This schedule shows the cost of buying the subject property. The Frontier leases are shown as being terminated at their expiration, so there are lease costs until a move out of the Frontier building. The rental income from non-state tenants declines over the years as current leases expire or are bought out. The detail of these leases are proprietary and cannot be disclosed. It assumes that no existing tenants will exercise available exclusive options to renew their lease.
Some leases have multiple extension terms.
This assumption is the critical factor in the department's buy scenario. The timeline of expiring leases in the Frontier building and the need for comparable available space in the subject property dramatically impacts this scenario. This would be offset in part, however, by the revenue from tenants in the new building. See page 16 for a graphic depiction of the availability of space, in the best case and worst case scenario, in comparison to need. While it is uncertain at this point whether a separate fund will be establish to actually accumulate these reserves, it is a legitimate cost element to consider in the operation of the facility.