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Real Estate Development - State Office Building Project

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With the goal of attracting more private investment to the City of Trenton by reducing the footprint of State Office buildings in the downtown, the New Jersey Economic Development Authority (EDA) has been tasked with overseeing and financing the State Office Building project, which involves the new construction of two buildings to house the departments of Agriculture and Health Administration, Health Lab, and Taxation.  Below is an overview of the project’s genesis and expected next steps.


BACKGROUND

 
Between 2011 and 2013, the New Jersey Division of Property Management & Construction (DPMC) within the New Jersey Department of the Treasury engaged architecture and design firm Lammey & Giorgio, P.A. to complete preliminary studies of building conditions for the Department of Agriculture and Health Administration, Health Lab, and Taxation buildings, as well as costs to rehabilitate, demolish, and construct replacement space.
 
Treasury requested that the EDA prepare a feasibility study to build on the assumptions in the preliminary report and make recommendations for the most cost effective solution for the relocation of the departments that currently occupy these spaces.
 
DPMC and EDA view the development of state offices as vital to the ongoing revitalization of the City of Trenton.  The EDA previously developed the Trenton State Office Complex, which includes state offices and ground floor retail at 225 E. State Street, and completed the full rehabilitation of Capital Place One at 200 South Warren Street. Through a Memorandum of Understanding (MOU) signed in August 2014, EDA also provides staff to advance the mission of the CCRC, which is charged with planning for and ensuring that the Capital District is a great place to live, visit, work and conduct business.
 
The State Office Building project furthers the State’s efforts in space efficiency and cost savings, while also bringing catalytic investment to the West State Street/South Broad Street corridor, anchored by the new Thomas Edison School of Nursing and the new Courthouse and connected by the most pedestrian utilized and vibrant streets in the Downtown. 


FEASIBILITY STUDY

 
Under an MOU approved by the Board of EDA in June 2014, EDA procured consultants to prepare and complete the feasibility study for the Department of Agriculture and Health Administration, Health Lab, and Taxation buildings.
 
This study considered occupancy alternatives for keeping these agencies in Trenton and provided recommendations as to whether it would be more cost effective to retain the existing conditions with deferred capital improvements, rehabilitate the existing buildings, relocate their occupants to newly constructed buildings, or lease new space either in Trenton or a neighboring town.  
 
With the assistance of KSS Architects, the feasibility study commenced at the beginning of 2015.  The study included an analysis of the current and future occupancy needs of these buildings/occupants resulting in a space program, site analysis of several targeted State owned parcels, cost estimates to build new vs. rehabilitate existing, and a financial analysis of these occupancy alternatives. 
 
The feasibility study was completed in May 2015, and concluded that the (i) best alternative would be to replace the Health, Agriculture and Taxation buildings with two (2) new buildings that could be developed at several alternative locations; (ii) existing Health and Agriculture buildings should be demolished; and (iii) Taxation building could be demolished, rehabilitated for another use, or sold as-is on the open market through a competitive process as determined by DPMC in its sole discretion.
 
A Net Present Value analysis determined that new construction was the preferred option as compared to renovating the obsolete structures, or leasing alternative space, because:
 
  • Rehabilitation and the existing conditions options would have retained the current square footage (414,000); the new construction alternative reduces the total square footage to approximately 303,000 square feet, making the space more efficient and less expensive to operate and maintain.
 
  • Leasing equivalent space of approximately 304,500 square feet is more expensive – rent plus operating expenses – than the debt service and operating expenses of the new construction alternatives.
 
New construction involves a ±7 story (±175,000 SF) building on an existing State parking lot on the northwest corner of John Fitch Way and South Warren Street; and, a ±5 story (±135,000 SF) building on an existing State parking lot on the southwest corner of North Willow and West Hanover Streets.
 
Pros of the new construction option include:
 
  • Lower cost solution
  • Efficient floor plans, using less than 200 square feet/person
  • Better day lighting to interior space
  • Warren Street location conforms to Trenton Riverfront District Master Plan
 

​LOCAL INPUT

 
EDA presented the feasibility study to DPMC and the City of Trenton Department of Economic Development; DPMC and the City selected the new construction alternative involving the ±7 story building on the northwest corner of John Fitch Way and South Warren Street and the ±5 story building on the southwest corner of North Willow and West Hanover Streets.
 
Additionally, interaction with the City and the CCRC Board throughout the planning process has resulted in several recommendations that the EDA has implemented. This includes:
  • Eliminate cafeterias from the new building plans to encourage a vibrant streetscape with pedestrian activity, including      patronage of local restaurants and services.
 
  • Include as a requirement in the RFP that the architect be familiar with the principles of CCRC’s Urban Code and Design Principals and Standards. 
 
  • Include as a requirement in the RFP that the architect hold a stakeholder meeting/design charrette to solicit feedback.
 
  • Include in the RFP a non-binding alternative to provide a structured parking garage. Consistent with the City’s Master Plan goals, a parking garage would facilitate the use of surface parking lots as development pad sites and provide ample parking options for residents and visitors to take advantage of a vibrant downtown.  Financing has not been identified for this element.
  • Ongoing discussions that may lead to the inclusion of both a rehab and demolition option related to the Taxation building.
 


STATUS

 
The EDA released a Request for Qualifications (RFQ) for Architectural & Engineering Services, and an RFQ for Construction Management Services, with responses due October 28, 2016.  Per the RFQ, the EDA subsequently selected a list of firms to receive the Request for Proposals (RFP).  At its February 2017 Board meeting, the EDA approved the selection of HDR Architects & Engineers, P.C. as the Architectural/Engineering firm of record and Turner Construction Company as the Construction Manager of record for the Health/Agriculture Project; and, the selection of The Ballinger Company, as the Architectural/Engineering firm of record and Torcon. Inc. as the Construction Manager of record for the Taxation Project.

 

​NEXT STEPS AND PROJECTED TIMELINES

 
State Office Building Design Presentation
Wednesday, June 14, 2017
9:00 a.m.
EDA Board Room, 36 West State Street, Trenton 

Phase I 
  • Design Development Completion (excludes construction documents) – Late Summer/Early Fall 2017
  • DPMC/Statehouse/SUC Approvals – Late Summer/Early Fall 2017
  • EDA Final Budget and Bond Approval – Late Summer/Early Fall 2017
  • Bond Issuance – Late Fall/Early Winter 2017

Phase II 
  • Construction Documents (CDs) - November 2017
  • Construction Phase - May 2018 - November 2019
  • Demolition - September 2019 (if required)
 
Note: This information will be updated as progress is made and posted to the EDA website via www.njeda.com/StateOfficeBuilding.


Links


Board Memo (2/14/2017) - Selection of HDR Architects & Engineers, P.C., as Architectural/Engineering (A/E) firm of record and Turner Construction Company, as the Construction Manager (CM) of record for the Health/Agriculture Project.

Board Memo (2/14/2017) - Selection of The Ballinger Company, as Architectural/Engineering (A/F) firm of record and Torcon, Inc. as the Construction Manager (CM) of record for the Taxation Project.

Information on benefits for businesses expanding in or relocating to Trenton

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Trenton company offered $33M in tax credits to stay in N.J. (NJ.com, 6/21/2016)
$33.6M incentive for Trenton company to stay in N.J. 1 of 7 approved by EDA (NJBIZ, 6/15/2016)


Capital City Redeveopment Corporation (CCRC)


Click here to visit CCRC's website