Gov. David Ige has given the nod to plans to purchase upscale 25-story downtown office building Alii Place to provide more office space for state workers, but the purchase is not a done deal quite yet.
The state has been in discussions with building owners Bristol Alii Holdings LLC of San Francisco to buy Alii Place for about $90 million, an option some lawmakers say would be far cheaper than plans to build new office space in the planned Liliha Civic Center.
The state now rents more than 420,000 square feet of office space in the downtown area for $10.15 million a year, and has been considering paying an estimated $270 million to construct office space at the Liliha Civil Center site.
Instead, lawmakers this year proposed the Alii Place purchase as an alternative, suggesting that purchasing space instead of building a new facility will save the state tens of millions of dollars.
The Legislature then passed a measure appropriating $500,000 to pay for the necessary due diligence, legal costs and closing costs to finalize the deal if the Alii Place purchase makes sense. Ige signed that bill into law on June 30 as Act 183.
“The governor believes it’s worthwhile to explore the proposed purchase of Alii Place as an alternative to constructing a new state office building in Liliha,” said Cindy McMillan, communications director for Ige. “A rigorous due-diligence process will be undertaken before making a decision on the proposal.”
Lawmakers say 114,663 square feet or about a third of the space in the building is vacant, and could be quickly used to house state agencies and offices that now rent space in private buildings. They contend that building new space for state workers would take years, and could result in cost overruns.
Alii Place is marketed as a “prestigious corporate environment” complete with a lobby decorated in marble and a fountain outside the entrance facing Hotel Street. It was designed to be energy-efficient, which would reduce the state’s operating expenses.
Officials with the state Department of Accounting and General Services have said they do not have the staff to maintain Alii Place, but Act 183 requires that if the sale of the building closes within the next two years, the state will retain the current building management company.