20 18 REAL ESTATE STRATEGY February 6, 2018 Overview of Real - - PowerPoint PPT Presentation

20 18 REAL ESTATE STRATEGY

February 6, 2018

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Overview of Real Estate Portfolio

General Gov’t 34M Higher Education, 63M State Portfolio 97M SF

State Map – General Gov’t Owned and Leased Properties

84% owned 16% leased

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Guiding Principles

1. Program requirements and government initiatives drive real estate strategies

• 1. Manage real estate

efficiently 2. Employ financial metrics in decision making

• 2. Implement real estate industry best

practices 3. Reduce the size of the real estate portfolio

• 3. Improve building maintenance funding
• 4. Develop strategic real estate plans

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Guiding Principles

• 1. Program requirements and government initiatives drive real estate

Middle Tennessee State Veterans Cemetery Nashville, TN

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Guiding Principles

• 2. Employ financial metrics in decision making

$0 $2 $4 $6 $8 Year 10 Year 15 Year 20

Millions

South Central Regional Health Building Lease vs. Own Cost Comparison

Cost to Own Cost to Lease

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Guiding Principles

• 3. Reduce the size of the real estate portfolio

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Real Estate Strategies

Manage Real Estate Efficiently

36 73 232 50 100 150 200 250 FY16 FY17 FY18

Capital Project Charter Implementation

FY16 – FY18

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Real Estate Strategies

Manage Real Estate Efficiently

89% 90% 93% 96% 75% 80% 85% 90% 95% 100% 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

On-time and Within Budget Capital Project Delivery

FY17

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Downtown Nashville Strategic Real Estate Plan

Mov es to Cord ell Hull

War Memorial 43,450 SF Legislative Plaza 53,887 SF Rachel Jackson 34,560 SF James K. Polk Comptroller: 88,866 SF Cordell Hull 323,827 SF

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Downtown Nashville Strategic Real Estate Plan

Foreca sted Va ca ncies – By Yea r-end 20 18

TN Tower: 38,105 SF Legislative Plaza 57,351 SF Rachel Jackson 25,865 SF Citizens Plaza: 244,957 SF Davy Crockett: 7,113 SF James K. Polk – Tower only 42,447 SF War Memorial 43,450 SF

Total Vacancy:

459,288 SF

W/O Citizens Plaza:

214,331 SF

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Citizens Plaza

Elim ination of unneeded buildings

• Est. Sale Date:
• Oct. 2018

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Key Project Highlights

• New Tennessee State

Museum

• New Tennessee State Library

and Archives

• State Capitol Cupola
• Legislative Plaza and War

Memorial Building

• John Sevier Building
• Andrew Jackson – Elevator

replacement

• Memphis Regional Megasite

– Wastewater improvements

• James K. Polk – TPAC

Renovation

• Multi-agency Law

Enforcement Training Campus – Cockrill Bend

RECOMMENDED FY19 CAPITAL BUDGET

Funding Approach Funding was based on analysis and recommendation by the Department of General Services and the Higher Education Commission.

Recom m ended FY19 Capital Budget

Maintenance $215,520,000 Improvements $231,117,000 $446,637,000 State $184,608,000 Federal $3,405,000 Other $140,189,000 Bonds $118,435,000

Maintenance and Im provem ents

$0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 FY 2011-2012 FY 2012-2013 FY 2013-2014 FY 2014-2015 FY 2015-2016 FY 2016-2017 FY 2017-2018 FY 2018-2019 $ Millions Total Maintenance Total Improvements

Recom m ended FY19 Capital Budget

Total Maintenance 123 Projects Total Improvements 17 Projects

Maintenance Projects

• No. of

Projects % of All Mtce Projects Type of Project 49 40% Building Systems - HVAC, Electrical, Lights, etc. 31 25% Building Envelope - Roofs, Walls, Doors, Windows 4 3% Elevator Repairs and Modernization 4 3% Paving & Parking 4 3% Restroom Remodel and ADA Compliance 9 7% Security - Security Doors, Locks, Fencing 22 18% Various Other Projects 123 100%

Capital Im provem ent Highlights

Library & Archives $57.6M * TennCare Building Purchase $30.1M * Memphis Megasite $30.7M * MTSU Academic Classroom Building $38.0M Cleveland State $25.0M UTIA - Energy & Environ Science Bldg $4.0M UTIA - Vet Med Center Teaching Ctr $9.0M TCAT Improvements $14.5M *Funded from Bonds

GO Bond Authorizations

$- $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 $300,000,000 $350,000,000 $400,000,000 $450,000,000 $500,000,000 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019

Debt Service History

Fiscal Yr GO Debt Service Highway Debt Service Total Debt Service from Taxes and Other Revenues Change As a %

• f

Taxes FY 09-10 $314,185,000 $115,800,000 $429,985,000 4.3% FY 10-11 290,653,000 108,200,000 398,853,000

• 7.2%

3.8% FY 11-12 298,214,000 107,000,000 405,214,000 1.6% 3.6% FY 12-13 329,460,000 107,000,000 436,460,000 7.7% 3.7% FY 13-14 332,324,000 110,000,000 442,324,000 1.3% 3.8% FY 14-15 311,964,000 88,700,000 400,664,000

• 9.4%

3.2% FY 15-16 341,055,000 88,800,000 429,855,000 7.3% 3.4% FY 16-17 332,954,000 92,100,000 425,054,000

• 1.1%

3.1% FY 17-18 296,508,000 83,800,000 380,308,000

• 10.5%

2.7% FY 18-19 Rec 286,947,000 80,200,000 367,147,000

• 3.5%

2.6% Since FY10

• 8.67%
• 30.74%
• 14.61%

Debt Service as a Percent of Taxes

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% FY 09-10 FY 10-11 FY 11-12 FY 12-13 FY 13-14 FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 Rec