North Oaks council weighs 10-year lease at Village Center against building a permanent City Hall

Mayor Krista Wolter and members of the North Oaks City Council on July 1 reviewed a yearlong task-force study and a presentation by Steve Chirhart of TaTonka Real Estate Advisors that compared leasing office space at 400 Village Center Drive with owning or building a new City Hall that could accommodate offices and public works needs.

Chirhart told the council the task force — which included the city administrator, two councilors, two NOHOA board members and staff — had surveyed all commercial parcels in the Village Center area and several other sites. He said the dermatology tenant in the 400 Village Center building will vacate Feb. 28, 2027, and that Pratt, the building owner, has offered a tenant allowance and a six-month rent abatement to help offset construction costs for a move-in timed to May 2027.

"The city is tight on existing space — we are short two offices currently," Chirhart said, summarizing the immediate operational need. He presented a financial model showing base rent at $15.50 per square foot with 3% annual escalation, an estimated $85 per square foot for tenant build-out, and a 10-year lease requirement at the 400 building.

The presentation compared staying in the current 4,888-square-foot lease, moving into roughly 4,713 square feet at 400 Village Center, or building a new 5,000-square-foot facility. New construction estimates were roughly $285 per square foot (land excluded), with an all-in land-plus-build range of approximately $1.7 million to $2.5 million. Chirhart said owning would be more expensive up front but could lower net occupancy costs after about 20 years.

Chirhart emphasized schedule constraints: the existing lease expires in May 2027 and requires 180 days' notice to exercise a five-year renewal; to occupy 400 Village Center by May, construction would need to start March 1, 2027, making timing "tight," and the city would need to decide whether to accept a five-year renewal by Nov. 30, 2026.

Council discussion focused on whether leasing or owning better meets long-term needs and how to accommodate public works. Public Works Director Triemert and Administrator Kevin Kress said neither the 100 nor 400 Village Center buildings provide truck bays or garage space for public works, which leaves storage and vehicle needs unresolved under a lease solution.

"It's a waste of residents' dollars to rent," Mayor Wolter said, favoring a long-term solution. Councilor Mark Azman and Councilor Grover Sayre also expressed preference for ownership or a build-to-suit approach to avoid repeated leasing costs. Councilor Sara Shah said leasing does not solve public works constraints and urged planning for 30 to 40 years; Councilor Andrew Gaspard stressed leasing offers flexibility and noted the local office market is tight, which could limit negotiating leverage.

NOHOA representatives said the 400 building space is "tight but doable" and that the association would take any Southpointe land-sale proposal to its board. Planning Commission Chair Dave Cremons called the timing of the dermatology tenant’s departure "very fortunate" in a tight market but warned neighbors might resist a commercial storage or maintenance facility near Southpointe field.

Chirhart said Pratt has offered the city a right of first offer if the owner decides to sell and a right of first refusal if space opens, and warned the city realistically has about 60 days to act on the 400 Village Center opportunity before the space is likely taken or listed. The council scheduled further discussion at its July 16 meeting and noted staff would research legal options for purchasing NOHOA land if that path is pursued.

No formal decision on a move, purchase, or bond financing was made at the meeting. The council approved the evening's agenda at the start of the session and adjourned at 6:40 p.m.; the next regular meeting is set for July 16 at 6:00 p.m.