state buildings

Old TRA/PSC/PUC building to be sold at auction by state

More than two acres of state-owned property in downtown Nashville, formerly used by the Tennessee Regulatory Authority (previously known as the Public Service Commission and soon to be known again by its ancient label of Public Utilities Commission), is being sold at auction on June 21, reports The Tennessean.

Chattanooga-based Compass Auctions & Real Estate LLC will oversee the auction… (of) two tracts on the north side of James Robertson Parkway and Gay Street … (including) a 45,294 square foot office building on the roughly 1.18 acres at 460 James Robertson Parkway (that) once housed the Tennessee Regulatory Authority (and)… the 0.87-acre parking lot site (nearby) will be offered in two separate, but adjoining, parcels and as a whole.

David Roberson, a spokesman for the state’s Department of General Services, said state law allows sale of properties by auction. “Because this is a high-profile property, we decided an auction would produce the highest and best price for Tennessee taxpayers,” he added.

Justin Ochs, vice president of national development for auction and real estate company Compass, said the property located near the NewsChannel 5 Network headquarters is already drawing interest from across the country.

“Downtown Nashville has become a place where families want to live and businesses want to operate,” he said.

Note: The TRA, once a major player on the Tennessee political scene under the name Public Service Commission, has become somewhat incidental in the overall lay of the state governmental landscape in the last couple of decades and is deemed no longer worthy of having a headquarters building (probably appropriately). The agency’s name is also being changed again in its days of dwindling significance to its original name — or, well, pretty close to it. See previous post HERE.

Haslam budget booster amendment: Surplus money for new state library, roads

With his tax package now approved by the legislature, Gov. Bill Haslam Tuesday proposed some changes to the 2017-18 state budget plan he presented back in February.

Maybe the most notable revisions are the addition of $55 million in supplemental one-time funding (from the current budget surplus) on road projects — beyond what is envisioned in his tax bill, which includes higher gas and diesel fuel taxes — and $40 million towards the $98 million needed to build a new state Library and Archives building, advocated for years by Secretary of State Tre Hargett.

Both of those proposals are virtually guaranteed approval of the legislature as lawmakers get into serious work on the budget next week. The publicly-released documents don’t say which road projects get the new advance funding (but one could speculate that projects in the districts of legislators who voted no on his proposl might not be a high priority). It also appears that the governor is leaving about $125 million in surplus money for legislators to distribute as they, collectively, decide how to spend.

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Bill to block state park privatization moving in House & Senate

Republican-controlled committees of both the House and Senate have approved a Democrat-sponsored bill that would block new privatization efforts at Tennessee state parks.

Key sentence in the bill (SB1110/HB1208), sponsored by House Minority Leader Craig Fitzhugh, D-Ripley, and Sen. Sara Kyle, D-Memphis:

“The management, operation, and preservation of state parks, including the management, operation, and preservation of any buildings, facilities, structures, or improvements upon state park property must not be the subject of any private contract or otherwise outsourced to any private company or individual.”

It doesn’t apply to contracts in place before July 1, 2017. But Fitzhugh says that existing contracts coming up for renewal after that date could be subject to the prohibition when they expire and come up for renewal.

In the Senate Energy, Agriculture and Natural Resources Committee, Kyle’s bill was approved quickly Monday without discussion  – Chairman Steve Southerland seconded the motion for passage — on a vote of 7-0-1. Sen. Delores Gresham, R-Somerville, abstained.

On Wednesday, the House Agriculture and Natural Resources Committee approved the bill on voice vote with no apparent opposition after a short discussion, including Fitzhugh declaring privatization of parks “is something the people do not want” and there is a danger of “overpricing” park visits under current plans so that average Tennesseans cannot afford them “when we try to make a profit out of state parks.”

At Fall Creek Falls State Park, current plans call for demolishing the present Inn, building a new one at a state cost of $22 million, then turning operations over to a private company with anticipation that the average cost of a room would be $151 per night, compared to $75 at the existing Inn.

Near unanimous Republican support for a Democrat-sponsored bill even remotely controversial is an oddity. But it remains to be seen whether the committee votes are a symbolic gesture that will be scuttled later in the process, a genuine defiance of the governor’s plans or something in between.

