An Augusta Chronicle analysis of city Finance Department records shows Augusta will spend $660,470 on rented office space this year, with the majority going to three landlords: $176,840 to the Augusta Neighborhood Improvement Corp., the owner of a building at 925 Laney-Walker Blvd.; $178,100 to Hutch Holdings, the owner of the New South Building at 360 Bay St.; and $193,152 to the Porter Co., the owner of a former bank building at 985 Broad St. that houses Richmond County Juvenile Court.
Despite the opening of the Augusta Judicial Center and John H. Ruffin Courthouse in April 2011 and available vacant space elsewhere, Augusta is spending more on rent this year than it did a decade ago, when a Finance Department study showed the city could finance a building over 20 years for less than it was spending on rent – $541,731.
Since then, rents have risen, although some of the landlords have changed. Augusta no longer leases space in Augusta Riverfront Center, which was home to the administration of Fire Chief Ronnie Few, and the city leases only a single office in the Hatcher Building at 501 Greene St.
Until the courthouse’s opening, which freed 3 ½ floors of the municipal building, Augusta paid at least $158,861 annually to house the district attorney,
contractor Heery International and the city law office in the Hatcher Building.
Rick Acree, the deputy director for facilities maintenance, was surprised to learn the city was spending more money now than a decade ago, as leased space at the Hatcher Building dwindled last year from two floors to a single suite.
“If you use five years, we are paying less,” Acree said.
Augusta pays the most per square foot, $18.17, to ANIC for the offices of Augusta Housing and Community Development, despite the building’s location in an area officially characterized as blighted. Augusta pays a slightly lower rate, $17.20 per square foot, for Tax Commissioner Steven Kendrick’s eastside tag office on ANIC’s first floor.
Calculating fair market rents is a subjective process based on many factors, including building condition, comparable spaces, size, location, parking, and included amenities and services.
Rents paid using federal funds, as is the case of Housing and Community Development, must be at fair market rates.
By comparison, Class A office space at Augusta Riverfront Center, which includes utilities and maintenance, lists at $21.50 a square foot. State-of-the-art office space in the renovated Enterprise Mill is advertised for $18 a square foot.
City officials say planting city offices in the ANIC building was intended to bolster the blighted community, but a commercial real estate developer performing a market study would likely consider the hefty ANIC rents an anomaly, said Bob Cashin, a retired Augusta commercial Realtor.
“You’d have to throw that comparable out,” Cashin said.
ANIC Executive Director Robert Cooks defended the rent rates based on the building’s size and quality. He said placing a high-end office building there bolsters redevelopment efforts in the area.
“One of the primary benefits from having that much traffic for services on Laney-Walker is people can see the changes,” Cooks said.
Earning the most city rent is the Porter Co., of Hendersonville, N.C., which owns the older but plush former bank building where juvenile court occupies 11,891 square feet. The building housed U.S. District Court while the federal building was being remodeled.
Since 2008, city government has footed the bill – now $193,152 annually, at $16.24 per square foot – for juvenile court to exist in a location separate from adult offenders.
Keeping juveniles apart and protecting their privacy was the theory behind Augusta’s move into the building from a location in the city-owned sheriff’s administration building, despite the 2011 opening of the judicial center and courthouse, according to City Administrator Fred Russell and Superior Court Chief Judge J. Carlisle Overstreet.
“Juvenile court is a joke,” said Augusta Commissioner Joe Jackson. “Why couldn’t the necessary repairs be made and they move (back) into 401” Walton Way, the leaky sheriff’s administration building, soon to be vacated. “When you’re sentencing a child to YDC, why does it have to be marble and champagne glasses?”
The Augusta Utilities Department administration has occupied leased space for a decade at the New South Building on Bay Street, owned by Savannah, Ga.-based Hutch Holdings. The city pays $15.64 per square foot for 11,389 square feet of office space at the building, equal to $178,100 in annual rent.
Augusta gained nearly 50,000 square feet of vacant office space – three of Augusta Municipal Building’s nine floors and part of a fourth – last spring, when most of the judiciary relocated to the new courthouse.
No city official has suggested that departments in rented space be invited to move in, however, and remodeling plans – on hold because of rising construction estimates and a shortage of available funds – include only one office for a department that now occupies rented space.
Commissioners searched for years after consolidation to find appropriate spaces to house merged city and county departments but probably have not acquired enough of them, Commissioner Jerry Brigham said.
“For the most part, I would prefer city offices in city-owned spaces,” he said.
The city recently acquired two more vacant properties on Laney-Walker, the former Penny Savings Bank and Mr. J.’s Famous Door Supper Club. Housing and Community Development will build new offices at the Famous Door site through a lease-purchase agreement, its director, Chester Wheeler, said.
And a third Laney-Walker purchase, still in the works, might replace Utilities’ rent, Russell said.
“We’re trying to get Utilities out of rented space,” he said.
Other city landlords include lawyer Wendell Johnson, listed as the owner of the 602 Greene St. home of University of Georgia Cooperative Extension, horticulture, nutrition and 4-H programs.
About 15 employees occupy 3,094 square feet of the 1890 house next to the Municipal Building. The city pays only $10.66 per square foot there, for a total annual rent of nearly $33,000.
Augusta also budgeted $37,000 this year for rented mobile buildings to house Utilities employees at two locations; $18,000 for leased space for a Natural Resources Conservation Service office at the Hatcher Building; and $12,000 to lease a recyclables transfer station at 3946 Goshen Industrial Blvd.