Fiscal Analysis

StateBuilding Authority Leases

Bill/Sponsor

House Concurrent Resolutions 23 & 24/Rep. Morris Hood III

House Committee

Appropriations

Analysis

Summary

To approve standard State Building Authority (SBA) lease agreements between the SBA and the State for Capital Outlay projects as shown in the table below.  These properties are also conveyed to the SBA by the resolutions.  Both projects received planning, cost, and construction authorizations under previous Capital Outlay budget acts and are under construction.

Approval of these resolutions is the final remaining legal requirement to allow the SBA to issue both short and long-term debt instruments to finance the State's share of each project's construction costs.

The Joint Capital Outlay Subcommittee (JCOS) approved these resolutions, with recommendation.  The Department of Management and Budget also recommends approval.

State Fiscal Impact

Legislative adoption of the resolutions commits the State to annually pay rent to the SBA until its debt obligations are fully satisfied.  The annual GF/GP high/low rental range of $1,665,000 to $2,109,000 is provided consistent with the State Building Authority Act (PA 183 of 1964).  The actual rental amount, within or below the respective ranges, will be determined by an independent appraiser when each project is completed.



HCR/Project

Total Authorized Project Cost

StateBuilding Authority Funds

GF/GP Rent Estimate on SBA Financing

HCR 23.  State Facility Preservation Projects –Group B General OfficeBuilding Renovations.  Project entails renovating this 263,200 sq. ft. facility for energy efficiencies and code compliance for electrical, heating, cooling, and fire systems.  Cost/construction authorizations provided under PA 10 of 2005.

$10,950,000

$10,950,000

$850,000 to $1,077,000

HCR 24.  State Facility Preservation Projects – Group CGrand Rapids OfficeBuilding Renovations.  Project entails renovating this 114,600 sq. ft. facility for energy efficiencies and code compliance for elevators, electrical, heating, cooling, and fire systems.  Exterior repairs and waterproofing will also be completed.   Cost/construction authorizations provided under PA 10 of 2005.

$10,500,000

$10,500,000

$815,000 to $1,032,000

Totals

$21,450,000

$21,450,000

$1,665,000 to $2,109,000

Local Fiscal Impact

None

Analyst(s)

Al Valenzio

                 Mitchell Bean, Director - House Fiscal Agency

124 N. Capitol Avenue, Lansing, MI 48909

 Phone: (517)373-8080, Fax: (517)373-5874

 http://www.house.mi.gov/hfa