Taxpayers Spend $25M for Philly Offices, Storage - NBC 10 Philadelphia
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Taxpayers Spend $25M for Philly Offices, Storage



    Philly Spends $25M Leasing Office Space

    Philadelphia taxpayers spend close to $25 million a year paying for leases on office and storage space. The NBC10 Investigators are asking why, after a critical report was issued, claiming some of the leases are "wasted space." (Published Thursday, March 19, 2015)

    The City of Philadelphia spends $24.8 million dollars to lease 1.3 million square feet of office space last year. That space included 200,000 additional square feet — after a city report concluded the city leased more space than it needed.

    The report was prepared in 2013 when the city leased 1.1 million square feet.

    "A lot of places, they just had too much space," said Philadelphia businessman Tom Knox, who said some offices with "million dollar views" were being used only for storage.

    Mayor Nutter appointed Knox to chair a review of city property in 2013.

    Knox said, at the time, his report found the city wasted hundreds of thousands of square feet of leased space. He said some was used as storage.

    City records obtained by the NBC 10 Investigators show the $24.8 million covers leases in 37 spaces. The most expensive properties include nine floors inside the Aramark tower for $5.5 million annually, seven floors at 13th and Chestnut for $4.5 million, and $2.1 million for a floor inside an office building at 6th and Walnut.

    "It is taxpayer money and we want to spend it appropriately,” said Deputy Mayor Everett Gillison who oversees the city's Public Property Department. Gillison defends the department's process for determining when leasing property is a necessary expense and explained why he thinks allegations of wasted space may be more of an issue of perception versus reality.

    "The taxpayer sees more money, more square feet after you just got a report saying you're wasting space and money," Gillison said. "But again, I would always say the conclusion is easy to state, but the specifics that are attached to that are what has to be understood."

    Gillison said some of the extra office space now houses the Philadelphia Police Department’s Special Victims Unit and a Department of Human Services office.

    Knox and his commission made seven recommendations including changing the way the city negotiates property leases and hiring more people for the department of public property.

    "I don't know if he implemented any of the recommendations in that report, at all," Knox said.

    Gillison said the city now uses a multiple step process to determine if a department needs more space, whether leasing is a good solution and then which space to secure if needed.