published Tuesday, July 2nd, 2013

Tennessee legislative committee to review leasing firm’s deal with state

  • photo
    Gov. Bill Haslam answers a question during a news conference in this file photo.
    Photo by Associated Press /Chattanooga Times Free Press.

NASHVILLE, Tenn. — As a Tennessee General Assembly committee prepares to review a Chicago-based company’s dealings with state government, an administration plan to raze a state office building is being questioned.

State Rep. Brenda Gilmore, D-Nashville, told The Tennessean the Cordell Hull Building next to the state Capitol is an impressive structure.

“The building is just beautiful,” she said. “It shouldn’t be torn down just because one consultant says it should be.”

The Fiscal Review Committee, which Gilmore chairs, will review how Jones Lang LaSalle parlayed in initial $1 million contract into a multimillion dollar deal to lease space for state offices.

“I don’t think we should jump to conclusions and say that improprieties were done,” Gilmore said. “But it’s a big deal when you go from $1 million to $38 million.”

Jones Lang LaSalle also would be in line for a 4 percent commission every time the state rents space.

Gov. Bill Haslam once listed the commercial real estate firm as one of his major investments. Haslam said he sold it before he took office in 2011.

The state is reassessing 5 million square feet of office space. Thousands of state workers have been asked to move and many others are expected to be asked in the near future. Jones Land LaSalle says the shuffle will save Tennessee government more than $100 million in the next 10 years.

The nine-story Cordell Hull Building hearkens to a time when government was seen as a pillar of stability, said Tim Walker, executive director of the Metro Historical Commission.

“We don’t build them that way anymore,”Walker said. “It speaks to the permanence of government, so it’s clad in limestone, but if you take a look at a building like the (nearby) Sevier Building, it’s more modest.”

There are also doubts about a decision to move 725 workers out of the L&C Tower in downtown Nashville. The owner of that building has sued for $4.15 million in lost rent and up to $2 million in additional damages.

For his part, Haslam said the state’s real estate decisions and the firm’s recommendations.

“The reality is when you change something big in state government —anything —it brings up questions and issues to folks,” Haslam said last week. “This is a sea change in what we’re doing, but it’s also important to note we’re going to save a lot of money.”

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