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Portland landlord, mayor condemn decision to consolidate state offices in South Portland

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Portland landlord, mayor condemn decision to consolidate state offices in South Portland

PORTLAND — The owner of two Bayside buildings rejected for new state offices on Monday called the bidding process "a waste of time."

As a result of the state's decision last month, Tom Toye stands to lose the Maine Department of Labor and Department of Health and Human Services as tenants at 185 and 200 Lancaster St. over the next couple of years.

Last week, Toye's bid to renovate the offices for consolidated operations of the two departments and the Workers Compensation Board was rejected by the state in favor of a new development proposed for Jetport Drive in South Portland.

"I was so disappointed with the process, I feel like it was a big waste of time,” Toye said Monday. He said he hasn't decided if he will appeal the decision by the Department of Administrative & Financial Services Bureau of General Services to Maine Superior Court.

An administrative appeal to the bureau was rejected Nov. 20 by William Leet, who directs the agency's Division of Leased Space.

The winning proposal, from ELC Management, headed by Eric Cianchette, calls for an 82,000-square-foot building near the Portland Jetport, on land now owned by Brooklawn Cemetery between the offices of Time Warner Cable and the airport Hilton Garden Inn.

The proposal was one of four received by the Bureau of General Services, and scored highest on a breakdown of location, building quality, management experience, and a combination of lease rates per square foot and additional costs for factors like parking.

Toye's Bayside I and Bayside II locations scored lowest of the proposals, which were limited to sites in Portland and South Portland. Site proposals at 222 St. John St., adjacent to the Union Station Shopping Plaza, and in the Brickhill section of South Portland, near the Long Creek Youth Center, were also rejected.

Bureau spokeswoman Jennifer Smith said the final contract still must be negotiated, and ELC must acquire the land before the contract is signed.

Smith said the state expects to save $14 million or more over the next 20 years on leases by moving to the Jetport-area office building. Leases at Toye's Lancaster Street offices, managed by BRE Boulos, expire over the next two years.

His appeal, filed by attorney Michael Traister, claimed the state picked ELC without considering the true cost of construction could result in additional costs because the state would be liable for cost overruns over $154 per square foot.

The appeal also said the construction cost was not calculated correctly, and that scoring the Jetport proposal 18 points higher than the Bayside proposal for quality and location of the project was "arbitrary and capricious."

Smith said the requests for proposals were scored by Leet and property management officials from the respective departments.

Combining the offices is critical for policy and economic reasons, Department of Labor spokeswoman Julie Rabinowitz said.

"We thought it was a natural opportunity," she said Monday, noting DHHS clients will be able to access Job Center resources like job listings and resume assistance. She said the current locations on Lancaster Street are not as convenient as they could be for joint services.

“You can't see us from DHHS now,” Rabinowitz said.

While bonus points were awarded to the Lancaster Street offices because of location, Smith said the proposal did not meet full qualifications because it called for renovation of two existing buildings instead of having one building for all offices.

The Bayside projected the least expensive lease rates over 20 years, but its projected added cost of parking in nearby lots and garages was also a factor in its rejection.

“The parking component is huge for us,” Smith said.

Like Toye, Portland Mayor Michael Brennan on Monday said he, too, was disappointed by the state decision.

"It doesn't make sense to take these offices and put them in a location that is inconvenient for a significant population," he said. "... This is a bad decision for the city and the people who use these services."

The Lancaster street offices are close to the hub for Metro buses, although the ELC proposal noted the proposed building in South Portland will also be accessible by at least one Metro route.

South Portland City Manager Jim Gailey on Monday said his city's bus service cannot be extended to the proposed location, but riders could receive transfers to ride Metro buses.

Gailey said he is ready to work with developers, but has not had time to consider how the offices could benefit the city in terms of tax revenue.

Rental rates at the proposed Jetport site vary depending on the length of the lease, with a 20-year lease projected to cost $43.3 million, as opposed to $36.4 million for the Bayside properties. However, the state scoring also added $5.3 million in projected parking costs for the Bayside buildings, while Jetport site parking would be free.

The request for proposals required bidders to have parking for at least 425 vehicles and office space for agencies including the Office of Aging and Disability Services; Office of Child and Family Services; Substance Abuse and Mental Health Services, and Maine Center for Disease Control.

Staff writer William Hall contributed to this report. David Harry can be reached at 781-3661 ext. 110 or dharry@theforecaster.net. Follow him on Twitter: @DavidHarry8.