Work has begun on a $21 million state office building north of Little Lane between Roop and Stewart streets.
The 120,000-square-foot building will house the Department of Conservation and Natural Resources.
Work to clear the nearly five-acre parcel has been progressing for the past few weeks.
Gov. Kenny Guinn and other state officials broke ground on the building on Monday.
"In 2002, we paid $22 million in rent for state agencies for about 1.5 million square feet of office space," said spokesman Greg Bortolin.
"What's going to happen with this building is that, instead of paying rent money down the drain, we are taking that rent money and putting it toward a building," he added.
Bortolin said both the governor and State Treasurer Brian Krolicki have been concerned that state money is being expended on rent.
"This is something both the treasurer and the governor have advocated," he said. "At the end of 27 years, the state will wind up with a $100 million building."
Construction of the building will be funded by selling certificates of participation. Jacobsen Construction will complete the construction and then a nonprofit corporation set up by the state will lease it back. At the end of the lease, the building will belong to the state.
The plan was approved by the Board of Examiners and the Legislature's Interim Finance Committee in January.
The money for the building will come from funds the state now spends on rent.
Construction of the new building should be completed by May 2005, in time to for the department to move July 1, 2005.
State Public Works Board Manager Dan O'Brien said the move-in date coincides with the expiration of leases in buildings the department now occupies.
Initial discussion involved two buildings occupying the land north of the Nevada Department of Transportation offices, but the Legislature approved only one.
"They wanted to see how it all works out before they approved the second building," O'Brien said.
Contact Kurt Hildebrand at hildebrand@nevadaappeal.com or 881-1215.
