Nov. 26 2014 12:00 AM

State moves forward with $70M bond for new Senate Building


The Michigan Strategic Fund Tuesday 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 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.

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. Officials said security, heating and cooling all need upgrades, plus there are 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 Tuesday. The Boji Group will retain the 8th and 9th floors, which are leased 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.

According to a briefing memo put together by Cook, the Capitol View Building was chosen out of five bids submitted. The Capitol View plan was the lowest cost at $16.75 square foot.

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

The incoming Senate majority leader, Arlan Meekhof, R-West Olive, 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 because the Farnum is "crumbling and worthless," but they want to sell it because "it´s worth a lot."

She said moving the Senate office space is unnecessary, considering the Senate would 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.