Capital building kerfuffle adds to state budget woes

To lease or to own, that is the question.

It’s vexed state lawmakers for months as they consider moving the Washington State Patrol into new digs.

The House and Senate can’t agree on the answer, adding fuel to the interminable political wrangling in Olympia that’s pushed the state ever closer to a shutdown.

It puts at risk a new state construction budget that would pay for such things as a new cafeteria at Marysville Pilchuck High School and a Washington State University building in Everett.

Here’s the problem: The General Administration building on the Capitol Campus is an aging edifice capable of collapse in the next good-sized earthquake. Lawmakers want to relocate its occupants, many of whom work for the State Patrol.

Two years ago, they settled on a plan to tear down another state-owned building a couple blocks away and replace it with a gleaming new energy efficient one for the State Patrol and other agencies.

The 2013-15 capital budget contained cash for demolition and design. But they messed up the language in a way that made it impossible for the state treasurer to sell the bond-like “certificates of participation” needed to finance construction.

When Rep. Hans Dunshee, D-Snohomish, the project’s chief cheerleader and chairman of the House Capital Budget Committee, set out to fix it this year he found the Republican-led Senate no longer wants to proceed.

Sen. Jim Honeyford, R-Sunnyside, architect of the Senate capital budget, said his party now figures it might be cheaper to lease existing office space rather than build something new. They want a fresh analysis of the options before moving ahead.

But Dunshee said that’s not the reason for the change of heart. He contends it’s because of the influence of an Arlington businessman, Brent McKinley, who spent generously to help elect Republican senators in the 2014 election and could benefit generously if the Senate approach is followed.

McKinley makes his living from renting office space to state agencies. His company, Vine Street Group, collects roughly $2 million a month from 17 leases in Thurston County alone, according to state data provided by Dunshee.

“I can’t show you the handshake. I can show you the fingerprints,” Dunshee said. “If they look at anything except for what Brent McKinley shows them they would understand.”

He said those “fingerprints” are the $30,000 in contributions McKinley and his wife made in 2014 to the Leadership Council, the campaign arm of the Senate Republican Caucus. McKinley also donated last year to the campaigns of individual GOP senators including Honeyford, as well as to Rob Toyer, Dunshee’s Republican opponent. He also gave to Democratic Congressman Rick Larsen last year and to Dunshee in 2012.

Brent McKinley declined repeated requests for interviews. Jeremiah McKinley, another Vine Street executive, said in an email it’s the company’s policy not to comment to the media. He referred questions to the lobbyist for the Government Building Owners and Lessors Association (GBOLA) to which McKinley’s company belongs.

Senate Majority Leader Mark Schoesler rejected Dunshee’s suspicions. He questioned whether Dunshee’s zeal to construct an expensive green building might be out of a desire to fulfill the agenda of Tom Steyer, the California billionaire who underwrites environmental causes and Democratic candidates in Washington.

Meanwhile, the debate continues on which is the better financial deal for taxpayers.

Dunshee says the state will spend about as much money building a new structure as it would in monthly rent for roughly 25 years.

Then the mortgage for the $82 million project will be paid off and the savings begin. He calculates that after 75 years — his estimated life of the building — it will add up to $800 million in avoided rent payments.

Honeyford and GBOLA consultants dispute the math. Rent won’t rise as much as Dunshee assumes and the lawmaker failed to factor in the cost of ongoing maintenance as buildings age. A quarter century is a long time.

Honeyford said the estimated cost per square foot has climbed since 2013 and he’s concerned it’s not done rising. Dunshee isn’t surrendering.

“It was in once,” he said. “It is the right thing to do.”

Will it be in the final budget deal or not be in, that is the question yet to be answered.

Political reporter Jerry Cornfield’s blog, The Petri Dish, is at www.heraldnet.com. Contact him at 360-352-8623; jcornfield@heraldnet.com and on Twitter at @dospueblos.