
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, May 14, 1993                   TAG: 9305140399
SECTION: EDITORIAL                    PAGE: A-8   EDITION: METRO 
SOURCE: THOMAS W. MOSS JR.
DATELINE:                                 LENGTH: Medium

NEW STATE BUILDING NO `FRIVOLOUS' PROJECT

AS SPEAKER of the House of Delegates, I take strong exception to the misinformation in the press about the General Assembly's recent decision to authorize construction of a state office building in downtown Richmond as one project in a bond issue comprised of adult prisons, juvenile facilities and other structures to be built at various locations in the commonwealth. Among several agencies scheduled to be housed in the office building is the State Lottery Department.

The rhetoric that has emerged since that time simply is not supported by the facts. Our action has been unfairly characterized as frivolous when in fact it makes good business sense. The General Assembly has an ongoing responsibility to conduct the commonwealth's business in a way that maximizes the return on taxes paid by Virginians. We cannot shrink from that responsibility on the chance that something will be politically unpopular.

Our April 7 decision to approve construction of the building had everything to do with prudent business and nothing to do with frivolity. I hope the following facts will lay to rest the second-guessing of our motives and wisdom with regard to this matter:

The state has owned property at 9th and Broad streets in Richmond for some years. The parcels, which are within the master-site plan for the capitol complex, were acquired as they became available, specifically for the purpose of development and to eliminate the blight in an area adjacent to the capitol.

The state has numerous agencies located in private rental spaces, which are subject to rent-escalation and cancellation clauses. The lottery department is only one of seven state agencies that will occupy this new building. The combined rent paid by these agencies now approximates $2 million a year.

The state can construct and operate an office building on its own property to accommodate these agencies at a cost of $2.2 million a year, which is just slightly more than what the agencies are paying to rent space. By doing so, we can avoid lease-escalation clauses in private space that very quickly will overshadow the cost of ownership.

In today's dollars, the state can save up to $13 million during the 20-year period that bonds will be retired on the office building. We will then own a building that will have substantial remaining useful life and related asset value. The alternative to ownership is a handful of rent receipts.

Other options, like buying an existing building, i.e., the Farm Bureau Building, were considered and ruled out because they did not meet our total space needs, or were outside the master-site plan. The Farm Bureau Building, for example, would have cost as much or more on a square-foot basis when renovation was considered. Plus, there were potential hidden costs like the presence of asbestos. This would have resulted in a far less efficient building.

The bond market and construction climate are more favorable now than they have been in years. Since the state's plan has always been to construct an office building on its property, now is the right time to proceed.

When all of the facts are considered, I believe the General Assembly made a prudent decision to invest in a new office building. It is this prudent approach to conducting the people's business that led Financial World magazine to designate Virginia the best-managed state for the second consecutive year.

Thomas W. Moss Jr. is speaker of the Virginia House of Delegates in Richmond.

by CNB