No Charge From Nabholz for Insurance Department Building Budget

Allen Kerr

Confidential to the contractor who asked Whispers how Nabholz Construction Services of Conway got the task of drawing up a budget for the 113,000-SF office building that Insurance Commissioner Allen Kerr hopes to build at 1610-1614 W. Third St. in Little Rock:

Arkansas Insurance Department spokesman Ryan James said the department asked Nabholz to run some numbers “for informational purposes.” No bids or proposals were sought and no payment made for the one-page estimate dated April 25.

No design work has been done for pay or as a courtesy, James said. (So those rumors about putting a dome on the new building may just be Capitol Hill talk.)

The AID was billed $2,800 for Ferstl Valuation Services’ appraisal of the building currently on the site, and its $1.03 million estimate of the cost of acquisition was included in the $39.9 million budget. (That’s almost twice the cost the AID originally anticipated.)

Of course, that budget is rough. For instance, it also includes $250,000 for “artwork and decorations,” which doesn’t seem standard for state office buildings.

But nothing about Kerr’s vision seems standard.

First off, as Department of Finance & Administration spokesman Jake Bleed confirmed, it is not typical for state agencies to deal directly with contractors or appraisers. That’s the sort of thing that is generally done by DF&A’s Division of Building Authority.

DBA is, for instance, in negotiations to buy the former Esso gas station at nearby 1600 W. Third with an eye toward redeveloping it as a Parks & Tourism Department welcome center.

Another thing that makes Kerr’s project unusual is that he hopes to transfer about $10 million from the AID’s trust fund to help pay for the new building. To do that, the commissioner has had legislation drafted that would add buying an office building to the list of approved purposes for the fund, which contains about $25 million.

On the other hand, Kerr is also counting on saving on rent. His department currently spends almost $1.2 million a year on rent, most of it to the Arkansas Teacher Retirement System for offices at 1200 W. Third. He envisions consolidating the State Bank Department and the Securities Department into the new building, saving another $540,000 a year in the rent they pay to private building owners.