Curious Cbus: Why Has This State Building Been Left Vacant?
Near the banks of the Scioto River in downtown Columbus, a white marble building with six floors of office space lies empty and dormant. Orange cones and yellow caution tape near the building's main entrance warn pedestrians of falling debris.
The stone walkways crack and crumble. The building’s main purpose now appears to be a haven for smokers looking for a sheltered spot to light up cigarettes.
For over four decades, 145 S. Front Street housed state government offices, first as the headquarters of the Ohio Bureau of Employment Services and later as the home of the Ohio Department of Job and Family Services (ODJFS). In 2006, employees relocated to make way for a complete building renovation, but due to a mix of bureaucratic red tape, changes in administration, and the economic downturn, the project was never completed.
Twelve years later, the building remains unused. This led one resident to ask WOSU's Curious Cbus project "Why does the State of Ohio rent so much office space when it owns the long-empty building on the south side of the Supreme Court?"
A Brief Biography of A Building
The state of Ohio acquired this strip of land along the Scioto River in 1930, according to records from the Franklin County Auditor's Office. Funded in part with money from the U.S. Dept. of Labor, construction of the building began in the early 1960’s. By 1964, business was well underway.
After decades of use, the building suffered various maintenance problems, and ODJFS relocated its staff in order to renovate the facility in 2006. Cost-benefit statements provided, obtained through a public records request, show that the state expected to save tens of millions of dollars by rehabbing the building and moving back in.
The state hired architectural firm Davis Wince, Ltd. to re-design and update the building. The firm declined to comment for this story, but according to their website, the new building would have included “210,000 square feet of offices on six floors, addition of a new state-of-the-art employee training area, as well as improvements to the surrounding exterior including a new civic plaza fronting the Scioto River.”
Documents show that the state budgeted $24 million for the project. By the time it was put on hold, the state spent about $2.8 million on demolition, asbestos abatement and design, including $341,000 paid to Davis Wince for their work.
The reason the project was shelved in 2008 seems to be a case of bad timing. A spokesperson for ODJFS said that at some point after initial work was done, “it was determined that the cost to rehab would be prohibitive given the economic conditions at that time, the overall costs to improve the facility, and the federally restricted usage requirements.”
"All The Elements Were There"
The state hired Donald McCarthy, president of McCarthy Consulting, to oversee the project when it began. He remembers that the renovation was “a great project with a great team. All the elements were there.” He blames the dissolution of the project on a “perfect storm of a change in administrations and confusion over the Federal government's role.”
In 2006, an election year, the term-limited Gov. Bob Taft would be making way for new leadership. “We all knew that if it got too close to the election, it would be more difficult to get done,” McCarthy said.
McCarthy also recalled that because federal money was used in the building’s construction, there was an added level of red tape to get through. He said that within the Department of Administrative Services, which handles state property management and sales, there was difficulty in discerning exactly what federal guidelines meant for the project.
According to McCarthy, the economic downturn was not a cause in the project’s demise, at least not initially.
“The recession did not play a role,” he said. “For a project like this to get started, the funding is there.”
After the election, work on the project continued through 2008 but by the end of the year, the renovation was officially put on hold.
“It just kind of vaporized,” McCarthy said.
A 2010 ODJFS document requesting bids for property management services at 145 S. Front Street described the building as “currently undergoing renovation” and “unoccupied.” But it also added: “Due to the current budget crisis the state of Ohio is facing, we do not anticipate the renovation project to begin in the near future."
ODJFS seems to have re-examined its office use and the building’s fate in 2011 and 2012. Documents show that there were several options under consideration that moved ODJFS staff from leased offices back to 145 S. Front St.
In those documents, projections stated that getting staff back into the building could potentially create savings ranging from $600,000 to $2.2 million a year.
By this time, the Great Recession was over and state budget cuts and layoffs were in the rearview mirror. Downtown Columbus entered into an investment and construction boom with projects like Columbus Commons, the Scioto Greenways and the restoration of LeVeque Tower in the works.
But this surge of investment in downtown properties passed over the white office building at the corner of Front & Town, where it sat dormant while construction cranes rose up around it.
