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State outlines Las Vegas campus purchases, appraisal timing and relocation costs
Summary
State Public Works Division staff told a joint subcommittee they plan to purchase multiple office buildings at the McCarran campus in Las Vegas and use those purchases to reduce the state's leased footprint, but lawmakers pressed agency staff for appraisal timing, moving-cost breakdowns and contingency plans for lease shortfalls tied to Department of Public Safety moves.
State Public Works Division staff told a joint subcommittee they plan to purchase multiple office buildings at the McCarran campus in Las Vegas and use those purchases to reduce the state's leased footprint, but lawmakers pressed agency staff for appraisal timing, moving-cost breakdowns and contingency plans for lease shortfalls linked to Department of Public Safety moves.
"The total budget for the project is $78,600,000," administrator Will Lewis said while presenting the planned purchases and improvements for the McCarran location in southern Nevada. Lewis explained the proposal would buy several buildings and make renovations to house relocated state functions.
Jack Rowe, speaking for the division, told lawmakers the appraisal work on five buildings is underway and, under state law, appraisals must be done within six months of closing; he said the seller, Thomas & Mack, paid the appraisal costs in the current transaction and the division jointly selected the appraiser. "We are confident in the price because we purchased 18 buildings in that same complex with an agreed upon purchase price of $2.56 per square foot," Rowe said. He added that if an appraisal comes in below the agreed price the state would have to purchase at appraised value or renegotiate with the owner.
Assemblymember Hetegui challenged the division's estimate of $3.3 million for agency moving costs, asking how that figure was derived. "We got to the 3,300,000.0 cost... using an average of $16 per square foot based on previous projects on what that moving cost was gonna be," Hetegui said. Rowe replied that the division has moved more than 4,500 employees in the past 18 months and considers the cost a realistic estimate for the program's scale.
Lawmakers also pressed the division on identification of which agencies would occupy the purchased buildings. Rowe said some spaces are already occupied by the Department of Public Safety and that the purchase yields a net gain in state-owned square footage. "Currently, in the next 2 years, ... we have 49 leases coming due for a total of 374,866 square feet," Rowe said, adding the division intends to assess leases and collocate agencies where practical to reduce overall lease costs.
Questions also touched on a roughly $600,000 problematic lease payment tied to one leased space the state is seeking to vacate. Rowe said the decision to relocate Department of Public Safety operations into the purchased complex avoided an estimated $72 million construction cost for a new DPS building and that staff continue to evaluate options to cover the shortfall, including return-to-work lease funds.
On attempts to sell the old Grant Sawyer building in downtown Las Vegas, Jack Carroll said the state went to auction twice without receiving bids at the appraised value of $19.45 million and is negotiating with Lennar under a brokered listing; he said a nonrefundable deposit and an entitlement process would be part of any sale.
Agency staff pledged to promptly transmit appraisal results to Legislative Counsel Bureau fiscal staff and the finance committee chairs when the final appraisals are available. The subcommittee did not take action during the presentation; staff said they would continue coordinating appraisal results and occupancy planning with legislative fiscal staff and the Treasurer's office.
