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

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.

"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."