Tennessee official says state should sell two Chattanooga offices

Tennessee official says state should sell two Chattanooga offices

November 9th, 2012 by Andy Sher in Local Regional News

The State of Tennessee Office Building could be up for sale if the Legislature approves the plan.

Photo by Staff File Photo /Times Free Press.

The James P. Mapp Building houses state offices on M.L. King. Boulevard.

The James P. Mapp Building houses state offices...

Photo by Jake Daniels /Times Free Press.

Illustration by Laura McNutt /Times Free Press.

NASHVILLE - A top Tennessee official is recommending to Gov. Bill Haslam that he sell the State Office Building and the nearby James R. Mapp Building in Chattanooga.

The buildings near downtown are among six statewide that General Services Commissioner Steve Cates says are "functionally obsolete" and should be sold given costs for renovation and operations.

The estimated price tag for fixing the seven-story, 47,269-square-foot Chattanooga State Office Building is $8.49 million. The iconic 58-year-old building, at 540 McCallie Ave., was originally owned by Interstate Accident and Life Insurance Co. A west wing was added in 1970.

The Mapp Building is at 311 M.L. King Blvd. in Chattanooga. Built about 20 years ago, the 75,445-square-foot building has structural problems requiring $3.5 million to correct.

The buildings are among six across the state proposed for sale. Three of the buildings are in Nashville and the sixth is in Memphis. Haslam said Thursday he has made no decision and will have to weigh cost-savings against the "impact on the community as well" on all six structures.

"I've been a mayor and I understand it's one thing to say we're going to move out of this building, but if its part of the fabric of the town in a way that would hurt, that's something we have to evaluate," Haslam said. "So we have both the community's interest and Tennessee taxpayers' interest."

Cates told Haslam on Wednesday during budget hearings that after months of review following a consultant's recommendations, he has concluded "the useful life of six of our buildings have come to an end."

He said he is proposing "we put those buildings up for sale. They don't have a large value, but we do think that they should be put up for sale. Our analysis has estimated values for those."

In response to questions from Finance Commissioner Mark Emkes on whether he believes there will be interested buyers for the buildings, Cates said, "at the price that's in the analysis, yes." He later noted the value of the land could be more than the actual buildings.

Emkes likened the situation to buying a new car versus putting money into repairing an older vehicle.

Cates spokeswoman Kelly Smith declined to address a Chattanooga Times Free Press request for state estimates on the local buildings' values, saying, "this is simply a proposal. We won't have any additional information until the budget is presented to the Legislature."

In September, the Times Free Press reported that consultants were questioning continued use of the buildings, saying they were costly and inefficient to maintain.

According to the consulting firm Jones Lang LaSalle, the State Office Building needs some $7.9 million to replace heating, ventilation and air conditioning systems. It has several other issues as well and is inefficient to operate. The state paid $5.85 million for the building in 1981 and renovated it 20 years ago.

Fixing foundation problems at the Mapp Building would cost $1.5 million.

Both buildings collectively house 589 workers in agencies ranging from offices for the State Attorney General's Office to state Department of Environment and Conservation.

Haslam's decision will be reflected in his upcoming state budget recommendations to the General Assembly for fiscal year 2013-14.

House Majority Leader Gerald McCormick, R-Chattanooga, recently said lawmakers should review the issue. If the state doesn't want the State Office Building, McCormick said, it might be suitable for student housing "because it's so close to UTC."

And if not the University of Tennessee at Chattanooga, he said, "I think you'd see some local people step in and make housing out of it."

Asked Thursday if the state would construct new buildings or lease space should he follow Cates' recommendation, Haslam said, "We're not that far.

"So I think we [governor's office] come in and look at, can you sell it? If not is there something else you can do with that building? Its part of our double fiduciary responsibility, both to the taxpayers and to the communities that we work in."

Contact staff writer Andy Sher at asher@timesfreepress.com or 615-255-0550. It's General Services' job to say, 'Hey, for us to fix this, to meet codes, to fix HVAC, look at all the different issues that need to be addressed, its going to cost us x million and that's way more than that space is worth. As the people responsible for providing space for the state, we can't recommend we do that.'