PHOENIX-State employees will have a little more breathing room along the Capital Mall District. Construction is set to begin on March on a $65-million, 485,000-sf office project on 11 acres at Washington Street and 15th Avenue, facing Wesley Bolin Plaza and the state capitol and across from the state Supreme Court. The Capital Mall District runs west of Downtown.

“The Capital Mall project represents a unique partnership opportunity between the public and private sectors,” says Department of Administration director J. Elliott Hibbs.

The two-building project is being designed, built and managed by Opus West, the Phoenix-based developer. Opus won the contract through a competitive proposal process.

The first building will total 185,000 sf in four stories, with an 800-space, above- and below-ground parking structure. It will feature a two-story energy-efficient lobby and balconies overlooking the plaza. The building will house approximately 560 employees of the Arizona Department of Administration, which will relocate from other offices in the capitol complex.

The second building will total 300,000 sf in six stories and will have a 1,000-space, above-ground parking structure. The building will house the Department of Environmental Quality, which will move in approximately 900 employees. They are now housed in two buildings in the Central Business District along Central Avenue.

“We’ve entered into a very beneficial partnership that will both alleviate a great need for government office space and provide employees an office environment designed with precise needs in mind,” says David Krumwiede, VP of Opus West.

State-owned space on Capital Mall is at 99.3%occupancy. The state wants to create more space for its employees, while decreasing the cost of leased office space. The state currently pays office rents of more than $11 million annually and hopes to cut that figure with the creation of the new buildings. The state expects to build as many as 11 new offices, with a capital investment of $250 million, during the next decade.

The two-building project is expected to be ready for occupancy by July 2002.

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