Gov. Bill Haslam’s repeated claim of $100 million in taxpayer savings through private management of state buildings through a contract with Jones Lang LaSalle appears inflated, according to a WTVF-TV report. The actual savings, the station suggests, is around $20 million – and maybe less than that.
It was a claim that the governor’s chief of staff, Mark Cate, repeatedly emphasized to the legislature’s Fiscal Review Committee back in July.
“So 10 years, $100 million,” Cates said. “That’s actually net savings after getting out of leases, consolidating space — all of that nets out to $100 million of net savings over that time period.”
But our investigation discovered that, a full three months before that testimony, the administration had an internal estimate showing that the actual “T3 Savings” were $43 million — a lot less than the administration’s $100 million claim.
“It gives the appearance that either he had faulty information, he was given faulty information, or he was dishonest,” said committee member Rep. Brenda Gilmore, D-Nashville.
We also showed Gilmore more recent internal estimates showing that Project T3 will save even less than expected and cost even more, resulting in net savings of just $20 million dollars.
That’s $80 million short of what the administration has claimed.
…The Haslam administration said that the decision to get rid of older state buildings like the Cordell Hull — a process called “decommissioning” — makes those savings more complicated to track.
“You can’t separate decommissioning from T3, as we would have increased the occupancy in those six buildings had they not been deemed functionally obsolete,” General Services spokesperson Kelly Smith said in an email.
But our analysis discovered that when all the spending associated with decommissioning is factored in, according to the administration’s own numbers, the total operational savings are just $4.5 million over 10 years. That’s $450,000 a year. (To get to $100 million, the administration counts $85.5 in deferred maintenance that might be needed on those buildings and $10 million from the sale of the buildings.)
In addition, after we asked the Haslam administration to show us where it gets the savings they are counting on, they gave us a list of what was supposed to be canceled leases.
It’s a list that, in some cases, was pure fiction.
Take, for example, a building in South Nashville. The administration’s list takes a lease canceled for the Department of Labor and counts it twice, showing almost $1 million extra in savings.
The list also includes a canceled Department of Health lease at a Knoxville building, saving $1.3 million.
In fact, that lease has not been canceled.
And it claims savings of half a million dollars by closing a Department of Safety office in Chattanooga.
It doesn’t count a new lease for a bigger building that will actually cost $1 million more.