Westmoreland County Commissioner Kim Ward says the county is paying too much to lease office space in a building across the street from the county courthouse in Greensburg.
Lease deals for three floors of office space could cost the county more than $14 million during the next two decades in the Pennsylvania Avenue building that cost just $8 million to build, according to Ward.
"We're paying more than it cost to build the building. Why didn't we pay for the building ourselves if we needed the space?" Ward said Tuesday.
County officials are working to finalize an additional lease to rent more office space in an addition atop the county's former public safety building.
The four-story, $8 million expansion was paid for by the Westmoreland County Economic Growth Connection, which has since merged its operations with the county's planning and economic development agencies.
The county already leases more than 33,000 square feet of office space to house the Children's Bureau. An additional 6,300 square feet is leased for the county planning department.
Those leases cost county taxpayers more than $573,000 a year. The county owns 20-year leases with the Growth Connection, meaning it is committed to pay more than $11.4 million in rent.
Now officials are finalizing a 20-year plan to rent 9,100 square feet to move the Recorder of Deeds and several tax-related offices to the other building.
A tentative proposal calls for the county to pay about $151,000 a year for the new space, which would add $3 million to the total rent owed over two decades.
"It doesn't make a lot of sense to me," said Ward, the sole Republican on the board.
The proposed lease calls for the county to rent the space from a group of lawyers who pay about $162,000 a year to the Growth Connection to lease an entire floor in the building.
That firm, Westco Development, would rent two-thirds of the floor to the county. Partners in the firm have been campaign contributors to Democratic commissioners Tom Balya and Tom Ceraso, and the firm was paid more than $536,000 last year to do legal work for the county.
In March, Balya and Ceraso voted to rent office space in the building to move record books from the Recorder of Deeds office. That deal was to take effect April 1 and cost the county $45,000 annually.
The county has yet to move anything to that space and has not paid any rent, according to Solicitor R. Mark Gesalman. He said any new lease deal for additional space would supersede the previous arrangement.
While the new lease proposal is still being negotiated, officials yesterday said the existing arrangements to rent space for the children's bureau and planning office were good deals.
"It's a fair deal for taxpayers," said Ted Kopas, Balya's chief of staff. "Rent is reasonable and we have an ability to purchase the buildings after 20 years."
After two decades, the county has an option to purchase at least three floors in the building for $1.
Kopas said the cost for the county to build a four-floor addition would have been much more than $8 million because interest payments would have increased the capital outlay.
"Money isn't free," Kopas said.
And he said the county receives state reimbursements for a portion of what is paid for the children's bureau operations.
The children's bureau carries a $19.5 million budget, which includes rent paid to house its offices. Kopas said the state repays the county up to 90 percent of the agency's total costs.
John Skiavo, president of the Growth Connection, said his agency is not expected to turn a profit from the county's rent payments.
"The county's paying the financing costs we're paying. It's a lease-purchase arrangement," Skiavo said.
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