It's The State's Move

August 15, 2006
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GRAND RAPIDS — The ball is firmly planted in the state’s court, now that city and county commissioners reached an agreement on a deal that could lead to a future location for the currently overcrowded Department of Human Services office.

Since county commissioners agreed to a $2 million land option that city commissioners approved earlier, Kent County Administrator and Controller Daryl Delabbio is hoping that Lansing will sign a long-term lease with the county soon on behalf of the state agency.

“Our first preference is to work with the state to have an agreement entered into so we can look into the Sheldon property as a viable option for the DHS building. But if that falls through for whatever reason, the backup for us at some point in time is to sell our ownership of the 415 Franklin facility,” he said.

Delabbio said the county is putting together an RFP to sell that facility, the current home of DHS. The RFP could be ready this fall; the county would consider all offers it receives for the property. The buyer would become the state’s landlord, as Lansing is currently leasing the building on a monthly basis, and would have the option of continuing the current lease, trying to sign the state to a long-term one, or giving the state a 30-day notice to vacate.

The county isn’t responsible for providing a place for DHS to set up shop, as the agency comes under the domain of the state government. And the county owns the building DHS is in and has every right to sell it. So if a new landlord decided to evict DHS, the state would have to come up with another location for that office.

But as Delabbio pointed out, the county wants the state to sign a long-term lease so Kent could begin plans to build a new $27 million building that would also house a county health clinic, the Area Community Service and Training Council, and the Michigan Works office on 4.3 acres at 121 Franklin St. SE, the current address of the Sheldon Complex.

Delabbio estimated that the state would lease about 85 percent of a new building. Like any developer, he said the county wouldn’t proceed with construction plans until it has a tenant under contract. He added that the state has similar leases with other counties.

“We have to finalize the RFP and we probably won’t see proposals until September, at the earliest. We will evaluate them. At the same time, we will be working with the state on this leasing agreement. On any RFP that we issue, the county will reserve the right to accept or reject any proposals,” he said.

The land option gives the county first crack at buying three properties on the southeast side of the city for roughly $2 million. In addition to 121 Franklin St. SE, the county can purchase a third of an acre at 801 Jefferson Ave. SE and 1.3 acres at 811 Jefferson Ave. SE, an address the city plans to buy from Grand Rapids Public Schools. The sale price for each is the appraised value.

The county would issue municipal bonds to pay for the construction of a new building, which would only go up with a signed lease with the state.

If the county were to reach an agreement with the state relatively soon, Delabbio said Kent may not put the Franklin Street property up for sale right away.

“It will take a couple of years for the new building to be constructed,” he said. “At that point, we will know that we will have a deal with the state, and we can plan on having a new building and then transfer ownership [of the Franklin building] to a new entity.”    

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