Innovative plan will build two state office buildings

An innovative new system to provide state agencies with space will be used to build two new buildings just north of the Department of Transportation.

Public Works Board Manager Dan O'Brien said they will be built by a private developer, then turned over to the state in a lease-purchase deal.

The idea: Instead of renting space from a developer, the state would use its monthly payments to buy the structures much like families purchase their homes.

Deputy Public Works Board Manager Gus Nu-ez says about a dozen builders are interested. The list will be narrowed to a group of finalists who will be asked to submit bids for the two buildings within the next two weeks. The first of the buildings is anticipated to open in July 2005.

O'Brien said it's a way to provide state agencies with the space they need in the future without bonding for every project.

"We use what we're now paying in rent to pay for the buildings," he said.

The idea is to make it as close to cost neutral as possible though it will almost certainly cost more than what those agencies are paying in rent.

"But after 25 or 30 years, we will own a building that will last at least 50 years," Nu-ez said.

O'Brien said an added benefit is that the state has final say on the design and type of construction and isn't necessarily committed to the lowest bid. He said that means if one bidder is cheaper but doesn't include the latest in energy saving heat and air conditioning systems, they can go with the bidder who does to get the long-term savings of a better building.

"It's not on dollars only," he said. "It's on how good a solution do they provide."

He said the final building will have to be efficient and cost-effective: "So it's not going to have three-story atriums in it."

The first two customers will be Human Resources -- the state's largest agency with more than 3,500 employees -- and Conservation and Natural Resources.

The natural resources building was in the original capital improvement projects list for a major new building, but the governor removed it because the state just doesn't have enough money to build it with bonds. O'Brien said the agency is currently in 10 or 11 different rental buildings and badly needs to consolidate its staff and operations.

The plan targets one of Gov. Kenny Guinn's biggest complaints about state operations -- the huge amount of leased space. State agencies lease about 1.5 million square feet of office space -- more than 650,000 square feet in Carson City -- and those monthly rental payments cost Nevada millions a year.

The lease-purchase program would allow the state to get something permanent for its money.

O'Brien said the proposal, which will go to bid later this year, is for two very similar buildings to be constructed on land the state already owns just north of the transportation buildings. One would face Roop Street, the other Stewart Street. Each would be 120,000 square feet of office space and up to six stories high.

Nu-ez said they expect more savings because one builder will do both structures at the same time.

The beginnings of the long-planned capital complex mall would separate the two structures and O'Brien said future state buildings would be constructed north of them -- eventually taking all the land between NDOT and Fifth Street except for the property already occupied by the Carson Fire Station and the Boys and Girls Club.

With a private builder taking on both projects at once, they said Conservation and Natural Resources could be in its new building by July 2005 and Human Resources in it's new home by the end of December 2005.

Both men said they intend to make this project work well enough so the design/build-lease/purchase system can be used on more projects in the future.

"We want everything to work right because I think this is going to set the tone for buildings like this in the north and the south," O'Brien said. "We just don't have the capital to go out and build all the new buildings we need."