Fiscal year 2011 annual report [2011]

SPz State Proper













To be the national leader in State real estate portfolio management
by exemplifying stewardship, accountability and integrity.

To advise, guide and maximize Georgia's real estate portfolio by applying industry
best practices in asset, space and transaction management.





Deputy Executive Director



Chairman

Vice-Chairman

Secretary of State Board Secretary

State Treasurer Board Member

Citizen Member appointed by Governor

Citizen Member appointed by Speaker of the House

Citizen Member appointed by



State Properties Commission

Maximizing the Value and Use of Georgia's Real Estate Portfolio

With the creation of the position of State Property Officer and the enactment of legislation realigning the management of the State's capital assets in 2005, the State Properties Commission (SPC) was designated as Georgia's real estate portfolio manager. SPC is responsible for the acquisition and disposition of all State-owned real property and real property interests. Additionally, SPC provides a full array of leasing services to State entities in commercially leased space. SPC also is equipped to conduct studies, research and evaluations and to provide statewide policy leadership and coordinate master planning to guide and implement capital asset management. From the review of State Facility Strategic Plans, maximizing the value of the State's assets, increasing the utilization and efficiency of workplace environments and lease and land transactions, SPC's primary focus is to provide accountability in its

stewardship of the State's assets for the taxpayers of Georgia. By creating enterprise-wide leadership and advice for real estate transactions, asset and space management, SPC is a unified and fully integrated real estate portfolio management office that is being recognized as a model in the public sector.

Portfolio Management

Portfolio Management develops overall real estate strategies and advises OPB on capital budget expenditures. It is comprised of three distinct but coordinated programs:
Asset Management is the strategic function that manages the State's real estate assets to provide the maximum value to the State.
Space Management makes best use of State-owned and leased space by promoting and tracking utilization through standardized space planning to create efficient work environments.
Transaction Management provides for all tasks related to acquiring and disposing of real estate assets, owned or leased, and managing all activities required to lease property for State entities in commercially owned space.

Legislative Agenda
Two resolutions passed during the 2011 Session of the Georgia General Assembly. House Resolution 95 authorizes the State of Georgia, acting through the State Properties Commission, to convey certain State-owned properties in counties around the State. Senate Resolution 103 authorizes the State of Georgia, acting through the State Properties Commission, to grant non-exclusive easements for State-owned properties in various counties.
SPC continued to pursue constitutional and statutory changes which would have authorized the Commission to enter into Multi-Year Leases (MYL) on behalf of State agencies. While there was overall legislative support for these measures (Senate Resolution 84 and Senate Bill 37), the legislation failed to pass both houses. SPC will renew these efforts during the 2012 Session.

2 P a g e



The current disposition process outlined in ing the State's process will enhance the State in becom have far exceeded their useful life and are located in low demand sub-markets. During the 2012 Session, SPC will seek to amend this code section to reduce the time required to sell surplus real property assets by as much as 50 percent.


interest and competition
increase interest income
property is vacant



Tsibility to evaluate the value or interest of Stateowned and leased real property assets and to provide recommendations that increase its value to the State or its market value to the commercial sector. Within this
: Establishing core and non-core designation for each major asset in the portfolio provides a basic foundation for asset and portfolio management and is a starting point for prioritizing assets for evaluation and investment.
measuring costs for comparing asset performance.

: The analysis of a particular asset provides a basis to make portfolio-level decisions around acquiring, disposing or renovating assets to determine current and lifecycle costs, feasibility and highest and best use.
within the portfolio that have the highest importance for surplus, investment or change and is used to continually balance the mix of assets in order to maximize the value to the State.
: Establishing portfolio-level disposition goals and then implementing these procedures is critical in rebalancing portfolio assets to achieve the best combination of cost and utility.







State Owned 143.6 Million Sq. Ft.

o5r0OYledaerrs, o1r3O66lder 1366

84.7%

S1t4a3te.6OYM4ew1ainr4lYtls7o1eie,o6-a55d74rn00s64

1 tYoe2a0rsY,e2a6rs95 2695

Sta2te6.S0LtaMeteilaliLoseneaSsdeqd.-Ft.
15.3%

31-40 Years
31 8to9240

21-30 Years 1394






Bacon Baker Baldwin Banks Barrow Bartow Ben Hill Berrien Bibb Bleckley Brantley Brooks Bryan Bulloch Burke Calhoun Camden Candler Carroll Catoosa Charlton Chatham Cherokee Clarke Clay Clayton Clinch Cobb Columbia Columbus Cook Coweta Crawford Crisp




2 2 37 2 20 5 3 13 35 2 2 21 7 3 3 25 3 17 13 11 0 13 2 12


5 11 51 72 70 13 135 70 112 15 710 120 0 30 13


Dade Dawson DeKalb Decatur Dodge Dooly Dougherty Douglas Early Echols Elbert Emanuel Evans Fannin Floyd Forsyth Franklin Fulton Gilmer Glascock Glynn Gordon Grady Greene
Habersham Hall Hancock Haralson Harris Hart Heard Henry Houston Jackson Jasper


5 5 55 11 12 3 30 11 2 11 13 5 10 10 17 7 11 1 25 10 30 2 11 3 1 3


71 101 331 102 115 72
7 202 225 27 22 17 100 120 121 51 33 5 23 25








Jenkins Johnson Jones Macon Madison Marion Meriwether Miller Mitchell Monroe Montgomery Morgan Murray Muscogee Newton Not Georgia Paulding Peach Pickens Pierce Pike Polk Pulaski Putnam Quitman


5 1 7 13 3 33 3 3 1 7 7 2 13 1 11 21 10 10 5 3 10 2 11


70 31 33 27 30 111 5 10 203 75 51 115 37 31 3 117 13


Schley Screven Seminole Spalding Stephens Stewart Sumter Talbot Taliaferro Taylor Telfair Terrell Thomas Tift Toombs Towns Treutlen Troup Turner Twiggs Union Upson Walker Walton Ware Warren Washington Wayne Webster Wheeler White Wilcox Wilkes Wilkinson Worth


27 12 3 10 5 10 2 3 1 11 3 12 22 3 3 12 13 10 3 13 1 7 17 3 7 5


5 30 20 335 30 10 133 32 232 77 123 12

* Board of Regents, University of Georgia (Aiken, SC)







Equis to assist in identifying methods for the State to generate revenue from surplus or underutilized State this resource, a set of criteria was developed to identify potential surplus properties for disposition. The criteria included size of building or land, insured value and current vacancy percent. This created a preliminary list of properties for further examination. The list was further and others that own property in their own name, and removing properties with highly specialized uses which would make them unlikely to sell.
These State-owned properties are in the custody of numerous State agencies. SPC then initiated an agency in for disposition. The goal of the interview discussions was to collaborate with agency leadership and build ties. SPC continues discussions with State agencies and surplus and can be marketed for sale upon receiving legislative approval early in 2012.


include performing thorough asset evaluations. This includes having a building assessment conducted for Division.
to State owned properties to conduct visual assessments of all the major building components. Those include the building structure, roof, interior, mechanical systems, tions among others. The components are then rated on a 1-100 scale and given a building condition ranking of tion score is also provided.
for each of the building components with descriptive and any major components that are projected to be in need of repair or replacement in the next three-year time period.
with its asset evaluation responsibilities and are proving to be an invaluable decision-making tool, primarily with regard to continued investment and/or disposition recommendations.

State Properties Commission, in collaboration with Georgia State Financing and Investment Commission, conducted a building assessment for Northwest Regional Hospital in Rome, Georgia.






T range of professional planning services to State entities in meeting their space needs. These services include receiving all requests for space, developing space utilization programs to determine square footage design intent drawings to guide workspace layout. The overall goal of Space Management is to maximize the utilization of State-owned and leased space to dards and public sector criteria to accomplish the following objectives:

entities

During FY2011, Space Management (SM) processed any State entity requesting some action relative to workspace needs: new space, renewal, renegotiation, cancellation or other action. With regard to the 50 requests



74%

10%

7%

8%

1%

Administrative/Office Towers Classroom/Training Rooms Other Uses Warehouse/Storage

for new space, SM reviewed Space Utilization Questionnaires and developed Space Utilization Programs to provide guidance for the actual square footage require the new requests for space.

