Commercial Construction Has a “Golden Opportunity” in Texas

Nearly $1 billion in planned construction of state-owned buildings in Texas represents a “golden opportunity” for commercial builders, according to a key official who said this is being done in a conservative way that will end up saving taxpayer dollars in the long term.

Harvey Hilderbran, a Republican former state representative who now serves as the Executive Director of the State Facilities Commission, recently spoke to AGC members at the Texas Building Branch Convention. According to the AGC-TBB newsletter, Hilderbran said the conservative approach "is to take care of what you own, and owning your own buildings are much less expensive than how much we are currently spending on leases.”

“Deferred maintenance is the absence of maintenance,” Hilderbran said. “A lot of state employees are currently housed in leased space. Austin is a very expensive place to lease commercial property. We need to move people out of expensive downtown space."

Most Facilities Commission funding, $983 million, has been set aside for new state building construction, Hilderbran said. The Texas Facilities Commission manages 27 million square feet of leased and owned office space. Of that space, the state owns 100 buildings across eight cities, where 18,000 employees work. TFC also maintains 800 leases across 253 cities, which provides space for about 41,000 employees.

"If the Texas Facilities Commission were a private company, it would be the largest real estate company in the state," Hilderbran said.

The commission in April rolled out its 2016 Texas Capitol Complex Plan. It includes two office buildings and two parking structures in the Capitol Complex at a cost of nearly $510 million. About $71 million will be spent on new underground utility tunnels.

An office building and parking structure on the north side of Austin have a price tag of about $186 million. A new headquarters for the Department of Motor Vehicles will cost roughly $58 million, a new facility and parking structure at the G.J. Sutton Building in San Antonio will cost $132 million; and a parking garage for the Elias Ramirez Building in Houston is pegged at $26 million.

Retiring Sen. Kevin Eltife, R-Tyler, has been a leader in the Legislature trying to move the state away from pouring money into deferred maintenance on deteriorating buildings and instead invest in more efficient new construction.

During a hearing of a Texas Senate committee on the issue, Eltife pointed to the condition of the Hobby Building in downtown Austin and said "it's a disgrace that we have a former elected official's name on the building.” With a heavy sense of irony, Eltife said lawmakers meet in the “pristine” Texas Capitol while many state employees work in buildings that have been described as deplorable by Comptroller Glenn Hegar and others.

"We have not taken care of our properties over the last 15 years. It's sad to see some of the condition of some of these buildings," Eltife said. "If you drive by them and realize it's a state-owned building, you'd be embarrassed to be a part of the Legislature."

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