BE IT RESOLVED, that the County Administrator be authorized to terminate Lease Agreement A10419 with Blue Horn Properties, LLC, for property located at 1201 East Lake Street, Minneapolis; and

BE IT FURTHER RESOLVED, that the County Administrator be authorized to terminate Lease Agreement A030869 with Blue Horn Properties, LLC, for property located at 3015 12th Avenue South, Minneapolis; and

BE IT FURTHER RESOLVED, that the County Administrator be authorized to terminate Lease Agreement A061452 with HECCL, LLC, for property located at 6040 Earle Brown Drive, Brooklyn Center.

Hennepin County Human Services and the Department of Community Corrections and Rehabilitation (DOCCR) lease space in a variety of locations. The pandemic and resulting remote workforce created an environment of rapid technology and business process innovation. This allowed the county to continue to meet residents’ needs in flexible, efficient ways that value quality interactions with residents. The capability to serve residents remotely results in a reduced need for facility space. 

Hennepin County Human Services proposes a reduction in facility utilization and termination of lease agreements. The new model focuses on:

1. Utilizing the county’s six Human Service Centers that provide a large facility footprint to leverage services throughout the county.
2. Maximizing county owned spaces.
3. Safe and efficient interactions with residents in county spaces or in the community by moving towards an appointment-based model.
4. Leveraging technology when and if possible, to facilitate ease and accessibility for residents.

If approved, the county will end the Human Services lease at the following location:

1201 East Lake Street, Minneapolis

County Occupant – Human Services: Office of Multicultural Services

Lease - A10419

Rentable Square Footage – 10,000

Landlord – Blue Horn Properties, LLC

Expiration Date – 1/31/27

Termination date – 06/30/21(includes 90-day notice)

Net saving from termination – $1,304,700 ($19,429/month x 67 months)

Similarly, DOCCR restructured services and reentry plans due to the COVID pandemic. This increased community and remote working; resulting in a need for fewer facilities. If approved, the county will end the DOCCR leases at the following locations: 

3015 12^th Avenue South, Minneapolis

County Occupant – DOCCR: Juvenile and Adult Probation

Lease - A030869

Rentable Square Footage – 11,400

Landlord – Blue Horn Properties, LLC

Lease Expiration Date – 12/14/23

Termination date – 2/28/21(includes 120-day notice)

Net saving from termination – $792,271 ($23,650/month x 33.5 months)

6040 Earle Brown Drive, Brooklyn Center

County Occupant – DOCCR: Juvenile Probation

Lease – A061452

Rentable Square footage – 7,390

Lease Expiration Date – 01/31/25

Termination date – 4/30/21 (includes 120-day notice)

Net saving from termination - $470,067 ($10,438 per month x 45 months)

The total net savings from termination of leases is $2,567,038. DOCCR and Human Services continue to evaluate space needs and may suggest additional lease terminations in the future.   

Current Request: This request seeks authorization to terminate leases A10419, A030869, and A061452.

Impact/Outcomes: Termination of these leases would allow the county to vacate unoccupied space and save $2,567,038 over the terms of the leases.