State to study area leases on buildings

At a recent meeting of the Workforce Investment Board of Southeast Missouri, Mitch Robinson of Cape Gir?ardeau Area Magnet spoke about an effort to find new quarters for the agency away from the Marquette Building on Broadway in Cape Girardeau.

That search, however, was stopped by the state Office of Administration, which provides the board's employees with offices in the state-leased space in the Marquette. The lease at the Marquette doesn't expire until 2014, and the state can't allow the taxpayers to pay for empty space, administration commissioner Mike Keathley said in a recent interview.

"I'm sorry if the local Workforce Investment Board doesn't like their quarters," Keathley said. "But they can't change that on their own."

While no state offices will be moving from the Marquette, the issue of where to house state agencies in Cape Gir?ardeau County will be the subject of a study in coming months. It is part of a statewide effort to determine whether it is better for taxpayers to own or rent space in counties with multiple offices. The state leases 184,248 square feet in Cape Girardeau at a cost of more than $1.7 million annually.

Of that, about 62,000 square feet of space is in facilities that would be difficult to move, such as the state crime lab on South Ellis Street or the Cottonwood Treatment Center on North Sprigg Street.

But leases on 61,470 square feet used for agencies ranging from the Division of Child Support Enforcement to the Division of Probation and Parole or the Missouri attorney general will expire by June 30, 2010. Of those leases, agreements on 51,000 square feet, costing $544,000 annually in rent, will expire by June 30, 2008.

Keathley began the process of evaluating the state's real estate portfolio soon after being appointed to the post by Gov. Matt Blunt in 2005. So far, the Office of Administration has reviewed the major markets for state agencies -- Kansas City, Jefferson City and St. Louis -- with 89 leases terminated, resulting in an annual savings of almost $15 million. Those savings have been used, in some cases, to finance the purchase of office space and other facilities.

Now it is Cape Girardeau's turn, along with Springfield, St. Joseph, Joplin and Columbia.

"Whether we lease, own or consolidate will vary from place to place," Keathley said. "There is no one decision that fits any one town."

The evaluation will be finished, and a plan established, by the end of 2008, Keathley said. "Consolidation may not mean down to one location," Keathley said. "That may not be favorable."

The decisions on where individual agencies need to be, Keathley said, will be based on the services they provide, who needs those services and the most effective place for meeting those needs.

Keathley, who calls Dexter home, recently met in Cape Girardeau with area leaders, including Mayor Barbara Lohr of Jackson, Mayor Jay Knudtson of Cape Girardeau, chamber of commerce representatives, administrators of area state offices and others, including state Sen. Jason Crowell.

Confusion over authority

No decision was reached, Crowell said, but community leaders laid out their concerns and Keathley responded by describing the process that will be followed.

"We know where the state is locked into leases for office space and what leases are coming up," Crowell said. "There is a lot of confusion on whether the state has the authority or power to break existing leases."

Technically, the state does have that power. Every lease is written as a one-year deal with options for renewal for a set period of years, Keathley said. But barring a dramatic reason to break a lease, such as the failure of a landlord to maintain the property, the state will not end a deal early, he said. Doing so would undermine the state's credibility as a tenant, he said.

"The state has never backed out of one of these leases, and it is not going to," he said.

While no firm decisions have been made, Knudtson said he's convinced that the study and the resulting decisions will be handled in a professional, not a political, manner.

But Knudtson said he came away with a firm impression that scattered state offices will be brought together. "The state is littered with independent services and independent leases and ownership situations and that is simply not cost-effective," Knudtson said. "There will be an element of consolidation."

Cape Girardeau Area Chamber of Commerce president and chief executive officer John Mehner said he told Keathley that the chamber will help to make contacts with landowners with buildings that would fit the state's needs.

"What we offered them, on the way out the door, was to use us from a facilitation standpoint," Mehner said. "We know who to contact, and we obviously know the area. But they have to know who they are serving and where they are coming from and do they want to lease or buy."

All options are open, Keathley said. The Marquette building and the adjacent Marquette Center, for example, are on the market for $4.5 million and $1.4 million, respectively. The federal courthouse, across Broadway from the Marquette, will be empty soon. While Cape Girardeau County is looking at using the federal courthouse, county officials are hoping to acquire it for little or no cost.

Two concerns will guide the process, Keathley said. The first issue will be money. If it is not possible to move offices to new quarters or buy a building without increasing annual spending, he said, offices will stay put.

Keathley promised, Knudtson said, to keep politics out of the decision process.

In the past, Keathley said, politics was at times the most important part of the process. "In a lot of prior administrations, leasing was about who you knew," he said. "I am about what is the best thing for the citizens and the taxpayers."

rkeller@semissourian.com

335-6611, extension 126