Bernalillo County’s possible money saving move could also cost city

ALBUQUERQUE, N.M. (KRQE) – A move Bernalillo County has eyed for years may soon become a reality, but it could also mean changes, possibly even costs for the city of Albuquerque.

Bernalillo Co.’s possible future HQ:  Alvarado Square

$2.7 million – 2017 listed purchase price for Alvarado Square.

$75,000 – amount Bernalillo County has paid towards preliminary “purchase agreement.”

March 28, 2017: BernCo. commissioners expected to vote on buying Alvarado Square.

April 17, 2017: Purchase agreement closes.

May 17, 2017: Deadline to close final sale.

2019: When county offices could move.


City-County Building

Ownership split 50/50 between CABQ & BernCo.

Built in 1982-83.

If one government sells, other gov. has first right to buy.

Current use: CABQ: 232,225 sq. ft. // BernCo.: 81,592 sq. ft. // ABC Water UA: 22,189 sq. ft.

FY17: BernCo. paid $1,083,000 in building expenses, capital improvements.

(Source: CABQ)


More Info:

Gov. Center Joint Agreement

Alvarado Square 2014 Fact Sheet

Bernalillo County’s Board of Commissioners is expected to vote later this month on the potential $2.7 million dollar purchase of the Alvarado Square building in downtown Albuquerque. County administrators are hoping the building at 4th Street and Silver Avenue will be the future home of around 1,100 county employees, and a chance to cut costs by consolidating buildings.

But if the county moves forward with the Alvarado Square plan, it would also likely vacate about a quarter of the Albuquerque-Bernalillo County Government Center, currently shared with the city of Albuquerque. If the city wants to keep the Government Center exclusively for government, it may have to act fast and shell out some of its own cash.

Albuquerque and Bernalillo County’s respective governments have shared the Albuquerque-Bernalillo County Government Center since it was built around 1983. The building is about 336,000 square feet of office space. Albuquerque city offices occupy about 232,000 square feet, the county occupies about 81,000 square feet and the Albuquerque-Bernalillo County Water Utility Authority occupies the remaining roughly 22,000 square feet.

With limited space, Bernalillo County administrators are looking at Alvarado Square, the former PNM headquarters, which has been vacant for more than two years.

“This seems like a really good deal,” said Tia Bland, spokeswoman for Bernalillo County administration.

The county has been eyeing Alvarado Square since roughly 2012 when PNM announced its own consolidation, and the building was listed for sale for $11.1 million.

“The county has had its eye on this particular building for a long time,” said Bland.

The price dropped to $6 million in 2015, but the county didn’t take action until January 2017, when Alvarado Square’s sale price was listed at $2.7 million.

On January 25, Bernalillo County administration announced it was entering into a “purchase agreement” to buy Alvarado Square. So far, the county has only committed $75,000. The county now has until April 17 to assess the building. It has until May 17 to close the $2.7 million sale. Bernalillo County Commissioners are expected to vote on whether or not they’ll let the county buy the building during a March 28 meeting.

If commissioners vote to buy the building, the county thinks it could move into Aintodo Square in 2019. The county thinks 1,100 employees could work inside of the 282,000 square foot building.

READ: 2014 Alvarado Square fact sheet, a.k.a. “request for information”

Parking is another matter, though. The county says it’s “expecting to negotiate the purchase and/or lease of nearby space for employee and public parking,” with hopes to offer “free close-by parking” for the public, and “parking that can be leased to employees.”

Why move?

The county points to two factors driving the potential building to buy.

“First, would be efficiency just in everyday operations of county government,” said Bland. “The other part of it is really customer driven.”

The county says it wants a “one-stop shop” where employees can work closer together in the same building, and where customers don’t have to drive or walk around to get to the right office space.

Today, the county says its spread out with administrative employees in as many as 12 different locations in both buildings owned by the county and space the county rents.

The county owns offices at Civic Plaza in the Albuquerque-Bernalillo County Government Center; the Rio Grande Building at 5th and Tijeras, which houses the assessor’s office; the Bernalillo County Annex building at 415 Tijeras; and the Union Square building along the train tracks near 1st Street and Central Avenue, which houses the planning and zoning offices.

“How accommodating would that be to be able to come to one building?” said Bland.

Convenience isn’t the only reason driving the county’s decision, either. Money is another major factor.

“We have a budget deficit of about $8 million right now,” said Wayne Johnson, a Bernalillo County Commissioner who will soon have to vote on the purchase.

Johnson says he hasn’t made up his mind on how he’ll vote on the deal, but he believes the county needs to find a way to cut day-to-day costs.