Note: See also Sam Stockard’s report following Senate committee approval, but prior to the House sub’s vote. The article notes that current Haslam administration plans call for getting a contract signed for the Fall Creek Falls private operations in May, which could mean the deal gets included in the grandfather clause for contracts in place by July 1.

Opposition develops to demolishing Henry Horton State Park Inn

Marshall County residents are rallying to preserve the inn at Henry Horton State Park, which is scheduled to be demolished under the governor’s budget proposal for the coming year and two legislators representing the county are trying to help, reports the Marshall County Tribune.

As it stands, Governor Bill Haslam’s proposed budget for 2017-18 includes $10.05 million for capital projects at the park, but is missing the approximately $6.7 million that TDEC asked for to renovate the inn at the park.

The budget request includes, among other projects, funding to build a new restaurant and visitor center at the park, but, as it is currently written, would demolish the 60-room inn, without replacement. The request would leave the 12-room motel facility at the park as well as the five cabins that the park offers.

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Fall Creek Falls Park privitization to proceed with revised oversight

The State Building Commission will now have firmer control over building-related aspects of Republican Gov. Bill Haslam’s plans for outsourcing Fall Creek Falls State Park’s operations under amended rules for bidders approved on Thursday, reports the Times-Free Press.

But Treasurer David Lillard, a commission member, made it clear during the commission’s executive subcommittee meeting that the panel’s oversight jurisdiction does not extend to the request for proposals’ other major area: The outsourcing of hospitality functions at the popular Upper Cumberland Plateau park in Van Buren and Bledsoe counties.

Statutorily, those are “not within the Building Commission’s purview,” Lillard said, noting the excluded list includes current workers’ continued employment, pay and benefits in operational areas ranging from the park inn, restaurant and convention center to the golf course and gift shop.

But the SBC will retain strict oversight within provisions of the request for proposals over the park’s chosen vendor, who will be called upon to spend $22 million in taxpayer money to tear down the existing inn and rebuild it.

Members unanimously approved the tighter oversight in efforts to resolve a revolt by professional Tennessee-based architects and engineers.

…Critics see the revised request for proposals as the template for renewed administration efforts. Haslam’s proposed budget calls for new capital expenditures at several other parks.

Rep. John Ray Clemmons, D-Nashville, an outsourcing critic, said the amended request for proposals provides “more legislative oversight” over the park’s demolition and construction.

Note: The TDEC press release is below.

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Architects, engineers object to Haslam’s park privatization plans

Tennessee architects and engineers say Gov. Bill Haslam’s plans to privatize operations at Fall Creek Falls State Park would largely bypass the State Building Commission, which normally oversees all state property projects, reports the Times-Free Press.

That brings them into “the political battle between the administration on one side and, on the other, state employees and Van Buren County who oppose outsourcing hospitality services at the remote Cumberland Plateau park considered the “jewel” of Tennessee’s park system.”

The administration has set aside $22 million to tear down the park’s inn and build a new one. The proposal would allow vendors to select their own architects, engineers and construction teams. But William Blankenship, a Knoxville architect and president of the American Institute of Architects- Tennessee, said the RFP “circumvents” the State Building Commission.

When “the state of Tennessee hires me as the designer and I sign a contract with the state, I serve the state and I serve the state’s best interest,” Blankenship said.

“When somebody’s working for a concessionaire out of New York City, they’re going to sign a contract with that concessionaire. Do you really think he’s going to work in the state’s best interest? He’s going to move across the table to the concessionaire. And they’re going to work together either for or against the state of Tennessee.”

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Ann McGauran named TN state architect

The Tennessee State Building Commission has voted to appoint Ann McGauran, now with the Department of General Services, as Tennessee state architect. She succeeds Peter Heimbach in the position involving oversight of state building projects and real estate transactions.

McGauran is the first woman to hold the position, created in 1955.

The press release is HERE.

Just three companies reported seeking contract for management of TN state buildings

Three companies are bidding for a contract to take over management of most state government building under a privatization plan pushed by Gov. Bill Haslam’s administration and involving a “virtually unprecedented procedure” that allow bidders to help fashion project specifications in advance, reports Cari Wade Gervin.

