Last-minute shift in DHHS lease favors high bidder on project

Posted August 6, 2013

— Days before a Tuesday vote by the Council of State to approve the lease of a vacant Durham building for the Department of Health and Human Services, officials changed the specifications of the lease.

Neal Coker, the Triangle developer who had won the lease, said the last-minute change, which came long after the bidding process was closed, now favors the high bidder.

"They're just not playing by the rules," Coker said.

Coker planned to spend about $3 million to renovate a former IBM building on Silicon Drive for NC FAST offices. The operation would handle customer service and tech support for a new state computer system that handles social services benefits.

On Friday, DHHS revised its specifications for the NC FAST space, and the contract now appears to give a clear edge to a larger office building on Lucent Lane, near Cary's Regency Park.

"A fair reading of the new specs would suggest that it fits that building to a T and nobody else's building," Coker said.

The building is owned by New York-based Lexington Realty Trust, which had been the highest of the five bidders for the project. Its bid was $5.6 million over four years, compared with $4.3 million under Coker's bid.

Developer Neal Coker Developer, lawmaker question late change to DHHS lease

"Is there someone the department is trying to lean the process toward? It raises a lot of concerns," said Rep. Nelson Dollar, R-Wake.

Even accounting for the larger space, the Lexington Realty building, which now houses Duke Energy workers, would cost the state $19.40 per square foot to rent, compared with $14.40 for Coker's building.

"We can't afford every bell and whistle," Dollar said.

DHHS spokesman Ricky Diaz said the change was made because NC FAST will be hiring about 60 more people than expected. The project wasn't put out to bid again so the operation could get into an office building as soon as possible and stay on schedule, he said.

Dollar, one of the General Assembly's top budget writers, said he wasn't aware of DHHS' plans to hire more people for NC FAST.

Diaz said the additional people would be "absorbed by the existing project budget," so no extra state money would be needed. He didn't elaborate on what was being cut to free up money for more personnel.

Coker said he believes the process was changed to benefit the Cary property, but he doesn't suspect politics.

"I'm about as Republican as they come," he said.

Lexington Realty Trust couldn't be reached Tuesday for comment.

The deadline for bidders to resubmit proposals to meet the new specifications is Aug. 14. Coker said he's keeping his legal options open as the process moves along.

"I usually have the ability to determine whether I'm being told the truth or not," he said. "Fifth-grade teachers are getting better excuses on why homework isn't getting turned in."


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  • byrdcrap Aug 9, 2013

    Highest Bidder????--I thought the state was broke--I guess some political friends need some cash.

  • free2bme Aug 9, 2013

    More corruption and deceptive moves by NC Legislature. Their behavior is disgraceful and disturbing to many citizens of NC. The protests and petitions must continue until we can do more and vote them out.

  • baldchip Aug 8, 2013

    Just what our cash strapped state needs-the highest bidder getting the business.

    Who is running P&C???

  • gingerlynn Aug 8, 2013

    There is no way those folks in Cary by Regency Park, The Booth Amphitheater, and the million dollar houses are going to allow a food stamp office in their neighborhood!

  • Rebelyell55 Aug 8, 2013

    Yep, I would say that about right, ya know this ain't the smartest folks running the show up there (for what they cost ya would think they were). So what are the tax payers getting for their money? Very little and looks to be even less later.

  • daderay Aug 7, 2013

    If such changes are not illegal, they definitely should be.

  • archmaker Aug 7, 2013

    I'm about as Republican as the come, he said.

    Well get in line with Ann Goodnight. Donating $111,000+ to republicans didn't get her the results she wanted either.

  • Liveandlearn Aug 7, 2013

    I do not think that this is about party affiliation. It is just about who can scratch whose back.

  • yankee1 Aug 7, 2013

    I think its time the Feds get involved and start investigating North Carolina politics....puzzled

    Now there's a great idea. The corrupt Obama Administration investigating corruption. Wow! Genius!

  • puzzled Aug 7, 2013

    I think its time the Feds get involved and start investigating North Carolina politics. This stinks to high heaven.

    Wow! Do you really think the feds smell better?