"DOR Not Coming to Downtown Jackson" by Politics Blog | Jackson Free Press | Jackson, MS

Politics Blog

DOR Not Coming to Downtown Jackson

The Mississippi Department of Finance and Administration, which oversees the operation of state buildings, has recommended the former Worldcom Building in Clinton as the permanent home for the Department of Revenue, now housed in what's practically a shed, also in Clinton.

Downtown Jackson had been a front-runner for agency HQ, especially after a 2011 report commissioned by then-Gov. Haley Barbour said buying the Landmark Building would be the cheapest option for our cash-strapped state.

The issue has since become politically charged with Speaker Philip Gunn wanting to keep the agency close to his Clinton district.

DFA explains its rational in the following verbatim news release:

MS Department of Finance & Administration Recommends New Location for the MS Department of Revenue

Today, the MS Department of Finance & Administration has determined that, on the basis of receiving the highest evaluation score, the Mississippi Department of Revenue should execute a 20 year lease agreement with Duckworth Realty for the relocation of its offices to the South Pointe Building (the former Worldcom Building) in Clinton, MS. The initial annual cost to the State would be $2,878,000 resulting in a total cost of $41,428,492 (net present value) for the term of the lease agreement. This offer represented the lowest total cost to the State. The proposal submitted by Duckworth for the South Pointe Building includes 187,511 square feet of office space, 600 parking spaces, tenant improvements, security and janitorial services. The lease term would begin July 1, 2014.

Kevin J. Upchurch, Executive Director of the Mississippi Department of Finance & Administration, stated “We are pleased to have a more permanent solution to the issue of housing the MS Department of Revenue. The selection process was thorough and comprehensive. The main objectives of this process were the cost to the taxpayers, ease of access for citizens, and securing a more permanent, functional facility for MDOR employees. I am satisfied that this location meets all of those objectives.”

On November 1, 2012, DFA issued a Request for Proposal (RFP) to obtain new offices for the Mississippi Department of Revenue (MDOR) via a long term lease. A team consisting of three DFA employees and two MDOR employees was assembled to evaluate all proposals based on pre-defined calculations and scoring criteria. The State received six proposals and three were selected for further review. The three finalists were Hertz Investment Group, LLC (The Landmark Building), Ergon (Diversified Technologies Building), and Duckworth Realty (South Pointe Building).

DFA contracted with Allred Architectural Group, P.A. of Ocean Springs, MS to perform test fit analysis, building assessments, and environmental assessments of the three proposed buildings. This review was designed to determine each building’s ability to meet the needs of the MDOR. The review was also designed to identify any deficiencies within the buildings. Based on the results of these analyses, each finalist was asked to the submit a Best and Final Offer in which they were to explain how any noted deficiencies would be addressed, as well as, make any final adjustments to the initial financial offerings.

The Attorney General’s Office has reviewed the RFP process and finds no deviation from the State’s procurement laws or the Bureau of Building, Grounds and Real Property Management’s Leasing Manual. Additionally, DFA retained the services of John G. Corlew, Corlew Munford & Smith, to perform an independent evaluation audit of the procedures followed by the DFA in the RFP process. The final review determined that DFA adhered to all of the applicable statutory requirements throughout this process. Further, the review determined that calculations and scoring used to determine the final outcome were correct and strictly followed the evaluation system set forth in the RFP.

Ed Morgan, Commissioner of Revenue, stated “We appreciate that the process used to make this decision was fair and equitable. Great care was taken to make sure that the needs of the citizens of our state and the needs of the Department of Revenue were met in selecting the best location. We are pleased with the results and look forward to moving to our new home.”

The MDOR offices are currently located in privately owned leased space on Springridge Road in Clinton, MS. This lease term ends on June 30, 2014.

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Comments

kdavis 4 years, 8 months ago

Would someone please explain the math to me on this decision? They could BUY a 330,000 square foot office building downtown for $7.4 million. But they chose to LEASE a 187,511 square foot building for 20 years at $2.878 million per year.

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Knowledge06 4 years, 8 months ago

That's the problem kdavis, NO ONE can explain the math nor can they provide the details of the other proposals. This is a backroom deal that will only see the light of day when contracts are signed and you can't do anything about it. They have circumvented the will of the legislature. Phillip Gunn is a coward. If the Clinton location is such a good deal, why not present it along with the other 2 proposals to the full body and let them vote. He was too cowardly to allow the passed Senate bill to be brought up for a vote in the House. Nothing good is going to come out of this decision.

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Knowledge06 4 years, 8 months ago

Per State Code: " There is hereby created within the Department of Finance and Administration the Public Procurement Review Board, which shall be composed of the Executive Director of the Department of Finance and Administration, the head of the Office of Budget and Policy Development and an employee of the Office of General Services who is familiar with the purchasing laws of this state."

The Public Procurement Board has the final say on the DOR matter and it's made up of the same people who made this final recommendation. Go figure.

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kdavis 4 years, 8 months ago

Using figures from "the other paper", DFA scored the Landmark Center's 20 year cost at $51.6 million. The purchase price of the building is $7.6 milllion (not $7.4 million that I erroneously reported in the comment above). This means that the price tag for renovations to Landmark and providing parking spaces for 600 employees will cost $44 million over 20 years. I'm not an expert on office space renovation, but that seems extremely excessive to me. Also, I don't think DFA factored the benefit of having an extra 140,000 square feet of space for other State agencies. Nor did they factor the benefit of ownership at the end of 20 years versus the expense of paying increased rent beyond the end of the 20 year lease period.

