Tag Archives: lease

State Evaluating Bids for relocating displaced employees

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Bids under seal with state officials could move the first workers out of the Cordell Hull Building and into private office space by March of next year, reports The Tennessean.
Six firms, including Lifeway Christian Resources and Bellsouth Telecommunications LLC, have submitted offers to lease out space for 301 workers in the Department of Children’s Services. The state plans to settle on a deal no later than Aug. 19.
The offers were made last week under a bidding process that also names Jones Lang LaSalle as the state’s broker, giving the Chicago real estate firm a 4 percent commission if a deal is closed.
The Department of General Services has refused to release information about the offers — apart from the bidders’ names — until a winner is chosen and a recommendation sent to the State Building Commission. Officials maintain that the state’s open records law allows them to accept real estate bids under seal.
About 1,000 state workers currently work in Cordell Hull, a nine-story office block next to the state Capitol. Citing a review done by Jones Lang LaSalle, state officials say water persistently seeps into the nearly 60-year-old building. They say it would cost the state more than $24 million to keep Cordell Hull in service.
Lawmakers approved a state budget in April that included funding to shut down Cordell Hull, an annex called the Central Services Building, the Tennessee Regulatory Authority’s headquarters and three other state buildings in Chattanooga and Memphis.
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See also the Chattanooga TFP, which reports on six sealed bids for housing displaced Chattanooga state employees.

Nashville’s L&C Tower Owner Says State Wrongfully Broke Lease, Owes $4 Million Plus

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The owner of the downtown L&C Tower filed a claim with the state earlier this week in response to the state’s plans to sever its lease and move out of offices it has occupied in the tower since 2004, reports The Tennessean.
401 Church St., which owns the building, names the Department of General Services, the Department of Environment and Conservation and the Department of Finance and Administration as defendants in its complaint with the state Division of Claims Administration. The complaint seeks $4.15 million in potential lost rent and between $250,000 and $2 million in additional damages.
Because of the state’s new plan to condense and modernize its office space, General Services told the tower’s owners they were severing the lease agreement. But the L&C owners argue that the state needed to receive approval from the owner’s lender, CIBC, before it severed the lease agreement. No such approval was ever sought, according to the complaint.
In 2005, the state received a break on its rent in exchange for eliminating the lease provision that allowed the state to break the lease for essentially no reason. Under the most recent version of the lease, which went into effect in 2004, the state can sever the agreement provided it gives one of eight agreed-upon reasons.

Feds Paying Highest Rent in Chattanooa With No-Bid Contract

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Plans to save taxpayer money have backfired on federal officials in Chattanooga, according to the Times-Free Press.
A no-bid lease at downtown’s Warehouse Row, initially touted as a way to save on moving expenses, instead resulted in the U.S. attorney’s office paying one of the highest rents in the city.
Taxpayers will foot a $5.75 million rental bill over the 10-year term. The new offices will cost the federal government $1.35 million more than the U.S. General Services Administration’s initial estimate over the next decade and triple the amount now spent to house federal prosecutors in Chattanooga.
…For the same amount, the feds could buy a median-priced home for each of its employees within the next seven years.
The new deal has federal prosecutors paying $29.32 per rentable square foot, or about $54,521 a month, according to documents released in response to an open records request.
“They would be paying the highest rate in the city,” said David DeVaney, president of NAI Charter Real Estate. “You can find space in Chattanooga all day long at $22 per square foot, for full-service, including a generous build-out.”
The rent is more than double the previous rate in the same building — $14 per square foot — and well above Warehouse Row’s advertised lease rate of $16 per square foot.
By not using competitive bidding, federal officials ignored more than 1 million available square feet of office space downtown.

State Leasing Cars Rather Than Buying Them or Paying Employee Mileage

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Tennessee has launched a $65 million pilot program meant to cut driving costs for state workers by leasing up to 500 cars from an Orlando, Fla., vehicle-leasing firm, reports ‘Chas Sisk.
The state has signed a three-year contract with Mears Motor Leasing, a division of Bancorp Inc., to lease 500 Ford Fusion sedans for use by child welfare agents, inspectors and other state employees. Officials estimate the deal will cost the state about 33 cents a mile, including leasing costs, maintenance and gasoline.
Tennessee reimburses state workers 47 cents for each mile they drive while using their personal cars for business, and if the program succeeds, the state could shift more workers to leased vehicles.
“We’re going to try this and see how it works,” said Tom Chester, deputy commissioner for the Department of General Services, which agreed to the deal.
Mears, which specializes in leasing cars to state governments, beat three other companies for the low-bid contract, which runs through the summer of 2014. So far, 420 cars have been delivered to the state.

SBC Approves $1.1M Lambuth Lease

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NASHVILLE, Tenn. (AP) — The State Building Commission has approved a one-year lease of the campus of Lambuth University in Jackson.
The 168-year-old school closed in June after years of financial trouble and the loss of its academic accreditation. The State Building Commission agreed Friday to a $1.1 million lease of the campus with an eye toward a transfer of the property in the future.
The University of Memphis plans to begin offering classes at its regional campus at Lambuth on Aug. 27.
This year’s state budget provided for $11 million over three years to help subsidize the University of Memphis’ operating expenses while developing the Lambuth campus.