The state owns and leases a number of properties that are underused – and some completely unoccupied – which legislative staff say could be sold for millions of dollars.
There are 17 properties – including a number of historic homes in downtown Raleigh – that the state could dispose of, generating $14.3 million in one-time revenue and $2.6 million in future savings, Sean Hamel, a lead evaluator of the General Assembly’s Program Evaluation Division, said Monday.
Hamel also told a legislative panel that the State Department of Administration, tasked with managing state real estate, lacks criteria and a system for managing state-owned and leased property, resulting in many unused and unneeded properties.
He said that all state agencies should be required to collect, track and report data on these properties, as well as maintain a facilities management plan.
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The state has land and buildings in all 100 counties with an estimated value of $27.5 billion.
The Program Evaluation Division has conducted 49 site inspections since 2013 in Wake County and other areas. Hamel recommended to the Joint Legislative Program Evaluation Oversight Committee that the state dispose of 17 of those.
Twelve of the 17 are houses on North, Blount, and Person streets, built between 1870 and 1947, located just blocks from the State Capitol.
Hamel cited the Heck-Andrews House at 309 N. Blount St. as example of a building that has remained vacant since the state acquired it more than 20 years ago. These homes are in need of repairs, an estimated $18 million in renovation costs, he said, while sale of the houses could result in $11 million in revenue.
The remaining five properties suggested for sale are an animal diagnostic lab in Rose Hill; a gas and calibration station in Wilmington; a 46-acre livestock show and sale facility in Statesville; 6 acres across from the Piedmont Triad Farmer’s Market in Greensboro; and an oil dock, fabrication and storage facility in Garner.
Bill Daughtridge, secretary of the Department of Administration, agreed that there is substantial revenue to be gained from selling underused property but said there has to be cooperation from all state agencies to identify surplus property for reuse or sale.
“A relatively simple change in the statutes could have agencies provide the information necessary for our department to get a better handle on the state’s real estate portfolio and leased space,” Daughtridge said.
The committee accepted the report, yet co-chair Rep. Craig Horn, a Union County Republican, said the chairs decided to refer the matter of disposing of properties to a joint subcommittee, led by Alamance County Republican Sen. Rick Gunn.
“It is my perception that some of the deficiencies we have seen in this report did not happen overnight. This has probably been decades long, through several administrations,” Gunn said. “What we do deserve as taxpayers and stewards of assets for the state is a comprehensive plan.”
Gunn said he is not as concerned about disposing of each of the individual properties discussed in PED’s report as he is about the overall accountability of all the state’s real property investments.