10.26.21 Fire Station Presentation — File 23-0844

Meeting Emergency Response Needs in Assembly Square: Fire Station Proposal Update to City Council Finance Committee​ October 26, 2021

Key Questions • Why do we need a fire station in Assembly Square? • What are the options for meeting this need? • The Current Proposal? 2

Assembly Square is Booming! • Assembly Square today • 4.9M+ square feet of development • 1,500+ housing units • 7,000+ jobs • In FY21 alone, ASQ added $207M of new growth in property values • In 20 years, Assembly will more than double in size • Another 2,500 housing units • 4.6M sf of more office/lab • 1.6M sf of more retail • $6.2B in new taxable property 3

2016 Carlson Group Fire Study Identified Needs at Assembly The 2016 Carlson Group Fire Study laid out a strategic plan for the Fire Department to continue to provide exceptional emergency services as Somerville grows and needs change. • Recommended Engine 3 move east of Union Square • Recommended City evaluate if response times and volumes in Assembly Square necessitated the need for a new station as the area continues to build out. 4

Response Times Continue to Lag in Assembly Square 5

Meeting the Needs Today & Tomorrow 6 Future Need Engine Company Initial Need Squad Company 10,000 square feet

Options for Meeting this Need 1. Acquire Site & Build 2. Public-private Partnership Model 7

Acquire Land & Build • Land Costs exceed $41M/acre • 10,000 sf fire station: • $9,600,000 land cost • $11,840,000 constructions costs Estimated $21,440,000 total project costs 8

True Cost is Likely Much Higher Estimate does not include: • +$2.7M-3.6M - Eminent domain settlement premium • +$2.0M-4.0M – Cost premium as project breaks ground in 5 years • +$15M—Lost opportunity to collect taxes on development above the new station; Tax revenue est to be $500,000/year on 70,000 sf of upper story lab space True cost may rise to $44,040,000 ($19.7M-22.6M of potential cost premiums) 9

Public-private Partnership (P3) Models • DBFOM – Hire a developer/investor to Design, Build, Finance, Operate, & Maintain the building in exchange for an annual concession (rent) • ASQ Project size too small to attract P3 investment • Existing procurement challenges in Massachusetts • Long-term lease • Landlord designs, builds facility, and maintains exterior shell • City leases shell, completes buildout and maintains building interior 10

The Current Assembly Square Fire Station Proposal • Procurement Timeline • Original & Revised Lease Terms • Project Timeline • Total Project Cost 11

RFP 21-24: Lease or Purchase of Building Space for Assembly Square Fire Station • Released October 2020 • Seeking multi-year lease agreement, purchase of a commercial condo, or land to build a 15,000 sq. Ft. Station • One proposal received – BRE-BMR Middlesex Realty (Biomed Realty) 12

Original BRE-BMR Middlesex Realty Bid • 30-year term • 10,000 sq. ft. cold dark shell • Year 1 rent - $863,814 • Year 30 rent - $1,533,999 • rent includes property taxes • 2% rent increase each year 13

Revised Lease Terms • 30-year term • 10,000 sq. ft. cold dark shell • Year 1 rent - $461,776 • $349,576 base rent + $112,000 estimated property taxes • Year 30 rent - $820,042 • $620,793 base rent + $199,250 estimated property taxes • 2% rent increase each year 14

Total Costs: Lease Option Present Value 30-year lease $10,080,076 Rent Buy Down (use impact fees) $4,200,000 Buildout Costs $3,900,000 Total Costs $18,180,076 15

Estimated Timeline Fall 2021 City Council approves lease; Mayor executes lease Fall/Winter 2021 Biomed Realty breaks ground on lab building and parking garage Fall 2022 Biomed Realty delivers cold dark shell to the City City initiates interior buildout of the fire station Spring 2023 Assembly Square Fire Station opens 16

Cost Comparison Summary Delivery Approach Lower End Estimate Upper End Estimate Acquire Land + Build $21,440,000 $44,040,000 30-year Lease $18,180,000 $18,180,000 17

18 Total Annual Costs