Pa.'s General Services Dept. shouldn't be holding 'fire sale'
All of the arguments put forth by Pennsylvania Auditor General Jack Wagner opposing the sale of the State Office Building in Pittsburgh are valid.
The sale of the 274,000-square-foot, 16-story structure, which occupies a prime, 1.3-acre location at the entrance to Point State Park, for $4.6 million is in fact tantamount to a "fire sale" — the term used by Wagner in describing the transaction.
The state Department of General Services, which is working to carry out the sale, ought to have state taxpayers' financial interests more in focus. It obviously is ignoring the taxpayers' best interests in choosing to sell the building at a time when the real estate market is so depressed.
Wagner asked General Services a month ago to take the State Office Building off the market until economic conditions improve. General Services should have heeded that recommendation rather than move ahead toward selling the building to River Vue Associates LP of Canonsburg, Washington County.
According to Wagner, who is the state's elected independent fiscal watchdog, an alternative to selling the building would be to use federal funds for green technology to rehabilitate the 52-year-old building.
One major question surrounding the proposed sale is why the state would be trying to sell the building when the sale price would not provide enough profit to offset moving expenses and pay for the first year of leases at multiple locations for the affected 800 workers from at least 22 state agencies.
Additionally, as Wagner points out, the decentralization comes at a time when other government agencies are moving to centralize operations in order to save money.
Could it be that General Services is eying this decentralization as a steppingstone to eventual centralization at a new building somewhere in Pittsburgh or in close proximity? If so, Butler County might be able to accommodate such a move.
For now, however, based on what's been disclosed about the proposed transaction, the sale seems like a bad deal for commonwealth taxpayers.
"Under the terms of this sale, the only certain winners are the buyer of the building and the landlords of the office space where state employees will be relocated," Wagner said.
Wagner contends that the State Office Building land alone is worth more than the announced sale price to River Vue. He pointed out that the state has agreed to buy the City of Pittsburgh's Municipal Courts Building, which is one-fifth the size of the State Office Building and in a less desirable location, for $9 million.
In regard to the State Office Building, Harrisburg's thinking leaves much to be desired. If the auditor general's Office of Special Investigations compiles the kind of compelling evidence that seems in reach to discourage the sale, General Serv-ices should, if possible, pull back from its intention.
This is a time to be thinking of the state's financially strapped taxpayers, rather than to be conducting a fire sale.
The selling price is much too low.