Economic Development
Senators: sell state building naming rights to offset operating costs
Two state senators would like to see more state-owned buildings branded with paying corporate names like the Weis Farm Show Complex in Harrisburg.
Harrisburg – The Commonwealth of Pennsylvania owns and leases a lot of office space across the state: 16 million square feet in total. This week, two senators from different sides of Pennsylvania – Sen. Dave Argall (R-Schuylkill) and Sen. Randy Vulakovich (R-Allegheny) – unveiled their proposal to sell the naming rights to just about every state-owned office building help offset the operational costs of these facilities.
The proposal comes out of recommendations from a report issued by the Joint State Government Commission at the end of last year in response to a resolution sponsored by the two senators seeking answers to questions they had about reports of unused/unmanned state office space still requiring maintenance, upkeep, and – most importantly – money by the commonwealth.
“We have employees working in rented office space in some of our communities while we have vacant state-owned office space literally right across the street,” Argall said Wednesday.
According to the proposal, currently in co-sponsorship memo form, the legislation will allow the state to sell the naming rights to state-owned buildings, similar to what was done with the Farm Show Complex in 2012 – a move that netted the Commonwealth $750,000 in a five-year contract when Weis bought the naming rights to one of the exposition halls.
While the Joint State Government Commission report does not specifically call for the selling of naming rights, it does suggest creating a repayable fund for renovations to state buildings.
The money from the sale of the naming rights is to be placed in a fund dedicated for the use of maintenance and upkeep of the facilities and require a report from the Department of General Services—the state entity with responsibility over state-managed buildings—to update the General Assembly on the progress of the initiative.
The ultimate goal of the proposal is to move all employees out of leased facilities and into state-owned b buildings, further reducing costs.
“It is no secret we are in a tough fiscal situation right now regarding the upcoming budget and we need to explore innovative ways to cut costs and raise revenue," Sen. Vulakovich added. "This bill...is one step toward bringing in revenue without raising taxes to put us on the road to long-term fiscal solvency."
According to the report, a number of factors have led to unoccupied space in state-owned and state-leased facilities.
"In some cases, necessary heating and ventilation repairs and outdated fire and safety systems make the spaces unusable for state workers. These issues and others are caused by lack of upkeep that has accumulated over the years. DGS has identified that limited funding is typically the biggest obstacle to renovating Commonwealth-owned space," the report read.
"Many agencies prefer leasing over relocation to state-owned space because the cost of expansions or improvements is included in their rent, spreading the cost over a longer period, rather than paying up front."
Additionally, it noted the department is working with the governor’s budget office to potentially develop a fund that would help provide dedicated revenue to renovations.
Other recommendations from the commission’s report include: prioritizing updates to the state inventory system and calculating utilization rates of state office buildings to provide a more comprehensive and transparent picture of the commonwealth’s real estate system; updating documentation of policies and procedures to reflect the current best practices employed by DGS; the consideration of the adoption of an open office layout, teleworking, and desk hoteling when practical; improving two-way communication between DGS and client agencies including performance feedback, and updating DGS about any change in property status; requiring agencies to consider developing long-range facilities plans which are linked to program and strategic planning; continuing consolidation and creation of shared spaced between agencies, including conference rooms, libraries and storage areas.
According to the Senators, the rest of these proposals are likely to be introduced in the near future as a package of bills designed to streamline the way the state procures and leases state office space.
The governor’s office Wednesday took no position on the bill, noting it is still under review.
"While the governor is working to minimize the Commonwealth’s leased footprint, we are currently evaluating and reviewing this proposal," said spokesperson JJ Abbott.
Jason Gottesman is the Harrisburg bureau chief for The PLS Reporter, a non-partisan, online news site devoted to covering Pennsylvania government.