, and outdoor enthusiasts of all kinds will now have more access to our State's natural beauty and one of-a-kind attractions that make Georgia the best place in the country for outdoor recreation." 2019 SPOTLIGHT 33 Legislative Approved Items Comparison of number and type of conveyance presented to the General Assembly. Easements Conveyances-To Sell 2 0 Conveyances-To Local Government or GDOT 5 Conveyances- 4 Ground Lease 4 1 Conveyance-Exchange 2 Conveyance-Expedited 6 11 11 10 2018 2019 Other Approved Items Comparison of number and type of additional transactions completed by SPC staff. 29 Title Certifications Executive Orders RLA's-SPO Approved CE Appraisal Reviews Approved CE Appraisal Reviews-In Process 13 12 11 12 11 18 20 28 19 23 2018 2019 34 2019 land portfolio General Assembly Approved Surplus/Conveyance: Completed This table includes all fully executed conveyances completed in FY2019; however, General Assembly approval may have occurred prior to the beginning of the fiscal year. Agency County TCSG Henry DNR TCSG SPC DOC DNR DJJ SPC TCSG Clay Bulloch Cobb Richmond Jeff Davis Baldwin Bartow Columbia DOC DOC DBHDD TCSG Tattnall DeKalb Chatham Hall TCSG GFC Dougherty Wayne GPSTC DHS GFC DNR DPS SPC SPC TCSG Monroe Cherokee Cherokee Hall Clarke Various Glynn Washington Tract Name Portion of Henry County Campus of Southern Crescent Tech Portion of George T. Bagby State Park Portion of Ogeechee Tech Portion of WARR Portion of Augusta State Prison Portion of Bullard Creek WMA Milledgeville YDC Portion of WARR Portion of Grovetown-Columbia Campus of Augusta Technical College Portion of Rogers State Prison Portion of Metro State Prison Portion of Savannah Regional Hospital Portion of New Hall County Campus of Lanier Technical College Total Acreage Portion of Albany Technical College Wayne County Unit Total Acreage GPSTC Training Center DHS Cherokee Walesa Tower Site Portion of Lake Lanier State Park Athens Hanger WARR Sea Island Beach Renourishment Portion of TCSG Campus Acres 1.91 Consideration Nominal Grantee Snapping Shoals EMC 0.534 0.06 0.267 0.21 3.956 0.12 0.32 0.63 Nominal Nominal $5,400 Nominal Nominal Nominal Nominal $7,331 Georgia Transmission Corporation Excelsior Electrical Membership Corporation Georgia Department of Transportation Georgia Department of Transportation Georgia Department of Transportation Baldwin County, Georgia City of Emerson Georgia Power Company 11.146 0.23 0.0351 0.217 Nominal $4,900 Nominal $6,800 Atlanta Gas Light Company Blackhall Studios Chatham County, Georgia Tribe Transportation, Inc. 19.64 $24,431 Total Easement Conveyances 0.64 Property City of Albany 1 Property Wayne County, Georgia 1.64 Total Exchange/Settlement Conveyances $5,000/annually Justice Federal Credit Union 5 Improvements Efficient Government Public Service, Inc. 0.03 Nominal Cherokee County Board of Commissioners 1.32 Nominal City of Gainesville 0.74 Nominal Georgia Aviation Authority 1,550 $1,008,333.33/mth CSX Transportation, Inc. $444,150 Sea Island Acquisition, LLC Nominal Washington County Board of Commissioners Conveyance Type Easement Easement Easement Easement Easement Easement Easement Easement Easement Easement Easement Easement Easement 9 Exchange Exchange 2 Lease Lease Lease Lease Lease (Assignment) Lease Lease (Mineral) Lease 2019 land portfolio 35 Agency County TCSG Decatur SPC Chatham GFC Morgan GFC Burke GFC Schley TCSG TCSG DEcD DOA DJJ SPC DOD GFC DOA DNR DOA Hall Hall Fulton Muscogee Baldwin Fulton Dougherty Lincoln Hall Rockdale Chatham DBHDD Baldwin DOD Baldwin DNR Rabun GFC Brooks DOC Jackson DOL Coffee Tract