Leasing costs worry Guinn

Wednesday, July 14, 1999 | 12:32 p.m.

CARSON CITY -- Gov. Kenny Guinn is unhappy the state is spending $17 million a year to lease office space from private landlords.

He says he is going to develop a master plan to present to the 2001 Legislature for housing state workers.

His comments came Tuesday as the state Board of Examiners, of which he is chairman, approved 14 more contracts for agencies to lease space around the state at rates that range up to $1.85 a square foot.

The state Health Division, for example, is renting space for its cancer registry program and its special children's clinic at 3811 West Charleston Blvd. in Las Vegas at $1.85 a square foot and the price escalates to $2.15 by August 2006.

State Budget Director Perry Comeaux said after the meeting there was a $10 million state general office building planned for Carson City for this year but the prisons and the University and Community College System of Nevada ate up most of the construction budget.

The 1999 Legislature approved $207.2 million in capital improvement contracts. That includes $12.1 million for a new Highway Patrol office building in Las Vegas and $1.7 million for remodeling the old courthouse in Carson City for attorney general offices.

Attorney General Frankie Sue Del Papa, an examiner's board member, said she would like to see a report on which agencies are leasing private office space and the prices.

Guinn said the state didn't have the money to finance an office building. But he's got some ideas.

The state, he said, has land. It could contract with a developer for a new building, lease it for 20 years and then end up with the structure. This would not be that expensive, Guinn said, because the state owns the land.

But he said it must ensure that this leasing agreement doesn't go against the state's bond debt rate, which is 2 percent of the assessed valuation.

The state hasn't constructed a major general office building since the Sawyer State Office Building in Las Vegas, which opened six years ago.

Mike Meizel, administrator of the state Buildings and Grounds Division, says agencies lease more than 1 million square feet of space from private businesses. In practically every town or city, there's a lease.

In Carson City alone, the state rents more than 440,000 square feet. He said the amount of leased space in Las Vegas is just below that.

Meizel's agency is the one that negotiates most of the leases. "Vegas is the highest at $1.50 to $1.85 a square foot. There is so much business they can name their own price," he said of the landlords in Southern Nevada.

Prices in Carson City range from $1.15 to $1.25 and rents in Reno are about $1.50 a square foot.

"We're making some people rich," Meizel quipped.

Comeaux, chairman of the state Public Works Board that recommends the construction projects, told the examiners board he is going to bring Meizel, State Public Works Board Manager Eric Raecke and state Lands Division Administrator Pamela Wilcox together for a comprehensive report.