Littleton council advances Wells Fargo office lease amid projected 2027-28 budget gaps

Littleton City Council voted 7-0 Tuesday to authorize the city manager to sign a letter of intent with South Metro Housing Options for office space in the Wells Fargo building, as staff also warned the city faces projected general-fund structural gaps of about $2.2 million in 2027 and $1.7 million in 2028.

Staff presented the Wells Fargo proposal as interim "swing space" tied to a broader facilities master plan and future work on city buildings, not as a permanent solution to the city's space needs. The council packet says the proposed deal would cover about 9,962 square feet on the building's fourth floor under a full-service lease at $15.50 per square foot with 3% annual increases. The packet estimates total rent over 10 years at about $1.98 million, plus one-time moving, technology and furniture costs.

According to the same packet, the lease would include property taxes, insurance, maintenance and common-area costs, and often utilities and janitorial service. Staff told council the space would most likely house community development functions as a "Littleton Development Center," relieving crowding at Littleton Center and giving the public a more accessible place to meet with staff.

Staff said during the meeting that Littleton Center was designed for about 100 occupants in 1975 and now holds roughly 226 employees, with offices carved out of storage and former meeting areas. They said the city wants temporary space both to ease current overcrowding and to create room for future building work.

Council members questioned why the city might commit to a 10-year term for space described as temporary. City Manager Michael Penny said a longer term would lower long-run cost compared with shorter arrangements while still giving the city flexibility as it studies renovations and longer-term facilities options. Staff also said the final lease is expected to include a nonappropriations clause allowing the city to exit if a future council does not appropriate money for the lease.

The exact exit terms are not yet final. Staff said Tuesday that a shorter structure — including a possible five-year term or five-year option — had been discussed but not yet negotiated. The council action approved only the letter of intent, not a final lease contract.

Staff also linked the swing-space decision to planning around the Bellevue Service Center and other city facilities. They said the city does not yet know how many employees could be displaced or affected as Bellevue planning advances, which is one reason they want flexible interim space while the facilities master plan is completed.

The lease discussion came alongside a broader warning on city finances. In a budget update to council, staff said Littleton's general fund is structurally unbalanced in the next two years, with slower-than-expected retail growth and delayed sales-tax revenue from Mineral Place worsening the outlook.

Finance staff said they plan to bring forward targeted adjustments to known general-fund costs, continue vacancy management, review historically unspent budget authority, and use eligible restricted funds before relying on the general fund. Staff said their goal for the 2027 budget is no layoffs and no permanent staffing or service-level reductions.

Staff cautioned that avoiding permanent cuts does not mean there would be no effects. Penny said temporary impacts could come from holding vacancies open longer or deferring some one-time projects. Staff also said they want to preserve competitive pay if possible, though broader options such as furloughs or other reductions could come into discussion if the gap grows.

What remains unresolved is which specific cuts, savings or revenue measures will be proposed to close the gap. Tuesday's presentation outlined categories of strategies but did not include a detailed package of reductions or revenue changes for council approval.

More detailed lease terms and budget options are expected to return as Littleton moves through its 2027 budget process.