Work advances on state government center in west Boise

Work advances on state government center in west Boise
Posted at 2:38 PM, Oct 02, 2018
and last updated 2018-10-02 16:39:13-04

Idaho state lawmakers decided two years ago to buy the former Hewlett-Packard campus in West Boise and make it a center for state offices, but so far, no state agencies have moved in.

Construction is underway, however -- and the first 150 state employees, from the State Tax Commission's audit division and print center, will move in Dec. 15.

"We announced it to the staff last week," said Ken Roberts, Chairman of the State Tax Commission, who joined lawmakers on the Joint Finance-Appropriations Committee for a tour of the HP campus on Monday.

At its height, the 200-acre HP campus on Chinden Boulevard was the center for the high-tech firm's Idaho operations, including printer manufacturing. More than 7,000 high-tech workers were employed there behind closed gates. 

The campus was rumored to be a great place to work, with grounds that featured jogging trails, soccer fields, picnic facilities and ponds; those are now all state-owned -- and for the first time in years, open to neighbors who want to jog or walk their dogs.

"The state owns this property now," State Department of Administration Director Bob Geddes, told JFAC on Monday. "It's our intention to fill it up and utilize it."

Idaho closed on its $110 million purchase of the campus in December 2017, about six months later than initially planned, Geddes said. "The negotiations took a lot longer than we anticipated," he said.

The driving force was to find a new home for the State Tax Commission, whose current Park Boulevard location, in the former Morrison-Knudsen office complex, was purchased by St. Luke's. 

But the purchase of the HP complex opened up the possibility for something much bigger, Geddes said, allowing state agencies now scattered across rented spaces to be consolidated in a single location that's also far more economical for the state than the pricey downtown core of Boise.

Idaho is currently paying $8 million a year to lease private office space, he said.

"This purchase will be a tremendous asset for the state of Idaho," Geddes told lawmakers. "This, over time, will become the solution to a lot of the growing pains that Idaho is experiencing right now and will be in the future."

Idaho purchased the complex for $110 million; it financed the purchase through a $139 million bond issue approved by the Legislature -- with the extra $29 million covering building renovations, asbestos removal, and related projects. The bonds will be paid off in a little over 28 years; rent paid by both the existing tenants and state agencies will cover the payments, which are just under $8 million a year.

Hewlett-Packard still occupies about half the site, including four buildings; it now pays rent to the state of Idaho. Two other tenants with existing leases also are staying on with the state as the new landlord -- but one of those, Sykes, a giant call-center firm, recently renegotiated its lease and vacated two floors early, which is what's allowing the first batch of State Tax Commission employees to move in.

The remainder of the Tax Commission's roughly 500 employees won't move in until next summer, when construction will be completed on their new site in the complex's Building 2. At that point, the audit and printing center workers will move next door from the current Sykes site, which they'll occupy for about eight months, and join the rest of the agency.

"It'll mean a double move," Roberts said. But since the now-vacant Sykes floors are move-in ready, complete with cubicles that the company is leaving behind, he said the divisions of the Tax Commission can move right in.

Also scheduled to move to the HP site within the next year: The Idaho Public Utilities Commission and the Idaho Industrial Commission. Numerous other agencies also are weighing moving to the site when their current leases expire.

"We're excited about this -- we need it," said State PUC Commissioner Eric Anderson. "It's going to be a great move." He said the agency is in talks with the city of Boise about buses or shuttles from downtown to the site.

The PUC is scheduled to move to the West Boise campus in September, 2019. Its current location, just blocks from the state Capitol, was sold at auction by the state endowment, as part of its move to get out of owning commercial property. The new private owner submitted a bid, but the PUC liked the West Boise site better, where it'll be with other state agencies.

Rep. Melissa Wintrow, D-Boise, said, "It's kind of an intriguing prospect as far as ease and accessibility, to have agencies all in the same location with all this parking." The site currently has 5,400 parking spaces. "There's a lot to be said for centralizing the offices so they're accessible to citizens."

Sen. Shawn Keough, R-Sandpoint, co-chair of JFAC, said, "We clearly have agencies that are paying rent to be in a downtown area that's become prohibitively expensive. In the long run, this is probably a better use of the taxpayer dollar."

Geddes touted the move as one that's cost-efficient for the state and no burden to taxpayers, as no tax increase was required to finance the deal. However, the HP campus, as it was formerly privately owned, did come off the local property tax rolls when the state bought it; it's now exempt from property taxes. That means about $1 million a year in property taxes in Ada County get shifted to other property taxpayers to make up, which Wintrow said concerns her.

Geddes said any property the state buys would be exempt. And with multiple state agencies looking at moving to the site, there's even the possibility that the Idaho Transportation Department might, in the future, decide to sell its State Street property and move to the HP site. That would allow the ITD property to be sold and go onto the tax rolls, and it likely would be valuable and highly sought after, given its proximity to the desirable Whitewater Park area.

Geddes said developers have been beating down his doors inquiring about whether they can purchase the ITD site for development, but at this point, it's not for sale. The state Transportation Board owns the site and would make any decision about its future.

(by Betsy Z. Russell, Idaho Press/Associated Press)