Combined State Office Building In Trouble Those Who Rent Space To State In Spokane Say Consolidation Too Costly

State lawmakers are under pressure to kill a proposed state office complex in Spokane.

The proposal would move several state agencies now housed in separate offices into a $17 million building on a site overlooking the Spokane River south of the county courthouse.

The project is being pushed as a cost-cutting measure because agencies could share office space and equipment.

“You could have one receptionist, one phone system, one set of copying equipment that gets more efficient usage,” said state Treasurer Dan Grimm.

Offices that would move to the new building include the Department of Social and Health Services and the Department of Labor and Industries. If money is approved, the building could be finished by 1998.

But people who currently lease buildings to the state say “co-location” of state agencies is a bad idea.

“The co-location argument is one that has some popular appeal because it sounds logical,” said J. Brent McKinley, chairman of Vine Street Group, which owns buildings leased to the state. “But once you start getting into the nuts and bolts, it doesn’t make as much sense.”

McKinley testified for the Government Building Owners and Lessors Association at a House Capital Budget Committee meeting last week. He argued that it would cost the state far more to build the new offices than to continue renting.

A state report estimates savings of at least $4 million over 25 years by constructing the new offices. Paying off the bonds sold to finance the project would be cheaper than paying ever-increasing rental rates in Spokane, the report concludes.

McKinley contends it will cost the state $30 million more over the next 25 years to build the new facilities than it would to keep renting. He accused state bureaucrats of manipulating the numbers to make the project look good.

“This is a very common tactic of bureaucrats,” McKinley said.

The author of the state study said McKinley and other opponents of the project are distorting the facts.

“If they were in front of a judge, I think the judge would call them up for perjury,” said Doug Chin, a facilities planner for the state Department of General Administration.

“If the state would lose money … we would be fools to present the proposal,” Chin said.

Some Spokane real estate owners are mobilizing against the project.

They have hired a lobbyist to convince legislators to deny money for the new building, said Kate McCaslin, a longtime Republican Party activist who works as a consultant to the organization, Citizens for Cost-Effective Co-location Policy.

“We have a number of concerns about the project, not the least of which is cost,” McCaslin said. The new office space also could leave some downtown buildings vacant, she said.

Spokane legislators say they will take a closer look at the project, which is part of Gov. Mike Lowry’s 1995-97 capital budget request.

“We have to be really careful with downtown,” said Rep. Jean Silver, R-Spokane, chairwoman of the House Appropriations committee. “We’re still studying the issue.”