An effort for Capitol Complex consolidation say Mississippi — which supporters say would save $5 million a year on office leasing costs and whittle the space state workers occupy to levels consistent with federal standards — died earlier this month.
The bill authored by Sen. David Blount and backed by a Millsaps College analysis easily passed the Senate but failed to make it onto the House calendar. Blount said he will try again next year.
“I’ll continue to pursue cost and operational efficiencies,” said Blount, a Jackson commercial real estate professional.
Blount’s bill also would have handed the authority for negotiating facilities leasing to the Department of Finance & Administration, the state’s property management arm. The current practice is for each state department or agency to negotiate its own lease terms.
Further, state offices scattered around the tri-county area would have been consolidated into the Capitol Complex and moved state government closer to the federal benchmark of 218 square feet of space per worker from its current 323 feet.
Getting Mississippi to the federal standard of 218 square feet would be a 33 percent reduction that translates to the $5 million a year savings after a phase-in period, said Dr. Bill Brister, a professor in the Else School of Management who led the office space study.
The space and cost calculations include build-out expenses and parking but not actual moving costs, which the study puts at about $3 a square-foot amortized over 10 years.
Neither the study nor Blount’s bills included the relocation of state satellite offices or social service offices such as Medicaid that serve clients directly.
Blount, a commercial real estate professional and chair of the Senate Public Property Committee, said the state lacks any semblance of a planned, coordinated approach toward placement of its offices. “Our state government continues to lack any strategic plan for locating agencies, saving money and consolidating office space,” he told the Mississippi Business Journal. “Decisions are made on an ad hoc basis, often influenced by who holds the most political power at the moment.”
The Millsaps’ study identified 28 state offices occupying 198,286 square feet for relocation to the Capitol Complex, an area extending from the Old Capitol north on Interstate 55 to Lakeland Drive and over to the University of Mississippi Medical Center and west across State Street to just beyond Memorial Stadium. From there, the complex extends back south to Pascagoula Street.
Of the 28 offices, 13 are in Madison County (144,000 square feet) and nine in Rankin County (55,457 square feet). The remaining offices are in Hinds County.
The 28 offices carry total annual rent of $2.87 million, according to Millsaps.
The offices belong downtown, insisted Blount. “We need to combine and consolidate the and this is where the office space is.”
A cornerstone of Blount’s plan was state acquisition of the approximately 335,000 square-foot Landmark Center on East Capitol Street. That prospect died with the state’s selection Monday of South Pointe Business Park as the new home.
Blount had envisioned the state Department of Revenue occupying slightly more than 200,000 square feet of the building and relocated state offices the remainder.
He has not given up on state acquisition of the Landmark Center, which is one the market for $7.6 million, down from $14 million 12 months ago. “I’m looking at other options for the Landmark” that would include consolidation of state offices, said Blount. An estimate from the Mississippi Department of Finance & Administration is that the Landmark could be purchased and made ready for occupancy at a cost of $44.9 million, which includes 20-year debt service, operating expenses, security and 600 parking spaces.
A fuller rehabbing of the building would run $56 million, according to the DFA.
Blount said the state could significantly reduce either of those costs by paying cash for the building.