Three state agencies face a housing crisis after being alerted that owners of their Boise building have accepted an offer from St. Luke’s Health System.
The pending sale has sparked pleas from state officials that Idaho lawmakers find a better long-term solution for state employee office space, rather than subjecting state taxpayer money to continual and pricey moves.
“Every time we renew a lease, the lease goes up,” said Idaho Department of Administration Director Bob Geddes, while alerting state budget writers of the building purchase Oct. 5.
The Idaho State Tax Commission, the Department of Fish and Game and the Department of Finance — or roughly 500 employees — will be forced to move from downtown Boise’s MK Center once the sale is complete.
However, the tax commission’s lease expires in June — which means the state is on the hook for finding new office space for roughly 375 employees in Boise’s already crowded real estate in just nine months and preferably before the peak of tax return season.
“Our short-term crisis is what do we do to find space for the tax commission?” Geddes said. “The longer term problem is what do we do after that?”
Convincing Idaho’s Republican-dominant Statehouse to funnel tax dollars into purchasing state buildings hasn’t been successful in the past. In 2003, former Gov. Dirk Kempthorne first floated the idea of the state buying the MK Center. The concept was shot down by GOP lawmakers, some who called the plan “absurd.” Others were unwilling to be seen as expanding government.
“I think we’re at a point we need to have a comprehensive discussion about what we see as future planning,” said GOP Sen. Shawn Keough, co-chair of the state’ powerful budget-writing committee, adding that that means considering either purchasing or building new office spaces.
Idaho has 38 leased office locations in the Boise area with an annual cost of $11.3 million. In 1996, the state was renting almost the same in square footage, but the annual cost was $5.3 million.
The estimated cost of moving the tax commission is $1 million due its sizeable staff and technical equipment, said Chairman Ken Roberts. Furthermore, state law requires the tax commission reside in Ada County, forcing the state to only consider pricier options around Boise area unless the law is changed.
“I don’t want to be in this position again,” Roberts said.
According to Geddes, the state had been in the middle of asking lawmakers to purchase the MK Center, but that all stopped when the administration department was notified that an offer from a large nonprofit had already been accepted.
St. Luke’s spokeswoman Anita Kissée said the nonprofit health care system has been leasing enough space for 40 employees in the MK Center, but was recently asked by the building’s owner — a Canadian real estate investment firm — if they would be interested in buying the building.
The extra space will be used for clinical training for providers.
Kissée declined to disclose purchase price, saying the offer was still under contract.