State seeks proposals for new Department of Revenue HQ

In a clear sign that state leaders have decided against further delays in getting the Mississippi Department of Revenue out of its metal warehouse headquarters in Raymond, the state has issued a request for proposals to building owners interested in leasing to the department.

The move represents a change of heart by state leaders who last legislative session rejected a proposal to move the Revenue Department’s headquarters into the 353,898 square-foot Landmark Center at 175 E. Capitol St. The state was to buy the building for $14.1 million and refit it over a three-year period at a cost of about $30 million to accommodate the 400 or so employees of the DOR.

The RFP follows comments to the Mississippi Business Journal by Revenue Commissioner Ed Morgan last month that key leaders have pledged to make a selection in 2013 that would get the Revenue Department out of the warehouse it has occupied in Raymond for nearly two decades. The DOR’s lease on the Springridge Road building expires at the end of 2014.

The new RFP sets a 2 p.m. deadline on Dec. 4 for proposals and limits the eligible buildings to properties of at least 175,000 square feet in Hinds, Rankin and Madison counties. To qualify, the building must have 15,000 of ground-floor space to accommodate a print shop and an additional 15,000 square feet of ground floor space for customer service. The remaining floors must have at least 145,000 square feet.

The RFP would give “preference” to a building with an additional 20,000 square feet of warehouse space on the ground floor as well as an additional 13,000 square feet for general office use. The remaining floors would need to provide at least 112,000 square feet.

For parking, the RFP mandates 550 spaces and at least one space or pull-off area large enough for a tractor-trailer.

The move-in date for the Department of revenue would be July 1, 2014, according to the RFP.

A short-list selection of prospective properties is to be issued on Dec. 18.

The Mississippi Department of Finance & Administration and the DOR will make the final selection. Commercial real estate firm Cushman &Wakefield of Georgia Inc., as agent for the state, will take part in lease negotiations.

The state wants proposals that are “all-inclusive” and specify the building owner will cover any construction, design, tenant improvements and infrastructure improvements.

The rejection of the Landmark Center in the final hours of the 2012 Legislature disappointed Ben Allen, president of Downtown Jackson Partners, and other supporters of downtown. Allen alerted business and civic leaders to the RFP Monday with an email blast that carried the subject line: “All Hands on Deck.” In a follow-up email, Allen said he is pleased the state is getting the word out on the RFP.

“Last time around, the DOR was going to move to Lakeland Drive, and no one even knew it until the last minute. We have several realty people, I am sure, submitting for places in and out of downtown Jackson,” said Allen, whose public-private agency works to promote and enhance downtown.

Along with the Landmark, the former WorldCom headquarters, now called South Pointe, is certain to gain consideration.

Both buildings will lose major tenants in the next few months. Leasing agents for each would like nothing more than to secure a long-term lease for a couple hundred thousand square feet from the DOR.

Downtown’s Landmark will lose AT&T by the end of the year to the 111 Capitol Building and Clinton’s South Pointe will lose ADP with the company’s relocation of operations to Augusta, Ga.

Revenue Commissioner Morgan said he has not been part of any facilities reviews lately but knows the governor, lieutenant governor and House speaker are weighing options. “They are moving toward making a decision on solving the problem during the next legislative session,” Morgan said in an interview in October.

 

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