Nielsen Builders Harrisonburg Virginia

Daily News Record
Wednesday, October 24, 2007

SRI Agreement Before Supes

$20 Million Loan Proposed For Non

By Jenny Jones

The Rockingham County Board of Supervisors will hold a public hearing tonight to secure a loan of up to $20 million to construct a building for SRI International.
The hearing also will address a lease agreement between the county and SRI that will take effect once the building is complete.
Supervisors will hold the hearing during their meeting at 6 p.m. in the boardroom of the Rockingham County Administration Center, 20 E. Gay St., Harrisonburg.

Construction Plans
The county plans to secure the loan through its Industrial Development Authority.
The authority will hold a public hearing on the matter at 8 a.m. Tuesday in the boardroom of the Rockingham County Administration Center.
The IDA will take out the loan and then give the money to the county to construct the first phase of a building for SRI International.
SRI International, a California-based nonprofit institute, announced plans in December to locate its new advanced drug research facility to Rockingham County.
Nielsen Builders HOK will build the facility in the Rockingham County Center for Research and Technology, located along U.S. 11, just north of Harrisonburg.
The building will include laboratory and office space for SRI, which conducts research for government agencies, businesses and other entities.
The county is set to break ground on the first phase - 40,000 square feet-Dec. 3, according to Deputy County Administrator Stephen King.
Phases two and three, which could bring the buildings total square footage up to 100,000, will be built when the company needs them, he said.
The first phase is expected to cost $17 million to $18 million, King said. The county is requesting a loan of up to $20 million in case costs are higher than projected, he said.

SRI Lease Agreement
The county will pay off the loan through a 30-year lease agreement with SRI International, according to County Administrator Joe Paxton.
The lease agreement with SRI includes a payment structure of $28.20 per square foot for the first year, or $1.1 million.
The rent will increase by $3 per square foot annually, every five years, Paxton said.
The agreement also gives SRI International an option to purchase the building, he said.
King said he doesn't anticipate SRI buying the building any time soon because, as a nonprofit, the company doesn't have a lot of money on hand.
"They really operate based on grants and contracts," he said. "That's why they can't afford to build the building" themselves.
It will be several years before the county makes money off the deal, Paxton said. But once it does, the return will be "significant," he said.

-Dan Wright

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