The Greenwood Commonwealth criticized the selection of South Pointe in Clinton as the future home of the Department of Revenue this week:
The numbers just don’t seem to add up when it comes to finding new digs for Mississippi’s Department of Revenue.
The state can buy and refurbish a building in downtown Jackson for an estimated $22 million, plus have an extra 150,000 to 200,000 square feet for other state offices, too.
Instead, it is headed toward spending $41 million for a 20-year lease.
That appears to be the outcome of a Department of Finance and Administration’s choice of a Clinton location, backed by House Speaker Philip Gunn, over the downtown Jackson Landmark Center.
The recommendation by DFA is a reversal of its earlier conclusions. Two years ago, the agency responsible for evaluating property options for state government offices said the Landmark Center was the best deal, whether it was purchased or leased, and that was before its owners cut their asking price by $6.4 million. Then again earlier this year, when DFA did its preliminary analysis on lease-only options, it ranked the Landmark location first, followed by the South Pointe complex in Clinton, where WorldCom was headquartered before the telecommunications firm went bankrupt, and another location in Ridgeland.
What caused DFA to change its mind is unknown, because the agency has declined to release the records showing what each of the three finalists put in their final offer. Those records, according to a state judge’s previous ruling, are exempt from the state’s Public Records Act.
The public is left to trust DFA’s analysis. How can it, given the political arm-twisting that has gone on?
Gunn has made it clear he wants the Department of Revenue and its 500 employees to be in Clinton, his home district. Last year, the House bowed to the speaker’s wishes and killed a Senate proposal to buy the Landmark Center. It is expected to kill a similar measure this week. Even if politics and power were not part of the equation, the whole request-for-proposal process that DFA used is flawed.
Since only the Legislature can buy a building, DFA merely looked at lease options in its final analysis. Ken Upchurch, the agency’s director, claims that leasing is cheaper than buying, but it’s hard to see how that can be true in this case, even when you add in the anticipated cost of maintenance. The state, after it refurbished the Landmark building, would still have to spend about $1 million a year on maintenance to make Upchurch’s contention true.
Also, it doesn’t appear that DFA took into account how much could be saved in rent by utilizing the additional space at Landmark for other state offices. An earlier Millsaps College study put the overall estimated savings on the downtown Jackson location at $30 million over 20 years.
Lastly, DFA apparently gave no consideration to the intangible benefits of keeping state agencies in close proximity and keeping the state capital city vital.
Sen. David Blount, a Jackson Democrat and Landmark proponent, has made all of these points, as have several Mississippi business titans, such as Jim Barksdale and Leland Speed. They make the most sense, but sense, unfortunately, does not always prevail in government.
KF note: Two little tidbits of information. The cost of each proposal is not what DFA said they were in the report published this week. The "41-51-52" numbers are the costs assigned by DFA to each proposal, not the actual cost provided by Hertz, Duckworth, or Ergon. In other words, DFA took the costs in each proposal, studied each site, and then assigned a variety of adjustments and additional costs to cover those adjustments. In other words, estimates. One source also informed JJ that the winning proposal assumed a flat rental rate for twenty years with no increases in the rents. Interesting.Greenwood Commonwealth is owned by Wyatt Emmerich.
Friday, March 29, 2013
Greenwood Commonwealth questions DOR decision.
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27 comments:
Wyatt is right on this - just as he was on the Convention Center and the Kemper plant.277
Right. The Southpointe lease is $2.8mm a year for 20 years which is $56mm without escalators , if there are any. FIFTY SIX MILLION FOR RENT??? The space in Landmark available after meeting DOR needs at 13 bucks a foot for OTHER state agencies would save the state $2.4 mm a year.
There is no mandate to consolidate. Blount's bill to strongarm the agencies and thus the Executive branch DIED.
Not sure what RINO Emmerich's position was on the Convention Center. If he predicted failure then he nailed that one because that white elephant has exceeded even the worst predictions of red ink.
Thanks Mr Happy for once again being able to brighten a room up by leaving it
I told you KF that the troops would shoot the messenger cause the message is so compelling. They are proving me correct in record time.
Finally somebody in the news media is stating the obvious. I thought Republicans were for LOWERING tax burdens!
Who shot Kingfish? Don't see it.
Greenwood Commonwealth rocks. Thank you for taking the time to study this. I am proud of (us).
This article is full of crap. Where was the Senate "Bond Bill" that would have funded a purchase of the LMC? Doesn't exist. So there was no Senate Bill to purchase the building that had any meaning.
The fact that the House passed a bill supported by Gunn to keep the DOR in Clinton is here (and many other places) been deamonized. But the fact that Blount authored a bill passed by the Senate to move the DOR into downtown Jackson in his district is presented as being a meritorious move by Blount. And they don't bother mentioning Blount's other bill to give the absolute authority to DFA to make the decisions about agency locations - guess that's because DFA didn't make the decision on DOR that Blount assumed.
Also ignored is Blount's new 'occupation' - as part of a commercial real estate company. Strange. He moved into this occupation AFTER becoming Chairman of Public Property Committee in the Senate, and shoring up downtown rents by moving DOR into part of the empty space is totally ignored, while Gunn had absolutely no financial benefit if DOR remains in Clinton.
