Home > Article
VOL. 37 | NO. 22 | Friday, May 31, 2013
Statewide
Private firm to benefit from state leases
NASHVILLE (AP) - A real estate services firm that recommended Tennessee government unload some state-owned office buildings will benefit financially as the state leases space in the private market.
According to state General Services Department documents, Jones Lang LaSalle is poised to take 4 percent off the top on deals with private companies for leased office space in Chattanooga, Nashville and Memphis, the Chattanooga Times Free Press (http://bit.ly/15j23kH) reported.
The Chicago firm was hired as a consultant to review and assess 33 state-owned buildings and recommended closing several that it called "old and obsolete."
Last month, the General Services Department quietly inked a five-year contract with Jones Lang LaSalle to manage and maintain all state property overseen by the department, as well as leasing.
In a statement, General Services Commissioner Steve Cates said outsourcing mana gement, leasing and maintenance makes sense for the state.
"We're having an expert handle the facilities management for us," he said.
The state expects to save $50 million over the five-year contract. Moreover, Tennessee will avoid another $25 million in one-time costs, plus $3 million annually by not having to buy and maintain necessary technology and equipment, as well as set up a call center.
"It's at significant cost savings and cost avoidance to Tennessee taxpayers," Cates said
"We do not see a conflict of interest," said Kelly K. Smith, General Services' assistant commissioner for communications. "The services were publicly procured through an open bid process that was approved by the State Building Commission."
The department employs 126 people for the duties that Jones Lang LaSalle will assume July 1. The employees will lose their state jobs but can apply for work with the firm, although there is no guarantee they will be hired.
Jon es Lang LaSalle beat out CBRE United States for the contract, Smith said.