Building a better state government through smart real estate

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Nashville Skyline

Governors of many states are turning to the private sector and following proven strategies for delivering cost-effective real estate management that saves taxpayers money.

In Tennessee, Governor Bill Haslam took office in 2011 and challenged his new commissioners to determine more effective ways to run state government and to provide the very best services at the lowest possible costs. Within Tennessee’s Department of General Services (DGS), real estate and facilities management offered a prime opportunity to apply sound business practices to the management and operation of about $2 billion worth of real estate, which included almost 10 million square feet of office space.

Included in the strategy was a plan to outsource a range of services to private sector real estate industry professionals.  After conducting a competitive process, Tennessee hired JLL to lead services that included facility condition assessments, master planning, and facility management. Another big part of the plan was to consolidate state employees into modernized and efficient workspaces, which would eliminate the need for approximately 1 million square feet of space and save the taxpayers over $100 million during the next ten years.

“I can proudly report that our department is striving to meet the governor’s challenge through innovative initiatives that are considered a model for how states can improve efficiency, enhance productivity and save taxpayers’ dollars,” says Commissioner Bob Oglesby.

JLL’s facility management team has made significant improvements to facility operations while reducing operating expenses.  The team installed a new computerized work order management system that makes it very easy for state employees to submit service requests, they implemented a comprehensive preventive maintenance system, and they developed and implemented a new energy management plan.  JLL also implemented a new employee training program and an engineering compliance program that will insure state facility operations are in compliance with all laws, codes, and regulations.

“Tennessee is leading the way for other states by proving that successful practices from the private sector can also produce great results for state governments.” – JLL Alliance Director John Padgham

By improving the operation of state-owned facilities, JLL is driving down operating expenses in a number of different ways:

  • The lighting control system at the downtown Nashville Tennessee Tower was reprogrammed to turn off the lights during non-business hours, which will save the state over $300,000 a year.
  • Addressing deferred maintenance on heating and cooling systems and installing an effective preventive maintenance program is saving hundreds of thousands of dollars in annual energy costs.
  • Consolidating janitorial suppliers and renegotiating security contracts will save over $1 million per year in operating expenses.
  • JLL’s ability to self-perform most of the repairs to building mechanical systems has substantially reduced the state’s annual expenditures on outside contractors.   First year savings should exceed $1 million.

“Tennessee is leading the way for other states by proving that successful practices from the private sector can also produce great results for state governments” said JLL’s Alliance Director, John Padgham. “Tennessee’s success is attracting attention from other states.  Many states have already expressed interest in outsourcing facilities management by contacting DGS to learn more about their experience with JLL.”

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