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June 25, 2010

Governor Quinn Announces More Than $20 Million in Savings from Lease Consolidation Program
Effort Rids State of Unneeded Space, Saves Taxpayers Millions

SPRINGFIELD – Governor Quinn announced today that Illinois taxpayers will save more than $20 million annually following the completion of a statewide office consolidation and holdover lease elimination program carried out by the Department of Central Management Services (CMS). 

CMS eliminated almost 750,000 in square feet of unnecessary leased space around the state and reduced the number of holdover leases from 159 to zero as of this month.  Holdover leases are leases which have expired but where the tenant (a state agency office) can remain in the property on a month-to-month basis.  The landlord can evict the state agency with only a 30-day notice.

As a result of the overall efficiency effort, CMS’s Bureau of Property Management consolidated 65 leases.  It reduced the amount of total leased space and saved $12.7 million in annual rental fees.  CMS has entered into 132 new annual leases for $58.7 million, replacing holdover leases that had cost $66.5 million annually.  These new leases saved the state 11.7 percent – or $7.8 million per year.  Through consolidation, rebidding and renegotiating 197 leases since early 2009, CMS has saved $20.5 million in total annual rental expenses.

“Governor Quinn delivered a clear directive to this agency to perform a top-to-bottom review of the state’s space needs, eliminate holdover leases and ensure that any space we pay for is being used in an efficient and cost-effective manner,” said CMS Director James P. Sledge. “There is always more work to be done, but CMS is pleased with the progress we have made specifically in property management.”

Following are examples of some of the most significant cost reductions achieved by the efficiency effort:

• IDOT Springfield, Division of Traffic Safety; moved to state-owned space: Total cost reduction $1.7 million
• DHS Chicago (59th and Ashland); moved to other existing leased space: Total cost reduction $1.3 million
• DCEO Springfield: the old lease of $2.3 million per year was reduced by 51 percent to $1.1 million: Total savings $1.2 million
• DCFS Springfield: the prior lease was $1.0 million; the office was split into two for a total lease cost of $432,140, reduced by 57 percent for a total reduction of $575,874.


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