From the Triangle Business Journal on February 14, 2014…
According to a report from the State Construction Office, North Carolina is facing more than $3.9 billion in building deficiencies statewide because of deferred maintenance and repair issues, much of that among the state government’s downtown Raleigh complex. Some buildings are so bad off that state agencies have started looking for leased office space, reports the Triangle Business Journal. Speros Fleggas, deputy secretary for the North Carolina Department of Administration, said his office cheered last year when Gov. Pat McCrory allocated $150 million in his budget for repairs and renovations to the state’s $25.6 billion inventory of state and university buildings, but that the amount falls far short. Only $90 million of that $150 million went to buildings that are not on university campuses, and even that money had to be spread around to dozens of properties across the state. Most of the money is now filtering to the construction contractors, architects, engineers and suppliers for repairs that won’t even be that noticeable to the public. Such repairs include sealing and crack repair on a parking deck, fire alarm replacement at the North Carolina Museum of History and new light fixtures for the downtown government complex.
At the Council of State’s meeting in February, members approved the SBI’s request to move its unit that processes fingerprints and criminal background checks to leased space in a privately-owned office building in north Raleigh. The unit has been working in a building constructed in 1931 containing both asbestos and lead-based paint. Fleggas says his office does the best it can with the resources it is allocated, but a conventional maintenance and repair budget should range from 2 percent to 4 percent of a building’s value each year just to make sure the building doesn’t decline. For North Carolina’s $25.6 billion building inventory, that would amount to between $512 million and $1 billion per year in maintenance and repair costs. The legislature funded an average $65.7 million for repairs and renovations between 2000 and 2010, according to Sen. Neal Hunt of Raleigh. The state has funded an average of $74.4 million per year between 2011 and 2014.
The construction industry is hoping the state will tap the additional debt capacity that could be available this year for capital projects. According to the treasurer’s 2014 Debt Affordability Study, the state’s general fund will have an additional debt capacity of $570 million for each of the next 10 years, according to Dave Simpson, Carolinas AGC’s North Carolina government relations and building director.