State Contracts for Office Space Management; Projects Savings

The state is outsourcing the management of its portfolio of its office properties, a move that will require about 125 employees to apply for jobs with the vendor taking over that work, reports The Tennessean.
Officials expect to save roughly $50 million over the next five years from Chicago-based real estate services firm Jones Lang LaSalle taking over facilities management for 10.5 million square feet of state-owned and leased office properties statewide starting July 1.
Under a previous contract, Jones Lang LaSalle conducted an assessment of 33 major state properties that led to the recommendation that the state should reduce its footprint to 1.4 million square feet by the second quarter next year.
That will come from a combination of moving some employees to space in underutilized state-owned buildings and completely leaving state-owned properties deemed as too costly to maintain and operate.
“We’re having an expert handle the facilities management for us,” said Steve Cates, the state’s General Services commissioner, who in addition to the $50 million in savings sees Tennessee avoiding $25 million in one-time costs, plus $3 million annually, by not having to purchase and maintain the necessary technology and equipment, as well as set up a call center.
…Under the five-year contract, Jones Lang would be paid a management fee of up to $5 million a year. The company also will continue to help General Services with business
analysis to determine whether to spend on buildings and capital projects across the state.
The affected state employees were informed last month the state would no longer be employing people in job categories such as facilities administrators, facilities managers and building maintenance workers. They’re eligible for interviews for positions available under the new operating model, said Peter Uber, a Jones Lang managing director.

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