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VOL. 128 | NO. 93 | Monday, May 13, 2013

State Zeros in on Downtown Office Space

By Amos Maki

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The future of the state’s role as a major employer and user of office space Downtown could become much clearer this week.

Proposals are due Thursday, May 16, for 100,000 square feet of office space that will become vacant when the state abandons the Donnelley J. Hill State Office Building Downtown. A recent request for proposals from the agency that handles state real estate appears to put the state’s focus entirely on Downtown.

The state, following a consultant’s recommendation, said it would vacate the Hill Building in Civic Center Plaza. Tennessee Gov. Bill Haslam said the roughly 900 workers there would be relocated Downtown.

The latest RFQ from the Department of General Services said the area for the site would be bounded on the west by the Mississippi River, Interstate 40 on the north, I-55 to the south and I-240 on the east. The location must also be within “a comfortable walk,” which it described as 10 minutes, of a bus stop. A previous state RFQ sought proposals for Downtown, Midtown and the airport area.

“Looking at this, yes, it is different from the last version.”

–Paul Morris
President, Downtown Memphis Commission

The RFQ was discussed with real estate brokers last week. The state plans to issue a notice of award for the lease on July 23.

Last year, the state agency that handles real estate said the Hill Building, which opened in 1968, was functionally obsolete and it would be cheaper to sell the 12-story structure than spend $9 million to improve it. The state’s decision was based on a recommendation by Jones Lang LaSalle, a Chicago-based real estate firm with an office in Memphis. JLL also examined other buildings across the state.

The state has made concessions to make it easier for Downtown property owners to satisfy the state’s needs.

The General Services’ RFQ says the state requirement for 100,000 square feet of contiguous space could be met if the space is divided into blocks where 35,000 square feet and 65,000 square feet are contiguous. The state also said that hurdle could be met if proposers submitted proposals for only 35,000 square feet or only 65,000 square feet.

“Looking at this, yes, it is different from the last version,” said Downtown Memphis Commission president Paul Morris. “The last version had minimum floor plate requirements and free parking required for guests, both of which were suburban models.”

The machinations with the state come as Pinnacle Airlines moves forward with plans to vacate 170,000 square feet of space at One Commerce Square.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 66 378 15,444
MORTGAGES 67 456 20,235
FORECLOSURE NOTICES 6 115 4,001
BUILDING PERMITS 175 1,046 36,888
BANKRUPTCIES 58 290 14,633
BUSINESS LICENSES 16 80 5,209
UTILITY CONNECTIONS 76 388 22,205
MARRIAGE LICENSES 28 111 4,774

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