Maine officials signed a contract Thursday with ELC Management Inc. of Portland to lease space for the state Department of Health and Human Services and the state Department of Labor in a proposed office building in South Portland near the Portland International Jetport.
The 30-year lease will save Maine taxpayers more than $23.4 million over the next three decades when compared with rates paid at the current DHHS offices at 161 Marginal Way in Portland, according to H. Sawin Millett Jr., commissioner of the state Department of Administrative and Financial Services.
“The negotiated lease is a great deal for the state,” Millett said in a news release. “Our tough negotiations since the bid was awarded provided for more than $9.4 million of additional savings over the bid price.”
The lease on a 75,000-square-foot building proposed for 151 Jetport Blvd. requires ELC, led by Eric and Kenneth Cianchette, to get all necessary state and local permits by March 15. Construction must start no later than April 16.
The project faces potential delays because Portland landlord Tom Toye, who offered a competing lease proposal, has filed a lawsuit in Cumberland County Superior Court appealing the state’s selection of the ELC proposal. It could take a few months to resolve that case.
The project also needs a site permit from the Maine Department of Environmental Protection, which has 180 days to review the application ELC submitted late last month but usually takes about 60 days. The project is scheduled to go before the South Portland Planning Board on Jan. 28.
The two-story building with 425 parking spaces must be ready for occupancy between Jan. 1, 2015, and Feb. 28, 2015, according to the ELC lease.
However, the DHHS must vacate its Marginal Way offices by Jan. 31, 2015, unless the agency negotiates a lease extension with its current landlord. Otherwise, the agency would have to find interim accommodations if the South Portland building isn’t finished.
The ELC lease allows the state to back out of the South Portland deal if conditions aren’t met, but it doesn’t address whether the DHHS would have to cover the cost of finding interim accommodations if the state waits past Jan. 31, 2015, for the Cianchettes to finish the job.
State officials didn’t respond Thursday to repeated requests for clarification of the ELC lease terms. The Cianchettes haven’t responded to repeated requests for comment since the selection of their proposal was announced in November. It was chosen over three other lease proposals submitted in response to the state’s advertised request.
The South Portland location will consolidate the Cumberland County offices of the DHHS and the labor department, which is located on Lancaster Street in Portland, near the current DHHS building.
Gov. Paul LePage said the move will make it easier for clients to access services provided by both agencies and promote his goal of enabling Mainers to attain economic independence by providing opportunities to move from welfare to work.
“This is a good deal for the taxpayers of Maine, and it consolidates two agencies into one providing Mainers resources and services, which are easily accessible,” LePage said in the news release. “Our administration looks forward to serving Mainers at this new location and continuing to help people identify services and programs that are most helpful and offer training and assistance to successfully transition people from welfare to a career they enjoy.”
Under the terms of the ELC lease, the rate per square foot in the first three years will be $19. Even after escalators provide for periodic increases over the 30-year term, the final price per square foot at the end of the lease in 2045 will remain about $3 less than today’s rate of almost $30 at the current DHHS leased space on Marginal Way, according to the news release.
“This deal demonstrates that bringing sound business practices to government can save money for the taxpayer while improving the delivery of services to clients,” Millett said.
State Sen. Justin Alfond, D-Portland, Portland officials and advocates for DHHS clients have opposed the move to South Portland, saying it will make it difficult for many people to access services.
“Despite ongoing public outcry, Gov. LePage continues to go it alone and do things his own way,” Alfond said in a prepared statement. “I am disappointed that Gov. LePage is continuing to ignore the will of our community and the needs of the tens of thousands of Mainers in Cumberland County.
“The bottom line is that he could make other choices. Gov. LePage could choose a location that best serves the interest of Mainers and saves taxpayers money. Instead, he has dug in his heels.”
Kelley Bouchard can be reached at 791-6328 or at: