Effort to consolidate state offices to ‘Capitol Complex’ fails

Legislation supporters say would save Mississippi $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.

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 Millsap.

State acquisition of the approximately 330,000 square-foot Landmark Center on East Capitol Street was a cornerstone of Blount’s consolidation plan. He envisioned the state Department of Revenue occupying slightly more than 200,000 of the building and relocated state offices the remainder.

Barring a late surprise, the winner in the competition to be the new home of the Mississippi Department of Revenue should be known any day now, state officials say.

The Department of Finance & Administration earlier this month opened the ‘final and best” lease offers from representatives of the three properties still in the running — downtown Jackson’s Landmark Center, Clinton’s South Pointe Business Park and Ergon’s Diversified Technologies Complex in Ridgeland.

An Request for Proposals evaluation team made up of representatives of the Department of Finance & Administration (DFA) and the Department of Revenue (DOR) is assessing the final offers. The final offers allowed bidders an opportunity to review and revise their proposals to reflect any changes that might be necessary as a result of the test fits and evaluations completed earlier this month, said Kym Wiggins, DFA spokeswoman. The DOR must have at least 175,000 square feet as well as an additional 30,000 square feet to house a printing shop.

The final selection decision rests with the DFA.

Leaders in both the House and Senate are eager to know the DFA’s final choice. The House this week killed a Senate-passed bill authored by Sen. Blount mandating that the state purchase the Landmark Center as the DOR home. The Senate Property Committee amended a House bill introduced by Speaker Philip Gunn of Clinton to remove South Pointe as the new DOR HQ and replace it with the Landmark Center.

With Blount’s bill dead and Gunn’s bill altered to become the opposite of what the Speaker wanted, the DFA’s selection has become immensely important, Blount said in an interview late Thursday afternoon.

With the DFA’s decision, “We’ll know what the best deal is,” he said. “We’ll know what the cost to rent is and whether to go forward with the legislation or not.”

Blount’s bill called for buying the 330,000 square-foot Landmark while Gunn’s bill specified either a purchase or lease at South Pointe.

 

 

 

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