The company names are officially secret until the bid winner is announced. But Gervin reports that an email written by a University of Tennessee official indicates they are Aramark, Compass Group North America and Jones Lang LaSalle. JLL and Aramark already have other contracts with the state. Various officials refused to confirm or deny.

The three companies bidding on the RFP were among the top guesses of likely bidders by those paying attention. JLL, one of the largest managers of real estate in the nation (headquartered in Chicago; publicly traded and with $48 billion in assets managed), has already nabbed one outsourcing facilities management contract under Haslam’s tenure, along with a contract (now expired) to conduct building assessments for the state and to review real estate management operations; the contract was amended to also allow JLL to act as a leasing broker for the state. The state comptroller’s office found massive problems with the contracts’ implementations in 2013 and 2016. Haslam also used to have significant holdings in the company; it’s unclear whether he still does. (Although an ostensibly blind trust has been managing his financial holdings since he took office, he has refused to disclose all the details of his holdings.) 

Aramark — based in Philadelphia, publicly traded and with $14 billion annually in revenues — already manages the outsourced food services at UTK, even driving faux food trucks around campus. The company also signed a contract with the state last summer to manage food services for the Department of Corrections — despite the state of Michigan cancelling its correctional contract with Aramark 18 months early after issues like meal shortages, maggots and rodents in the food, and employees reportedly smuggling drugs into prisons and raping prisoners.

The Post was unable to determine by press time what, if any, state contracts Compass Group has. The UK multinational company had revenues of $24.6 billion last year. Its U.S. headquarters are in Charlotte, North Carolina, and it is reportedly the largest contract foodservice company in the world, with operations in over 50 countries. It manages multiple workplace vending operations in Tennessee and has lost at least one lawsuit over refusing to pay worker’s compensation.

Audit finds fault with some aspects of state outsourcing

A new audit of the Department of General Services by the state Comptroller’s office finds some shortcomings but is less critical of Tennessee’s outsourcing efforts than in a 2013 review, reports the News Sentinel.

Policies since adopted have resolved most of the previously cited problems, the new audit says, but auditors still found fault with oversight in privatization by the department’s division known at State of Tennessee Real Estate Asset Management or STREAM. A list of “findings” that were deemed troublesome by the auditors:

“STREAM executive leadership did not establish adequate processes, did not maintain updated policies and procedures, and did not provide adequate direction to staff related to leasing processes.” In general, the issues involved failure to keep track of leases, related documents and building owner compliance with terms of the leases.

“When executing lease procurements, STREAM management did not comply with State Building Commission policy or department policies and procedures.” The neglected policies included obtaining and filing conflict-of-interest disclosures and renewal of leases involving a period of more than five years or a value and/or $150,000 in value without getting official commission approval.

“STREAM’s lease management team failed to effectively track and address the state’s leases before they expired.” In a sample of 25 leases reviewed, the auditors found that in 13 cases STREAM did not review renewals and simply defaulted to a “holdover” clause in the existing lease. In six cases, STREAM had no communication with the state agency using the leased building prior to an automatic renewal.

“STREAM management did not always ensure Jones Lang LaSalle submitted all monthly reports and performed property inspections as required by the facilities management contract.” The contract with JLL calls for the company to physically inspect each building every three months if it covers more than 20,000 square feet of space; annually if less than that. In a majority of cases, the deadlines were missed, auditors said, by anywhere from as little as 10 days to as much as 957 days.

The auditors also surveyed officials of state agencies that used leased building and found that a majority declared themselves satisfied with arrangements and many complimented JLL on its handling of issues raised.

Note: The full audit is HERE.

Power problems close Tennessee Tower

The Tennessee Tower, workplace for about 2,100 state government employees, was closed today because of a power outage, according to Department of General Services spokesman David Roberson.

Electric service in the building was shut down over the weekend for scheduled maintenance work but “had to be extended because of unexpected problems,” said Roberson. Details on the nature of the problem were not available Monday morning, he said.

The  building is expected to reopen on Tuesday, Roberson said.

ABOUT THIS BLOG

Former Knoxville News Sentinel capitol bureau chief Tom Humphrey writes about Tennessee politics, government, and legislative news.

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