The State of Arizona is moving in the direction of repurchasing the buildings that house its legislature and executive tower.
In a surprise announcement as part of his State of the State address, Governor Doug Ducey announced that a move is underway to purchase the structures that nearly a decade ago were sold to a private investor.
The sale, during the depths of the Great Recession in 2010, was spearheaded by then-Governor Jan Brewer and designed to bring in crucially needed revenue during a time when the state was looking at a $3.2 billion budget shortfall.
Once that transaction was completed, Arizona leased the buildings with the hope of eventually repurchasing the structures when its financial house was back in order.
That transaction garnered national attention and a spot on Comedy Central’s Daily Show making fun of the arrangement.
Now, said Ducey, speaking in the House of Representatives chamber in the State Capitol, “Somebody call the Daily Show—we even own this building again.”
Arizona is able to make the repurchase move because its total debt has fallen below the $800 million mark, prompting lenders to say they no longer need the structures as collateral.
The state is also buying back the building that houses the Arizona Supreme Court, as well as the state fairgrounds property in Phoenix.
The deal, which is expected to save the state up to $109 million in debt payments over the course of the next decade, won’t be finalized until the beginning of the Fiscal Year 2020 budget this summer.
The move comes in the wake of a report issued by the Arizona Department of Administration detailing more than $400 million in government building upgrade needs.
That report, FY 2020 Arizona Department of Administration Building System Capital Improvement Plan, notes that many of the state government’s major building components have “exceeded their useful lives or succumbed to the effects of deferred maintenance.”
The report continues: “There are widespread deficiencies in fire and life safety systems, roofs, HVAC, electrical, plumbing, control systems, parking lots, and interior finishes.”
The report adds that such deficiencies are due to “a chronic lack of funding for basic routine and capital maintenance.”
By Garry Boulard
Get stories like these right to your inbox.