Space Management continually strives to maximize the utilization of State-owned space on Capitol Hill, as well as statewide. Coordinating with the Georgia Build vacant space.



Technical College System of Georgia

26%

Department of Juvenile Justice

11%

Department of Corrections

State Board of Pardons and Paroles

10%

22%

Department of Natural Resources

9%

3% 4%

5%

5%

5%

Department of Behavioral Health and Developmental Disabilities Department of Public Safety
Department of Veterans Service

Others





When the Department of Corrections moved to the syth, SM contacted the Department of Early Care and Building. SM programmed and designed the space to July 1, 2011.


assist in critical portfolio decision-making.
mation related to building conditions will guide SPC ticular assets or properties.
the related building or land (on which the building is element in being able to identify the total property and provides a more streamlined search process.

improve work environments, the Department of Corrections and the Board of Pardons and Paroles requested that SM re-program and co-locate area probation and common areas among agencies that have similar busi



The Space and Transaction Management Track addresses space planning and programming and the space. The system also tracks those requests for admin
a system that will track every demand for space action from the initial request through the completion or ex
manner.
service surveys to measure performance and to identify areas for improvement.

SM will conduct at least one Metro Plan which is a high level portfolio review and assessment of the State's real estate in a particular metropolitan or geographical region. The strategic goal of such real estate planning is to support State agency needs while streamlining or reducing the State's overall costs and operating expenses.
and revise existing space standards and workplace planning to provide greater and enhanced utilization of work environments.


together the appropriate plans in a timely fashion."








T State's leased property portfolio. Services offered range from locating and procuring new leased locations to renewing or renegotiating existing agreements as well as managing the State's lease inventory.


Transaction Management's responsibilities and functions include leasing assistance to State entities in both State-owned or commercially-owned facilities, including space programming and design, lease negotiation and renegotiations and lease opportunities.


Number of leases terminated for FY2011 Number of leases renewed for FY2012 Number of leases renegotiated for FY2012

75 555 220 332 207 100

* Data compiled from BLLIP (www.realpropertiesgeorgia.org) and SPC Quick Base applications. ** Includes relocations



DOR - 653,819 SF DOC - 716,717 SF

DJJ - 435,877 SF DDS - 372,298 SF

TCSG - 913,940 SF

DHS - 3,616,440 SF

80 70 60 50 40 30 20 10
0 Fulton

Dekalb Chatham

Bibb

Hall & Muscogee

data disaster recovery space for the Department of
partment of Juvenile Justice.
tion on Pulaski Street. The second emergency was a gold. The Department of Human Services' Division of Family and Children Services building was so severely damaged that it could not be repaired. Within
tinue operations to serve clients the next day.
share common and auxiliary areas within the same
SPC combined both groups into one space, sharing the lobby, restrooms, break room, conference rooms and the telecommunication closet, thereby reducing the overall square footage space by 1,121 square feet
tion of nearly 220 State leases for FY2012. The leas candidates for rent reductions and renegotiated approximately 23 leases which resulted in cost avoidance of nearly $2,500,000 for State agencies in FY2012.








Canton Cartersville Columbus Conyers Covington Cumming Dallas Dawsonville Decatur Douglasville East Point Gainesville Jonesboro Macon McDonough Morrow Newnan Norcross Savannah Stone Mountain
Tucker Valdosta Woodstock



20.22 21.50 15.25 13.32 17.52 13.77




10.22 12.05 13.25 13.13 13.30




0.21 0.57 5.52
-
(0.77)



2% 30% 22% 10% 50% 33% 51% 25% -2% 0%
-5% 10% 12%
%

*Leases exclude Dept. of Transportation, Board of Regents, Dept. of Labor.

z



Governor Nathan Deal, center, congratulates SPC Transaction Management team members, from left,



T was awarded the Governor's Commendation for Excellence in Customer Service for its successful efforts in renegotiating leases on behalf of State agencies savings and cost avoidance during the recent economic downturn by proactively approaching landlords to renegotiate both existing and expiring leases. These negotiations included reduction in rental rates as well as

adjustments in space and allowances for needed facility improvements.
cant amount of money, they earned the praises of their customers," said SPC Deputy Executive Director Frank you are able to do both and that's what this team has done."


"...they have made certain that they met our needs and have supported us with good customer service."






The Space and Transaction Management Tracking Division in June 2011 is designed to provide a seamless From the initial request to lease execution and move-in,

all steps are tracked via the on-line Quick Base system, allowing SPC to not only provide instant status reports to any interested party but to also manage workload by track performance.

z


Department of Human Services Department of Corrections Technical College System of Georgia Department of Juvenile Justice Department of Community Health Department of Transportation State Board of Pardons and Paroles Department of Driver Services Department of Behavioral Health and Developmental Disabilities
Judicial Branch of Georgia Department of Education State Board of Workers' Compensation





















101





15





120





253











73









1.232%

10





5



1.077%

1



1.077%

25

















50



0.523%

10







7







12











0.352% 0.335%





z

















0.307%



1





Georgia Department of Economic Development





0.221%

Department of Public Health

10



0.210%



2



0.177%

Public Service Commission

2



0.157%



1





Georgia Public Defender Standards Council















Department of Defense

15



0.130%



1



0.122%



5



0.100%

Department of Public Safety









1





Department of Veterans Services









1







2







5







12

$103,011

0.025%

Georgia Public Telecommunications Commission

1





State Properties Commission

1



0.023%



1





Georgia Student Finance Commission

1





State Forestry Commission









1



0.005%

State Employees Credit Union

1









zzzz%






T tions and dispositions of land in the State's name meet the legal and policy requirements of the include purchases or donations of fee simple interests, conservation easements, road and other easements and ground leases. Dispositions include temporary revo-

cable licenses, permanent easements, short or long-term custody and the demolition of buildings. The division provides Statewide agency and individual training for State personnel as needed.

z
FY 2011 SPC Board Actions

16 15

14

12

10

9

8

8

6 4 2

2

2

3

1

3

4

2

0

Acquisitions-Fee Approved
Acquisitions - Conservation Easements Approved
Acquisitions - Easement Approved
Acquisitions - Ground Lease Approved
Reversion-Quit Claim Deed Approved
Disposition-Approve Sale Approved
Revocable License Agreements (RLA's) - SPC
Board... RLA's-SPC Board Not Presented Acquisitions-Fee Not Presented Disposition-Lease Not Presented

15

9

2

2

3

1

8

3

4

2


"SPC has been very helpful and thorough in helping the City of LaGrange with an easement project. Thanks for the good work and friendly service."






tion Study with the primary focus on identifying ap erties for sale. The division also conducted a study bond rated states, to identify best practices and techniques.




sitions and one reversion by quitclaim deed (six others were prepared but not presented for Board review).
short term use, eight for uses approved by Board and three others pulled before consideration by the Board).

nine.


tion of several armories.

2% 15%

3% 15%
11%

FzY2011Legislation

13%

4%

37%

18 Easements Approved
4 Conveyances-To Sell Approved
16 Conveyances-To Local Government or GDOT Approved 5 Conveyances-Ground Leases Approved
45 Easements Omitted from Legislation
14 Conveyances-To Sell Omitted from Legislation
19 Conveyances-To Local Government or GDOT Omitted from Legislation 2 Conveyances-Ground Leases Omitted from Legislation

z

14%

18%

13 Title Certifications

16% 40%

9 Executive Orders 12%
29 RLA's - State Property Officer Approved
12 Training Sessions for other Agencies
10 Create and Revise SPC Forms






Forms and process revisions and improvements for
nel.
ies.

Study and more proactive selection of surplus and underutilized opportunities.



pital and four other agencies' water system easement conveyance.
(Gulch) title research.



z

Per Diem and Fees Computer Software Comp. Parts, Supl., Eq. < $1,000 Telecommunications--Nextel
* UGL Equis contract for disposition project ($180,000); property due dilegence ** Payments to GBA





"...the consummate professional... pleasant, knowledgeable, responsive ... a pleasure to know and to work with."



State Properties Commission
47 Trinity Avenue, Suite G02, Atlanta, Georgia 30334 404-656-5602 Fax 404-651-8084
www.spc.georgia.gov
November 2011