The Idaho Legislature is considering a resolution authorizing the State to negotiate the purchase Hewlett-Packard’s west Boise campus as a new home for the Idaho State Tax Commission and several other State agencies.
Approval by the House and Senate would enable the Idaho Department of Administration “to enter into agreements with the Idaho State Building Authority to provide financing to construct new, or purchase existing, office and or warehouse space to establish a single destination complex to house state agencies,” according to a news release from Gov. Otter’s office.
In the meantime, the Department of Administration has signed a non-binding letter of intent to enter into talks with HP to purchase the complex on Chinden Boulevard between Five Mile and Cloverdale roads.
The facility where the Tax Commission now is housed, on Park Center Boulevard near downtown Boise, was purchased by St. Luke’s Health System last year to meet its own facility needs. “In late October, the Department of Administration issued a request for proposals for new or existing space where the Tax Commission -- and possibly other State agencies -- could be located as their more expensive leases expire. It received 46 responses,” said Jon Hanian, Otter’s spokesman.
“The unexpected and expeditious need to locate space for the Tax Commission has led us toward considering a permanent solution,” Administration Director Bob Geddes said. “Relocating large agencies such as the Tax Commission is very expensive and the disruption in service is inconvenient for our taxpayers. While researching options, it made sense at the same time to anticipate the imminent needs of other State agencies leasing space in the area.”
The State now leases more than 800,000 square feet of office and warehouse space in Ada County, at an annual cost of $12.2 million.
The HP property is almost 200 acres and includes eight buildings with approximately 1,346,000 square feet of office space and 200,000 square feet of warehouse space. The purchase price is estimated at $110 million -- and an additional $16 million is included in the bond estimate for building renovations, for a total investment of $126 million.
As part of the proposed purchase and sale agreement, HP would lease-back over half the office space in the complex for an initial seven-year term, Hanian explained. “The State also will assume third-party leases with other entities already located on the campus. The State initially will use 152,000 square feet of office space, increasing to 366,000 square feet in 2020 as those other third-party leases expire,” he added.
“This opportunity for an agreement with a valued business leader will benefit both parties, and addresses a pressing need for the State of Idaho,” Governor Otter said. “We’ve been looking hard for the right place at the right price for our agencies, and the HP campus really fits the bill. A great employer is reinforcing its commitment to Idaho and the State is saving money, so it’s a win-win.”
“This provides the State of Idaho with a long-term solution to our Boise-area facility needs at a reasonable price. It’s a sound and responsible investment that will help us maintain our commitment to living within the people’s means,” House Speaker Scott Bedke added.
“With business booming, lease rates in the Boise area are rising. And new construction would cost taxpayers twice as much as this plan. The numbers don’t lie: This is a great deal for Idaho,” said Senate President Pro Tem Brent Hill.
A second piece of legislation will amend Idaho Code 67-5708 to allow the Department of Administration to accept existing leases incidental to the acquisition of a facility by the Idaho State Building Authority. Revenue from the lease-back and third-party leases –- combined with rent collected from State agency occupants -– should be enough to provide for the purchase and operation of the HP campus facilities without additional burden to the State.