Emerich's numbers also don't reflect the actual numbers submitted by the offers. His numbers for purchase aren't a consideration since the state has already decided - based on the recommendation of C&W from their study - that the state should lease rather than purchase.
I could go on - but I realize it is unnecessary. The Greenwood Commonwealth certainly knows what is better for the state than the professionals.
8:02 pm...the professional political a** kissers whose personal agenda trumps that of Mississippi's?
Your citing the first study before the numbers change is ridiculous.
That political games were played in the legislature either because of anti-Jackson BS or sucking up to those who are perceived to have party power is a given.
It's MATH 8:02 pm, it's MATH.
KF, please list the names of the DFA members.
We need to know who only pretends to be fiscal conservative and/or have Mississippi's best interest before their own!
"Mississippi's agenda"?? What the hell is Mississippi's agenda? Yours? Ben Allen's? Leland's? That's downtown Jackson's agenda. Mississippi's should be getting the best location that serves the purpose for the least cost.
Mississippi's agenda is not to bail out the real estate investors in downtown Jackson by taking vacant space off the rental market.
It is math, but real math, not made up crap. LMC, DTI and SP all made their proposals and were subject to the same evaluation. Lowest price wins. Simple math.
But, 10:01, the title of the Blog is Jackson Jackassery, or something like that. Jackson is all that matters. It's a small world and it's limited to a handful of people, their money and their legacy. Nothing really exists beyond the geographical limits of The Metro.
10:01 pm You apparently slept through civics as well as math if you took either.
Mississippi's and every other government's " agenda" is the best use of its available resources.
You are math challenged if you really believe that " lowest price" is the " winner" and value for the dollar doesn't matter!
And, even more math challenged if you believe SP IS the lowest price!
9;34 - evidently your civics class and mine were the same. MS's agenda is the best use of its available resources; my definition adds for the entire state, not for the benefit of a local entity or the real estate investors within a local entity.
Don't think I'm math challenged; in fact, just the opposite. Maybe we are looking at a different set of numbers. What is the source for your contention that LMC is the lowest price?
1:32 were you aware that the lease is $2.8 MM a year. A YEAR? $56mm over 20 years? The $41mm is the honkie, easy to manipulate , "grading sheet" they used. Someone please explain how buying a building for $7.6mm, putting $8mm into tenant improvements (from C and W report and JBHM), leasing the half of the building not used by the DOR AT $13.13 a foot (current metro average) to state offices currently not paying rent, which would save $2.3mm a YEAR is NOT the cheapest way for the state.......talk about RINO's!
We all know how out state government has always been biased toward Clinton. Look at all of the favors Clinton has gotten over the last 50 years. Wait...never mind.
Throw the whole process out, it's not fair because the DFA reports to the speaker of the house. Hang on, nevermind, the DFA reports directly to the Governor, who is from Brandon.
Clarion Ledger editorial today is right on, HOWEVER, the actual lease COST is $56mm, not $41mm making the case for the Landmark ridiculously compelling. DFA should be brought up on malfeasance charges.
And the 'experts' continue to roll up their britches legs and stomp sour grapes.
1:32 pm That you believe the LM supporters are interested only in the benefit to Jackson and give a whit about the developers' screams to me that your biases are making you blind to the facts.
You assume that anything that benefits Jackson or a developer is automatically bad for the state of Mississippi.
From any objective point of view, the LM is the better choice. This is about efficient use of tax dollars ( ironic since it's DOR) and efficient government operations (add to the irony).
You've fallen prey to a political strategy designed to appeal to those who hold certain fears and resentments.
Some developers are worthy of your distrust and some are not. A good place to start on this one is to compare the track records of the developers supporting the different proposals if you chose to be suspicious. Those you distrust in the city of Jackson are not involved in supporting the LM proposal. Those Jacksonians you should trust are.
This really has illuminated the farcical, hypocritical nature of Republicans that preach this line about taxes and watching out for taxpayers. Meanwhile,, let's be sure and do a bill on school prayer, personhood, or some other right wing wedge issue.
Wow. Looks like the Ledger agrees with the GC. See editorial today. This whole fiasco is why people detest government. I see now why the numbers are sealed more clearly than ever.
RINO Ben Allen has never been about protecting the interests of taxpayers ... until now. Suddenly he wants to be seen as a Tea Party member and Jackson's version of Grover Norquist.
Somebody needs to @10:24. Sure wont be Speaker Gunn!
I am a bit confused. If JBHM was the architect of record validating the Landmark selection on the first round of selections, then hired by the Duckworth team to validate the SouthPointe selection on the second, knowing full well the rehab numbers they ((JBHM) derived on round one of the process, would this not be a criminal offense, considering ring this is all PUBLIC money?
This is so strange???
9:40 I doubt it, but if true, it sure doesn't pass the smell test.
Wyatt Emmerich? He wants to expand Medicaid while remaining mute on where to raise taxes to pay for the expansion. Also didn't see Wyatt Emmerich going to court in support of Kingfish's open records efforts re: Hinds' Motorola settlement. I'd wager 97% of the state doesn't put much stock into Wyatt Emmerich's opinions.
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