AUGUSTA — State officials are seeking a developer to purchase the former Department of Transportation maintenance garage on Capitol Street, tear it down, and replace it with an 89,000-square-foot office building that the state would then lease back to provide space for two state agencies.

The proposal is the state’s latest effort to get rid of the eight-building property at 109 Capitol St., vacant since October 2014 when the DOT moved its maintenance operations located there for decades to a new facility in north Augusta at 66 Industrial Drive.

At the same time, officials said, the state hopes to replace some aging Department of Health and Human Services office space, including its main office at 221 State St. It also hopes to find new space for the Department of Administrative and Financial Services.

“Our proposal provides investors and developers with a long-term revenue stream that ensures the immediate redevelopment of this site,” said David Heidrich, spokesman for the state Department of Administrative and Financial Services. “For the city, it redevelops a prominent site that is no longer being utilized and returns the property to the tax rolls. From the state’s perspective, it allows us to meet our future space needs while continuing to strike the right balance between leasing and owning property in Augusta.”

Heidrich said most of the state workers who would move to the proposed new building would come from the State Street headquarters of DHHS, which he said is a dated facility that has reached the end of its useful life. He later clarified that part of DAFS’ Division of Financial and Personnel Services will make the move, but the rest of the department’s staff will stay where they are.

However, Maine Center of Disease Control workers would also be relocated to the facility from their current offices at Key Plaza, a prominent downtown Augusta location.

The state’s lease for 58,000 square feet of space in Key Plaza expires in June 2018.

Information included in the packet of materials provided to companies interested in submitting their qualifications for the project includes an office plan that indicates space would be needed for 689 state workers. Included in that total are 280 Center for Disease Control employees now primarily based at Key Plaza at 286 Water St.

Heidrich said that doesn’t mean the state may not move workers from other departments into that space if it can negotiate a new lease.

“While Maine CDC will move out of Key Plaza, that doesn’t necessarily mean that the state won’t negotiate with the Key Plaza owner to put some other state agency in that building,” he said. “However, any renewal would be contingent upon negotiating a favorable lease for the space they have to offer.”

City Manager William Bridgeo said it remains a concern of the city that, in occupying the proposed new office space, the state would move workers from leased space downtown at Key Plaza, and that space could go unoccupied.

“That wouldn’t be healthy for the revitalization of our downtown,” Bridgeo said.

On the plus side, Bridgeo said it would be great to have the property return to the property tax rolls. State-owned property is exempt from local property taxes.

“It’s an eyesore in its present condition,” Bridgeo said of the property. “We had an understanding with the state, when they built a new maintenance garage in north Augusta, this property would be redeveloped and go on the tax rolls. So that’s welcome news.”

Bridgeo, who declined to comment about specifics because he had not yet seen the state’s proposal for the property, said the roughly 90,000-square-foot project would have a less dramatic impact on the city than the previous proposal for a new 225,000-square-foot office facility.

In April, state officials rejected all three bids submitted in response to a request for proposals to provide 225,000 square feet of office space for multiple state agencies within one mile of the State House with room for 1,400 employees and at least 1,300 parking spaces. State officials said at the time none of the three proposals would have saved the state money, so they were rejected.

Those three proposals included one which would have been built on the 109 Capitol St. property. Developer Peter Anastos, in a partnership with Opechee Construction Corp, proposed to build a parking garage and office complex on the site. Anastos had an option to buy the property, which has since expired, putting the property back on the market with an asking price of $1.65 million.

The current proposal is much smaller than the previous office building proposal with a legal ad seeking potential developers to build an “89,000-square-foot open office facility that is economical, (and) energy efficient with onsite parking.”

The state’s request for qualifications specifies it would be leased by the state for no more than $19 per square foot for no longer than 30 years.

The main, faded green building on the 9.2-acre site tucked between the Augusta Plaza on Western Avenue and the state capitol complex was built in 1920. Part of the building is still known as the bullpen because it used to house bulls and oxen that pulled heavy rollers used to pack down snow on roads. Signs painted on the walls of the old place included “Air Raid Shelter” with an arrow pointing to the lowest floor and in the attic “No Spitting on Floor.”

The Maine Historic Preservation Commission reviewed the property and determined the buildings there are neither historically nor architecturally significant, in part because they have been altered and added to a number of times over the years.

The deadline for prospective developers to respond to the state with a letter of interest and a nonrefundable fee of $100 is Sept. 28 with a full response to the request for proposals due by Oct. 27. Potential developers must demonstrate they have the qualifications to undertake the project to be eligible to work on it.

The developer selected for the project would be required to construct a new office building to lease to the state within two years with the state looking to occupy the building by July 2019.

Underground storage tanks have been removed from the property, which previously had a set of gas pumps for state vehicles, and Heidrich said there is no additional environmental cleanup needed at the site that the state knows of. However, Heidrich said if any contamination is discovered, the state would be liable for the cost of remediation of the site.

Keith Edwards — 621-5647

[email protected]

Twitter: @kedwardskj

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