Administrators under the direction of Bernalillo County Manager Julie Morgas Baca think a centralized headquarters will lower the county’s day-to-day costs, but it’s unclear exactly how much.

“I think the county manager [Morgas Baca] fully expects that it will save money,” said Bland. “There’s still number crunching going on, but I think that the county has already looked at the numbers and feels fairly confident that consolidating would save money because you just have people in fewer buildings to maintain.”

Along with the idea of consolidating into Alvarado Square, the county has discussed the idea of selling some of its other properties. The county hasn’t committed to selling any specific buildings yet, but analysis presented by the county’s risk management division to commissioners in 2015 suggested that the county could earn about $11 million if it sold its two downtown Tijeras Ave. office buildings, Union Square, and its stake in the city-county building.

READ: County discussion on building sale revenue

A cost to the city?

Ownership of the city-county building is where Albuquerque’s city government might find itself shelling out cash. According to a joint powers agreement signed by both the city and county in 1988, both governments share a 50 percent stake in the building.

READ: 1988 Albuquerque-Bernalillo County “Joint Powers Agreement” on city-county building

Each government also has to right to sell their half of the building, according to the agreement. In the event that one party decides to sell their half of the building, the other party has the right of first refusal, and 60 days to make a decision. That means if Bernalillo County opts to sell its stake in the Government Center, the city of Albuquerque would have the first option to purchase the county’s stake within 60 days.

If the city refused to buy the county’s half of the building, according to the joint powers agreement, there are no stipulations as to who or what the county could sell its half of the building too.

For the city of Albuquerque to keep the building exclusively for its own government, the county’s potential divestment in the Albuquerque-Bernalillo County Government Center could mean that the city has to make a major financial investment, and potentially quickly.

When asked what the city would do if faced with the county’s divestment in the Government Center, Albuquerque’s Chief Administrative Officer equated the split to a “messy divorce.”

“It would cause a lot of incidental cost, division of property, relocation of assets, and a whole other realm of complex divisions that would have to take place,” said Perry.

However, Perry also admits that Mayor Berry’s administration will likely be out of office before any potential changes by the county. Thus far, the city of Albuquerque hasn’t made any decisions about whether or not it would try to buy the space from the county. There’s also no indication of how much it would cost.

Perry estimates there are about 6,000 city employees working in the city-county building today, or roughly “75 percent of city government,” by his estimate. If the city were able to acquire the county’s office space in the Government Center, Perry says there’s a chance that the city’s Plaza del Sol office building on 2nd Street could move in. Plaza del Sol is home to the Albuquerque City Clerk’s Office, and the planning and zoning offices.

“One of the interesting scenarios is the city would probably look at consolidation,” said Perry. “We have a large Plaza del Sol building, so we would move those departments into backfill.”

But Perry says that move would likely come at an unknown cost to the city.

“We’d have to pay the county’s money, we’d have to retrofit the space, we’d have to sell that old space, the Plaza del Sol,” said Perry. “It’s the indirect and the unforeseen costs that could be very significant.”

Other off-site city departments, including Parks and Rec and Solid Waste would likely stay put, Perry told KRQE News 13.

“More industrial or field type operations, Pino Yards — which is one of our depots for equipment — that really wouldn’t lend itself to consolidation here in the office building at city-county plaza,” said Perry.

When asked if he saw any potential cost savings of absorbing the county’s office space, Perry said, “I don’t see how the city would have any significant cost savings to the taxpayers. I think that there would be costs associated with the move.”

Meanwhile, Bernalillo County administration sees a more optimistic outlook for both the county and the city.

“It could be a win-win for both entities,” said Bland. “I believe that there are probably a lot of city offices that are not located in this building and bringing some or more into this building may create some efficiencies for them too, but certainly the city will have enough time to do an assessment and figure out whether or not they would want to utilize this space.”

Beyond the public knowledge that the county is looking for its own building, the county says Albuquerque city government hasn’t been part of the discussion about the county’s possible move, thus far. The county says it would consider roping the city in, eventually.

“Once we get beyond the county commission actually voting to allocate money toward this project, then it might make sense to perhaps have formal meetings with the city to talk about a transition,” said Bland.

Commissioner Wayne Johnson told KRQE News 13 says the county’s impact on the city should also be part of the consideration in moving.

“We do have an obligation to look at it from their perspective,” said Johnson. “If we do choose to purchase the building, how can we make it as painless for the city as it possibly can be? And how do we make it painless and cost-effective for county residents as well?”

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