Hundreds of state employees are poised to move off Capitol Hill by the end of 2020 so their current office complex can be razed the following year.
What happens to the site after the demolition crews leave will depend on the availability of funds, a state facilities manager told a legislative panel on Tuesday.
If the money is in place, construction will begin on a new Capitol complex building that could deliver new conference space and an area to exhibit some of the state’s historical and cultural treasures. If not, the state’s backup plan is to landscape the site and let it go dormant until it has enough cash for the construction project.
But Jim Russell, the state’s director of facilities construction and management, said the cost of relocating state agencies and replacing the 60-year-old State Office Building has dropped considerably since officials in May struck a deal to buy the American Express property in Taylorsville.
Russell shared the cost comparisons Tuesday during a presentation to the Infrastructure and General Government Appropriations Subcommittee along with the proposed timeline for the shift.
State leaders are pushing to move employees off Capitol Hill because their current office building is aging and vulnerable to earthquakes and because the complex suffers from parking shortages.
One option would be to lease space, but that would cost an estimated $399 million over the next five decades, Russell said. Renovating eight buildings that the state already owns would cost about $142 million and would require splitting agencies between different locations, he said. And constructing a new building would be about $120 million.
"So none of these were really great options, and we weren't really getting anywhere," Russell said.
Then, he learned that the owner of the American Express property at 4315 S. 2700 West was looking to sell and do it quickly. Earlier this week, the state closed on the $30 million purchase of two buildings that have a combined size of 400,000 square feet, or room for about 1,500 employees. Design and renovation could add another $77.4 million, for a total of $107.4 million, he told the committee.
"It was far and away the lowest cost option," he said.
That amount does not include the cost of tearing down the old State Office Building or constructing its replacement.
State lawmakers earlier this year allocated $56 million to buy the American Express buildings and begin the renovation process, Russell said, but completing the project will require additional disbursements in future years.
Russell said acquiring the American Express site from American Capital Healthcare Trust II of Charlotte, N.C., is advantageous because the buildings allow plenty of room for growth. The location could accommodate the State Office Building employees, the departments of agriculture and food and technology services and still have space to fit about 500 additional workers.
That could enable the state to end some of its existing leases in other buildings, saving up to $4 million annually, Russell said.
American Express will continue to lease a portion of the Taylorsville office space through March at a cost of about $260,000 month.
State employees from Capitol Hill will start moving to the American Express site within the next few months, with a goal of having about 400 relocated by the time the next legislative session begins in January to improve public access to parking.
By September 2020, the state hopes to move the agriculture and food agency to the American Express building, with the balance of the State Office Building employees shifting over by the year’s end.
The plan would be to demolish the old office building in 2021 and complete construction on its replacement by 2023, barring any holdups or funding delays.
