ARIZONA STATE SENATE
Phoenix, Arizona
FINAL
REVISED
governmental mall office
buildings
Increases from two to three the number of buildings for which the Director of the Department of Administration (DOA), subject to the approval of the Joint Committee on Capital Review (JCCR), may enter into lease-purchase agreements.
According
to DOA, state-owned space on the Capitol Mall is currently 99.93 percent
occupied, virtually prohibiting further expansion on the mall in state-owned
buildings. Additionally, if current
growth trends continue, DOA estimates that an additional 950,000 square feet of
office space will be needed within the next decade. Because of the lack of existing state- owned space, any expansion
would have to be accommodated through private sector leases. The state
presently spends $10.5 million per year for leased space; this is expected to
grow by $1 million annually under current projections.
In
2000, S.B. 1063 granted authority to DOA to enter into lease-to-own agreements
for two buildings (Department of Environmental Quality and Department of
Administration)
The
proposed 170,000 square foot facility will consolidate seven operations of the
Department of Health Services (DHS).
The proposal will encompass the relocation of approximately 150,038
usable square feet of DHS lease space and operations located in DOA lease
purchase buildings.
Similar
to the development of the first two buildings, DOA will issue a request for
proposal to the development community for the planning, design, construction,
operation and maintenance of the building.
Proposers will present their respective plan with an accompanying lease
cost for the term of the lease. DHS
will make annual lease payments for the term of the lease to the
developer/manager. At the conclusion of
the lease term, the state will own the building.
While
prospective lease payments should be covered by the redirection of existing
lease payments, the fiscal impact of this legislation is unknown.
1. Increases from two to three the number of buildings for which the Director of the Department of Administration may enter into lease-purchase agreements.
2. Requires JCCR to review the lease-purchase agreement before the transaction takes effect.
3. Specifies authorized conditions of the lease agreement.
4. Exempts the buildings from property taxation during construction and while occupied by the state for governmental activity.
5. Allows the Director of DOA to acquire land needed for a lease-to-own transaction by exchanging state property with the Arizona Power Authority. Requires both land acquisitions and land exchanges to be reviewed by JCCR.
6. Specifies that any lease-to-own transaction executed after July 1, 2001 may allow for the financing of costs related to the acquisition and installation of modular furniture through the lease-to-own transaction. Prohibits other furniture or relocation costs from being financed as part of the transaction.
7. Provides for a general effective date.
Amendments Adopted by House of Representatives
1. Allows the Director of DOA to acquire land needed for a lease-to-own transaction by exchanging state property with the Arizona Power Authority. Requires both land acquisitions and land exchanges to be reviewed by JCCR.
2. Specifies that any lease-to-own transaction executed after July 1, 2001 may allow for the financing of costs related to the acquisition and installation of modular furniture through the lease-to-own transaction. Prohibits other furniture or relocation costs from being financed as part of the transaction.
Senate Action House Action
GOV 1/29/01 DP 6-0-0-0 PIRA 3/6/01 DP 8-0-0-2
3rd Read 2/7/01 30-0-0-0 APPROP 3/18/01 DPA 11-2-0-3
Final Read 5/1/01 27-1-2-0 3rd Read 4/25/01 45-11-4-0
Signed by Governor 5/4/01
Chapter 317
Prepared by Senate Staff
May 25, 2001