Name Decatur County Campus of Southern Regional Technical College Tybee Island Beach Renourishment Total Acreage Apalachee Tower Site The Chief Ranger Residence Schley County Unit Total Acreage Oakwood Campus of Lanier Technical College Portion of Hall County Campus of Lanier technical College Hotel Site Columbus Farmers Market Milledgeville YDC GULCH Tract Albany Armory Lincoln County Unit Oakwood Poultry Lab Poynter Reservoir Black Shoals Park Portion of Savannah State Farmer's Market Portion of Central State Hospital Campus Portion of Milledgeville Readiness Center Portion of Tallulah Gorge State Park Brooks County Unit I.W. Davis Probation Detention Center DOL Office Acres 1557.09 0.25 0.5 0.5 1.25 41.188 6.55 7.2457 14.57 5.7 9.367 4.5 0.453 10.73 405.1 0.048 329.442 0.468 0.303 2 13.81 0.83 Consideration Nominal Nominal Nominal Nominal Nominal Nominal Nominal Nominal Nominal Nominal $15,000,000 Nominal Nominal Nominal Nominal $8,700 Nominal $63,500 Nominal Nominal Nominal $150,000 Grantee Board of Regents of the University System of Georgia City of Tybee Island Total Lease Conveyances M.H. Cochran, his heirs, successors, or assigns Board of Commissioners of Burke County, Georgia L.S. Tondee, their heirs, successors, or assigns Total Reversion Conveyances Board of Regents of the University System of Georgia City of Gainesville Conveyance Type Lease Lease (Mineral) 1 Reversion Reversion Reversion 3 Sale Sale Geo L. Smith II World Congress Center Authority Columbus Consolidated Government Baldwin County, Georgia 30 Spring St. (Atlanta) Fee Owner, LLC Dougherty County, Georgia Lincoln County Board of Commissioners City of Oakwood, Georgia Rockdale County, Georgia Georgia Department of Transportation Central State Hospital Local Redevelopment Authority Georgia Department of Transportation Town of Tallulah Falls, Georgia Brooks County, Georgia Jackson County, Georgia Seven Acres Properties, LLC Sale Sale Sale Sale Sale Sale Sale Sale Sale ($8,238 General Treasury; Remainder to Agency for Site Improvements) Sale Sale ($35,413 General Treasury; Remainder to Agency for Cost to Cure and Site Improvements) Sale Sale Sale Sale* * Proceeds retained by the Department of Labor, not deposited in Treasury. 36 2019 land portfolio Photos Courtesy of: Cover Tybee Island Beach/City of Tybee Page 7. Mackey Branch Waterfall/Matthew Moore Page 13. Albany, Department of Revenue/Greg Walker, Houser Walker Page 21. Albany, Department of Revenue/Greg Walker, Houser Walker Page 21. Canton, Department of Human Services/Michael-Chase Eaton, Aerial Photography Inc. Page 22. DeKalb, Department of Family and Children Services/Don Chandler Page 24. Valdosta, Department of Human Services Division of Child Support Services and Aging Services/Savills Studley Page 25. Valdosta, Department of Human Services Division of Child Support Services and Aging Services/Savills Studley Page 26. Atlanta, Technical College System of Georgia/Savills Studley Page 29. Albany, Department of Revenue/Greg Walker, Houser Walker Page 32. Western and Atlantic Railroad, CSX/Georgia Ports Authority Page 33. Western and Atlantic Railroad, CSX/Georgia Ports Authority Page 34. Canooche Sandhills/Department of Natural Resources Digital copies of this publication and prior reports are available at www.spc.ga.gov. Find the State Properties Commission on the web: www.spc.ga.gov Building, Land, and Lease Inventory of Property (BLLIP): www.realpropertiesgeorgia.org 37 SPC State Properties Commission REAL PROPERTY REAL SOLUTIONS 270 Washington Street, Suite 2-129 Atlanta, Georgia 30334 www.spc.ga.gov 38