In light of Louisiana’s unprecedented fiscal crisis, state Treasurer John Kennedy has recently come under fire by Commissioner of Administration Jay Dardenne for leasing office space in a downtown Baton Rouge high rise when the state has unoccupied, cheaper, state-owned space available.
Kennedy has responded by saying he doesn’t agree with the administration’s figures, but will move if savings are to be had.
The administration is apparently not troubled, however, by the higher lease rates the Coastal Protection and Restoration Authority will be paying later this year when it moves from Chase Tower North into a new building in the Water Campus, a riverfront research park that is being developed between River Road and Nicholson Drive.
Currently, CPRA pays $26.25 per square foot for the 35,861 square feet of usable space it leases in the Chase Tower building. That figure includes 85 parking spaces and totals about $941,341 a year.
When the agency moves to the Water Campus, which is scheduled to happen this summer, it will lease 41,490 square feet of usable space, including 137 parking spaces, at a rate of $29.50 per square foot, or about $1.22 million. That rate will increase every two years to $32.50 per square foot in 2024, when the annual lease will total $1.35 million.
Given the 12% lease rate increase this year, the future increases—which will be more than 23% higher by 2024—and the fact that the new building is bigger than the coastal agency’s existing space, CPRA’s new digs will cost state taxpayers between some $278,700 more this year and $408,660 more by 2024 than what they’re currently paying.
But Dardenne, who took Kennedy to task for some $294,000 the treasurer’s office could save by relocating from City Plaza downtown, says through a spokesman that CPRA’s move to the Water Campus—which promises to be a world-class research park and economic engine for the area—makes sense on many levels.
“They’re getting new parking, more office space, conference space, which they don’t have now, and they’ll be at the heart of research facility that will attract experts from around the world,” says Dardenne spokesman Jacques Berry. “This will hopefully result in greater efficiencies.”
CPRA Board Chairman Johnny Bradberry echoes Dardenne’s comments about the synergies that will result by locating the agency in the Water Campus, saying, “This location affords us real-time access to information that supports our decision-making, such as research being conducted at the Center for River Studies located next door to the CPRA building.”
But Bradberry also says he would like to revisit the terms of the lease agreement with Commercial Properties Realty Trust, the Baton Rouge Area Foundation’s real estate company that is developing the Water Campus, to see if there are ways to lower costs.
“Efficiency and cost effectiveness are extremely high priorities for this administration,” says Bradberry, who took over at the helm of the CPRA after Gov. John Bel Edwards’ election. “I am seriously and personally committed to reviewing this and all contracts to assure they are the wisest expenditure of our funds and are in the best interest of CPRA and the state of Louisiana.”
A spokeswoman for Commercial Properties Realty Trust says she cannot comment on the issue except to confirm the square footage and lease rate of the CPRA building.
At $29.50 per square foot, the CPRA building will be one of the most expensive in the downtown market, second only to the IBM building at $30 per square foot, which also was developed by Commercial Properties Realty Trust. Lease rates in II City Plaza, downtown’s third-newest building, average $28.50 per square foot. Without those buildings, the average lease rate of downtown office space is around $20 per square foot.
—Stephanie Riegel
