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Council raises cost question on proposed 32‑year shelter lease; administration defers while reviewing options
Summary
Councilman Gonzales flagged a proposed lease for a shelter whose full 32‑year term (including renewal options) could cost the city about $129.8 million; administration deferred the item to study alternatives, including whether buying a building would be cheaper.
A deferred shelter lease drew scrutiny at the May 20 pre‑meeting after a council member said the proposed lease terms could saddle the city with roughly $129.8 million in payments over 32 years if both renewal options are exercised.
Councilman Gonzales asked the administration whether, instead of entering a long‑term lease, the city should either bond and buy a building or consider alternative approaches. “If we were to exercise the 2 options on this lease, we would be paying a hundred $29,758,382.14 over the 32 years of the lease,” he said, and asked whether buying a facility might be less costly than long‑term rent.
Business Administrator Eric Pennington said the shelter item had been deferred to allow administration review of those exact questions. Pennington acknowledged the city is “not a particularly good landlord” and said possible approaches include bonding for a building and finding a third‑party operator to manage the shelter. He said the administration is examining whether bonding and acquiring a property and contracting management externally would be a better long‑term solution. Pennington also said the deferral would allow staff to consult further and return with alternatives.
Council members did not take a final vote at the pre‑meeting; the city indicated the item remains under review and likely deferred to the following month so staff can develop and present options on ownership versus long‑term leasing and the fiscal implications of each choice.
