State officials are planning a $46.5 million state office building in the Capitol complex – an effort to move state workers out of higher-cost rented space in downtown Denver.
The 10-story building would replace a surface parking lot on the northeast corner of East Colfax Avenue and Lincoln Street and a parking structure along Sherman Street.
The state plans to tear down the existing garage at 1555 Sherman St. this spring.
The new building would house between 750 and 940 state workers and would include 264 parking stalls. Construction would begin in the 2007-08 fiscal year, with occupancy in 2009-10.
Jeff Wells, executive director of the state department of planning and personnel, on Thursday asked a panel of state lawmakers for $1.7 million to cover the costs of hiring architects and engineers to plan the construction.
“Most of the state’s leases come due in five to 10 years,” Wells said. “If we convert it into state-used space, it will result in savings for the taxpayers.”
The state would issue “certificates of participation” to cover the remaining costs of the 313,000-square-foot structure. Such certificates are repaid with money generated by the building itself.
Wells said he expects to rent retail space on the ground floor along Lincoln. State departments occupying the office space would pay rent, and people parking in the building’s garage would pay fees.
Based on preliminary estimates, the building would generate about $4.3 million in fees, enough to pay off the certificates in 20 years.
Wells said that some agencies, such as the state department of labor, get significant funding from the federal government that covers the cost of renting space. In addition, all agencies in state office buildings must pay for maintenance of the space.
Sen. Andy McElhany, R-Colorado Springs, asked Wells if he would wrap the up-front architecture and engineering costs into the certificates so that the building would be entirely funded through the certificates.
Wells said that he would consider that option but was asking for money now because there was no cash flow yet to pay for the costs of preparing the building.
Staff writer Mark P. Couch can be reached at 303-820-1794 or mcouch@denverpost.com.
