New digs

State moves forward with $70M bond for new Senate office space

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TUESDAY, NOV. 25 — The Michigan Strategic Fund this morning started the ball rolling on a plan to purchase most of the Capitol View Building, which is across Allegan Street from the Capitol, for new Senate office space.

The cost of purchasing all but the top two floors of the Capitol View is expected to be $51 million, but the Michigan Senate is asking the fund to sign off on $70 million in bonds to cover any unexpected future costs and prevent the state from having to go into the market twice, Secretary of the Senate Carol Viventi said after the meeting.

Senate Majority Leader Randy Richardville, R-Monroe, has been looking for more than a year to move the Senate out of the Farnum Building, which is 55 years old and in need of major renovations.

First of all, the security setup in the Farnum is not ideal. The heating and cooling of the building has long been a complaint. The building also has asbestos concerns.

Pending approval of the fund next month, the state will purchase the basement floor up to the 7th floor of the Capitol View at 201 Townsend (across the street from the Post Office) from the Boji Group of Lansing, Richardville chief of staff Jordan Hankwitz told the Michigan Strategic Fund today. The Boji Group will retain the 8th and 9th floors, which are currently used by the Dykema Law Firm.

The Senate will then lease the space from the state of Michigan, paying back the bonds over a 30-year period. The arrangement is similar to how the House Office Building and the Cadillac Place renovations were set up, said Chris Cook, Business Capital Relationship Manager for the Michigan Economic Development Corporation.

The tentative timeline for moving the Senate offices is December 2016. The current tenant, the Department of Community Health, will need to find new space and renovations will need to be done to construct the needed floor plan.

According to a briefing memo put together by Cook, the Capitol View Building was the chosen location for the Senate out of five bids submitted. Four were considered contenders and were examined and judged by five Senate staffers on a 100-point scoring system that looked at price per square foot and how well a bidder met certain needs.

The Capitol View plan was the lowest cost at $16.75 square foot and scored the highest by the independent panel led by Viventi. A Senate Fiscal Agency staffer, two staffers from the Senate purchasing department and a physical properties staffer also made up the committee.

The other three plans on the table included:

- A new construction on the site of the current Constitution Hall parking lot, at the corner of Allegan and Walnut. The Sam Eyde project of a Class A, LEED certified building would have been completed April 2016. It would have included a glass faade with 32 identical size suites. This was the most expensive project, however, at $24.50 to $25.50 per square foot.

- Renovating the 57-year-old Lansing City Hall at 124 W. Michigan through The Christman Company and Paul Gentilozzi. This $17-per-square-foot plan offered more parking spots than the others and had the state moving into a building next door to the House Office Building by September 2016. But the plan would have required Lansing City Council approval and would have given the Senate more space than it needed. The corner of the property is also a public square with deed restrictions and easements.

- Renovating the Farnum at 125 Allegan at a cost of between $19.95 and $21.95 per square foot. However, there were historic constraints that sank this proposal with Viventi's committee. Also, it would have required the Senate to be temporarily lodged at Prudden Center, about a mile away, for a year, which would be inconvenient for public meetings and would have meant Senators being shuttled back and forth to the Capitol.

After the fund acts, Richardville and Viventi can move forward to finalize the deal by signing the lease agreement next month.

As far as the Farnum, which was recently appraised at $5.4 million (parking lot at $225,000), a bill previously passed by the Senate that allowed the chamber to take possession of the Farnum and sell it, will be left to die in the House. The Senate bought the building in 1978 for $3 million, according to the Senate Fiscal Agency.

Richardville introduced a new bill this week, SB 1149, that moves ownership of the building to the Department of Technology, Management and Budget, who will be able to sell the building in order to cover the initial $7 million in costs associated with moving to the Capitol View.

The incoming Senate Majority Leader, Sen. Arlan Meekhof, R-West Olive, said he believes Richardville is "moving in the right direction" with this project.

"The current building has a large amount of upgrades that are needed," he said. "This plan will be leased out over a period of time and save the taxpayers money in the long run."

But Senate Minority Leader Gretchen Whitmer, D-East Lansing, said something about the deal "doesn't smell right" in that the Senate leadership wants to move out of the Farnum because it is "crumbling and worthless," but they want to sell it because "it's worth a lot."

She feels the whole push to move Senate office space is completely unnecessary, considering the Senate owns the current building, pays nothing and will begin coughing up lease payments.

"Unless you're making a profit off it, I don't know how you can say that it's a good idea," she said. "For the Legislature to spend money on itself is totally out of touch."

Whitmer used to have an office in the Farnum. Asked about the conditions within the building, she said, "Considering the classrooms we're forcing our students to try to learn in, the Farnum Building is luxurious."

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