This bill changes the authority for the Commissioner of Administration to enter into leases by: (1) increasing the length of time the commissioner is allowed to provide for notice of cancellation of the lease and (2) adding cost-effective environmentally efficient buildings to the list of buildings the commissioner shall review when considering a lease for space in nonstate buildings. The bill also requires the Commissioner of Administration to enter into a request for proposals and contract process to provide lease evaluation services for the commissioner. The contractor would make recommendations to the commissioner for renegotiating leases and making more efficient use of existing space.
Section 1 [Property Leases.] changes the authorization provided in law to the Commissioner of Administration for leases of land and buildings for state purposes by increasing to one year the time limit on the notice period the commissioner may agree to when entering into a lease, and eliminating the prohibition preventing the commissioner from terminating leases if other nonstate-owned property is available for use.
Paragraph (c) adds environmentally efficient buildings to an existing preference in law specifying where the commissioner must first attempt to acquire and utilize lease space. If the building is certified under the leadership in energy and environmental design (LEED) system, the commissioner may consider leasing it unless that space would not be cost-effective compared with available alternatives.
Section 2 [State Real Estate Evaluation Services.] requires the Commissioner of Administration to issue a request for proposals to provide lease evaluation services to the commissioner. The request for proposals must ensure that prospective vendors will identify the specific leases where the commissioner can reduce lease expenditures by:
- renegotiating the lease or cancelling the lease and entering into a different lease at a lower rate;
- identifying current state agency use of space and providing recommendations for more efficient use of the space; and
- disclosing any existing or potential conflicts of interest the vendor may have related to the provision of services under the contract.
Paragraph (b) provides an exemption from the existing statutory requirement that the commissioner certify that no current state employee is able to perform the services required under a state contract with a private vendor.
Subdivision 2 requires the commissioner to enter into a contract for lease evaluation services within ten days after accepting a proposal submitted in response to the request for proposals required by this bill. This section requires the commissioner to enter into a contract for a performance-based financing option that will provide the lesser amount of the following two methods of payment to the vendor:
- half of the cost savings in the first full fiscal year after cost savings have been realized, as determined by the Commissioner of Management and Budget, up to a limit of a dollar per square foot for all leases affected by recommendations made under the contract; or
- the specific dollar amount negotiated by the commissioner and the vendor in the contract required under this section.