State agrees to buy St. Louis office building
Jefferson City, MO – The state of Missouri has agreed to buy an office building in St. Louis after more than a year of haggling at the Capitol.
Governor Matt Blunt's office claimed the state was paying too much on a 15-year lease of the building at 3101 Chouteau, but previous efforts to lower the rent or buy the building failed.
The state was preparing to back out of the lease at the end of June, and building owner Charles Hennemeyer sued to try to prevent that.
But representatives of Hennemeyer and Blunt's administration now say they've agreed on a sale price. The sale is expected to close June 30th, though the purchase price has not been disclosed yet.
Blunt's administration had claimed the $1.3 million annual lease payment agreed to five years ago under Gov. Bob Holden's administration was excessive for the 65,000-square-foot building on Chouteau (between Grand and Jefferson). Hennemeyer disputed that.
Blunt's administration sought to break the 15-year lease by removing the rent payment from the proposed budget for the fiscal year that starts July 1.
Hennemeyer's lawsuit claimed Blunt's Office of Administration failed to act in good faith by encouraging lawmakers not to fund the lease payments. The lawsuit also claimed Blunt's administration was ending the lease because Hennemeyer contributed money to a rival gubernatorial candidate. Hennemeyer had donated to Holden, a Democrat, in 2003-2004. But a spokesman for Blunt, a Republican, denied any political retribution was involved.
Some financial experts had raised concerns that breaking the lease could lead to a perception in financial markets that loaning money for buildings leased by the state would carry a greater risk in the future. Legislative budget writers had strongly encouraged Blunt's administration to reach a compromise with Hennemeyer.
"I think what led to a resolution was continued concerns from legislators and statewide elected officials that canceling a lease was not in the best interest of the state of Missouri," said Hennemeyer's lobbyist, Richard McIntosh. He said Hennemeyer is receiving "a fair and reasonable price" for the building.
Dave Mosby, the facilities director for Blunt's Office of Administration, said the deal also is good for the state. "The building is an appropriate building for our needs," Mosby said, and "we've accomplished our goal by reducing our costs." The building currently includes offices for probation and parole, mental health and vocational rehabilitation.
Of those, only the probation and parole office will remain and it will be reduced in size, Mosby said. The rest of the space will be filled by a Division of Family Support office moved there from another St. Louis location.