State Department of Administration outlines Capitol Complex rent, surcharges and leasing policy

Adam Prophet, secretary for the Kansas Department of Administration, told the Ways and Means Committee that the state treats space in the Capitol Complex as an “all in” rent and is tightening policy for private leases in Shawnee County.

Prophet said agencies that occupy state-owned buildings in the complex pay a comprehensive rent rate that covers utilities, housekeeping, pest control, snow and ice removal and surface parking; separate charges apply for computer-room (data center) space because of higher energy and maintenance needs. He said the department collects rents on about 40% of the complex’s leasable space and maintains roughly 2,100,000 square feet of building space and about 53 acres of grounds across the complex.

Prophet told the committee the department will not enter private leases in Shawnee County longer than five years going forward, and plans to reintroduce a cost-comparison form agencies must complete before pursuing private leases. “What we’re trying to get to is an apples to apples comparison of what your total lease cost is out of a state facility versus what it is in a state facility,” Prophet said.

Why it matters: the presentation explains how the Department of Administration sets rent and the scope of services included in that rent, and it signals changes that could affect agency budgets and future private leasing decisions as new state buildings—most notably the Docking State Office Building—come online.

Key details

- Rent and coverage: Prophet said the base rate charged to agencies in state-owned buildings includes aggregated utility costs for the Capital Complex; housekeeping; pest control; move-in build-out “to a reasonable degree”; and snow and ice removal. He said computer rooms are charged at a higher rate because they “utilize a lot more energy and there’s a lot more that goes into maintaining those.”

- Square footage and vacancies: Prophet reported about 2,100,000 square feet total across the complex, with roughly 880,000 square feet leasable office space (about 40% of total). He said vacant office space across the listed buildings was about 7,300 square feet at the time of the presentation.

- Docking State Office Building and building ownership: Prophet described the Docking building as the new building due to be completed during the summer and said roughly 73,000 square feet is leasable office space (about 153,000 square feet for public-facing floors 1–3). He clarified the KDHE lab building is state-owned and that the state may “mothball” that facility because of possible asbestos and other remediation costs.

- Monumental surcharge: Committee members asked about the “monumental surcharge” applied to agencies occupying space in Shawnee County; Prophet said the surcharge funds maintenance of the Statehouse grounds, the Judicial Center, Cedar Crest and Capitol Complex parking lots and that federal dollars may not be used to pay the surcharge. He confirmed the surcharge is under review and noted a projected increase from about $3.30 per square foot to $4.50 in a coming fiscal year as new square footage is added and the department brings buildings online.

- Furniture and build-out: When asked whether furniture is included in the base, Prophet said the department typically includes base workstations, cubicles and office walls as part of a build-out; agencies are usually responsible for chairs and some other furnishings (for example, waiting-room chairs or additional items beyond the base build-out).

- Lease terms and market comparison: Prophet said some private leases the state holds are below current market rates—some long-term leases date back 25 years—and the department will provide a comparison form to show agencies the full, all-in cost of private leases versus capital-complex occupancy.

Questions and follow-up requests

Committee members asked for clarification on several points: whether the Judicial Center pays the surcharge (Prophet said he would verify), details about Highway Patrol lease costs and the number of years remaining on long leases (Prophet said the department can pull those details and return them to the committee), and whether KBI-owned offices are handled through the Department of Administration (Prophet said they are not).

Ending

Prophet said the department plans to roll out the lease cost-comparison form within a month or two and will continue to review the rent and surcharge calculations. He invited committee members to submit follow-up questions for additional detail.