The building saw little action until 2015 when it was marked for sale in the biennial state budget. The Columbus Dispatch reported that the state was to sell the property for a price “no less than 15 percent below the appraised value set by an outside appraiser.” An appraisal of the property was not available at the time of this reporting, but the Franklin County Auditor’s records show the total market value of the parcel, which includes the Department of Education building (25 S. Front St.) to the north, at over $34 million.
The Department of Education’s headquarters, which was built about the same time and looks almost identical, is still in use. A department spokesperson said that building has no reported major problems.
Legislation passed in 2016 designates the state to sell the property to the Columbus Downtown Development Corporation (CDDC) - a private, non-profit development organization involved in numerous construction projects including the renovation of the Lazarus Building, the transformation of the Scioto Mile and the newly opened National Veterans Memorial and Museum.
ODJFS says that because federal funds were used along with state dollars to construct and maintain the building, the U.S. Department of Labor must approve the sale. It says that discussions with the CDDC continue.
How exactly this language was added to the bill, which primarily dealt with a sales tax exemption for natural gas, remains a mystery. The Ohio Legislative Service Commission does not have records indicating exactly who introduced the language.
It appears the section was added while the bill was in the Ohio Senate Ways and Means Committee. The office of Sen. Bob Peterson, who served as committee chair, indicated that it was added as part of a large block and that there was no record of which specific legislator introduced it.
Though the CDDC is named in the law, Chief Operations Officer Amy Taylor says that it is actually the Columbus Partnership, a nonprofit economic development organization, that is handling the project.
Columbus Partnership EVP and Chief Counsel Stephen Lyons said in an interview that no definitive plans were in place and that the idea to redevelop the property was in “the very early stages” as they were still in the process of “bringing people together to explore possibilities.”
Sale of state property is handled by the Department of Administrative Services. They say that they are aware of legislation authorizing the sale of the 145 S. Front Street building but did not offer further details about the status of a potential sale. According to the law, CDDC and Columbus Partnership have until September of 2019 to negotiate the sale. Otherwise, the property can be sold to other parties.
(Update 10/2/2019: The day before the deadline, on September 27, the Columbus Partnership entered into a real estate purchase agreement to acquire the property for $3 million. The sale is contingent on additional inspections and assessments of the property and will require additional legislation be passed by the General Assembly. The deadline for closing on the sale is September 30, 2020.)
On The Open Market
Doug Falor is a senior director at Cushman & Wakefield, an international commercial real estate firm with offices in Columbus. He says that with the numerous successful renovation projects in the downtown business district, there is definitely interest in 145 S. Front Street.
When one of his clients was looking for downtown office space, Falor said that he spoke with several developers in his search for possibilities.
“They brought this option to my attention... that could satisfy my client’s spatial needs,” he said.
Falor said that none of the developers he’s talked with have been inside the building, so it is difficult to determine its value and potential. With the condition of the building’s mechanical systems and overall finish level unknown, Falor offered a tentative value of $30 to $50 per square foot, a total evaluation of $6-10 million based on the size of the building.
“It will all depend on what’s inside those doors,” he said, but “from a marketing perspective, it would create quite a bit of interest.”
Parking would also be an issue. Falor said he didn’t know the number of parking spaces that would be available within the building, but with parking spots going for between $100 and $200 per month, that cost would have to be factored in as well.
Rent Vs. Own
As to the question of how much space the state leases versus owns for its offices, it’s not easy to get a clear comparison. Ohio owns several large buildings that house government offices, including the Ohio Statehouse, the Riffe Center, and the James A. Rhodes State Office Tower.
According to the Ohio Department of Administrative Services, the “DAS has jurisdiction over nearly 3.1 million square feet of space in Columbus with an occupancy rate of 99 percent for those DAS-managed buildings.” That figure includes real estate owned and leased by the government.
Ohio Treasurer records show many leased offices for state agencies in downtown Columbus, such as the Department of Health, the Attorney General’s Office, the Environmental Protection Agency, and several ODJFS offices.
Documents show that the state once saw the renovation of 145 S. Front St as a good investment that could ultimately save the state money over continuing to lease properties for its staff. At some point between 2012 and 2015, someone decided that the building should be sold.
ODJFS could not detail exactly when, why or by whom that decision was made. ODJFS declined to allow any senior staff to comment on this story and would not allow reporters inside the building.