We all know what's going on here. Mississippi politics at its finest. Doing what's best for a special interest group, in this case the town of Clinton, and to hell with the rest of us. Someone needs to hold their feet to the fire.

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donnaladd 4 years, 8 months ago

I agree, kdavis. This looks like a clear boondoggle; the taxpayers should be furious about it. We wrote our editorial about it for tomorrow.

I'd like to see diverse segments of the community come together to launch a campaign to get sunshine on the proposals and plans.

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bubbat 4 years, 8 months ago

The Miss Business Journal say the final offers from the Duckworth Realty $41,469,192 million for a 20 year lease and the Hertz Group for the Landmark building was $51,684,393 for a 20 year lease, $10 million difference. Math works for me.

http://msbusiness.com/businessblog/2013/03/26/landmark-final-offer-for-dor-hq-came-in-10m-above-south-pointes/

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kdavis 4 years, 8 months ago

bubbat: while you're reading the MBJ, you might want to read their op-ed titled "Our view, Jackson needs the DOR". The $10 million difference did not consider purchasing the Landmark Center which would be a much better alternative for the State.

http://msbusiness.com/businessblog/2013/03/27/our-view-the-simple-answer-jackson-needs-the-department-of-revenue/

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bubbat 4 years, 8 months ago

kdavis- Just read it, still doesn't change the fact either way, buying($44.9 million)or leasing($51.6 million) the Landmark Building would cost the State or more correctly taxpayers more than leasing the South Pointe Building($41.5million) in the long run.

I don't agree with their opinion that when it's a close call it should go to Jackson, nor their opinion Jackson needs it more than Clinton, that shouldn't even be considered in the decision making process. Saving taxpayers money trumps Jackson's needs every time.

Even though I do live in Clinton, I really don't care where they put it, they could put it in Hushpuckena or Diddy Wah Diddy, as long as one of them was the most cost effective, and base on the numbers that seems to be moving it to the South Pointe Building.

I just wish the DOR would get off the butts and process my tax return...lol

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EDO120406 4 years, 8 months ago

bubbat- actually in the long run after twenty years the state will have to lease a portion of this building again possibly for another $41,469,192 which would cost the taxpayer's $41,469,192 x 2 = $82,938,384 over the next 40 years versus $51,684,393 total to purchase and the landmark building downtown. The landmark building would be a better choice overall hands down. Math works for me.

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kdavis 4 years, 8 months ago

Bubbat: you assume that the figures released are correct. You know what they say about the word assume. One reason there is so much skepticism about this decision is that DFA has not exactly been forthcoming about how they arrived at these amounts. Second, they are comparing apples to oranges as I pointed out and the person above did too. Philip Gunn wants this in Clinton (and by the way I usually vote Republican) and it appears that Gunn and DFA have circumvented the controls in place in order to get what they want, disregarding what is good for Mississippi.

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bubbat 4 years, 8 months ago

EDO- You need to go back and read the article again the $51 million for the Landmark is a lease too, not buying it. Cost for buying it was $56 million now. You left out something in your figures on buying the Landmark building the State will also have the added expense of repairs for 40yrs, leasing parking spaces for 40yrs, paying for security and janitorial services for 40yrs most of which are included lease of the South Pointe Building, which could run in the tens of millions over time that the State will have to pay if they buy it. Redo you math...,lol

Beside why do ya'll want in Jackson so bad, other than ya'lls misguided thinking everything new in the Metro area needs to be in Jackson.

I really don't see where it will benefit Jackson,isn't State property exempt from city and county taxes, no benefit there. A few tax dollars from the employees buying lunches and gas? Hardly worth the extra expense of moving the DOR to Jackson. Won't the owners of South Point Building still have to pay taxes on the lease property? At least that way all the citizens of Hinds County will benefit for it being in Clinton. Just a thought.

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EDO120406 4 years, 8 months ago

bubbat- OK, $56 million to buy the landmark building. Those added figures of yours were left out of the equation because they were not provided in any source and are completely unknown to you and me, unless you know something that the rest of us do not...you are clearly taking an extremely wild guess at those numbers. Stick with what we know. It's not that I want it in Jackson so bad and this shouldn't have anything to do with which city it benefits the most but which city would be better to serve the citizens of the State of Mississippi. Besides, mostly all other State agencies have their headquarters in the downtown area of the state capital of Jackson, MS for the reason to better serve its citizens.

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bubbat 4 years, 8 months ago

EDO- I didn't add in any numbers? Just stated the fact they you are only considering the initial purchase price of the Landmark Building and not the additional cost the State would assume by buying it. Not a wild guess, pretty common sense that the State responsible would be those cost once they sign on the dotted line for the building. It did say it could run in the tens of millions over 40yrs which is fairly realistic too. Do you think those things would be free? Please explain how any State agency having it headquarters in downtown Jackson serves me or any citizen of Mississippi better because it the Capitol? Like I said before the DOR could be in Hushpuckena and serve me just as well.

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