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VOL. 128 | NO. 131 | Monday, July 8, 2013

Five Groups Bid for State Office Space

By Amos Maki

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Five groups have submitted bids to become the new home to roughly 900 state workers.

One Commerce Square is one of several sites being considered by the state, which is looking to relocate about 900 employees Downtown.

(Daily News File/Lance Murphey)

JP-Memphis, Memphis Commerce Square Partners, Peabody Tower GP, Peabody Place Gold GP and Hertz Memphis all submitted bids for the state’s real estate needs.

The state received bids Tuesday, July 2, for 100,000 square feet of office space that will become vacant when the state abandons the Donnelly J. Hill State Office Building Downtown.

The state has made it a priority to keep the state office workers Downtown. The state’s last Request for Qualifications from the agency that handles state real estate put the focus entirely on Downtown.

“We will be evaluating these responses in accordance with the terms of the (RFQ),” said Leah Dupree with the state’s Department of General Services.

Information released by the state didn’t include the buildings proposed by the bidders to house the state workers, but the Shelby County Assessor of Property shows some of the likely properties in contention for the contract.

For example, JP-Memphis owns the office building at 1991 Corporate Ave. in the Nonconnah Corporate Center, near the airport and outside Downtown; Memphis Commerce Square Partners owns One Commerce Square at 40 S. Main St. Downtown; and Hertz Memphis owns the Toyota Center at 185 Monroe Ave. and the Falls Building at 22 N. Front St.

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.

“(Haslam) said he’s gong to do it and there’s no barrier to then doing it,” said Downtown Memphis Commission president Paul Morris.

Keeping the state office workers Downtown was critical, Morris said.

“It really goes to the importance of Downtown to the whole community,” Morris said. “You can’t have a great city without a great Downtown. Office workers Downtown are critical to the businesses Downtown, which in turn is critical to the image of Memphis.”

The last 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 bids for Downtown, Midtown and the airport area. The state plans to issue a notice of award for the lease on July 23.

The state has made several 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, opening the door for property owners with smaller square footage to offer.

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.

The state is operating on a fairly tight deadline. The state is expected to complete proposal evaluations by July 9. Completion of cost proposal studies should be done July 24. On Aug. 14 the state is expected to complete negotiations and negotiated cost proposal evaluations.

As the state prepares to leave the building on Civic Center Plaza Downtown, Memphis Chief Administrative Officer George Little said the city was in the early stages of exploring whether the building was suitable for relocating city services spread across the city into the building.

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