Nov. 29—CONCORD — The state has approved a 20-year, $70 million lease with a politically prominent developer to provide a new home for the Department of Justice and perhaps for other state departments.

The Legislature had already approved a plan to demolish the existing Department of Justice building at 33 Capitol St. and build a new legislative parking garage on the property. The building is across the street from the State House.

The Executive Council unanimously approved the no-bid lease at its meeting last week.

The DOJ, often referred to as the Attorney General's Office, will move into 65,000 square feet of space in what's known as the South Building at 1 Granite Place in Concord, about a mile and a half north of the State House. This is part of a complex originally built to serve as state headquarters for Lincoln Financial Group, an insurance company.

The lease covers the entire 106,000-square-foot building, and state officials said other state agencies could be moved there as well.

The lease is with the real estate management firm led by Steve Duprey, a former Republican state chairman who owns a lot of commercial property in the Concord area.

The deal is a "triple net" lease that makes the state responsible for paying monthly rent, the cost to upgrade the space, and other expenses of the landlord including parking, maintenance and taxes as well as all finance costs over the life of the lease.

Administrative Services Commissioner Charles Arlinghaus said the AG's Office should remain in the capital city.

"There just aren't many options out there," Arlinghaus said.

The new legislative parking garage would replace a Storrs Street garage that's two blocks from the State House.

The circa-1976 parking structure is so badly corroded that steel nets were installed to catch falling concrete before it crashed onto cars or pedestrians below.

Why not buy?

This lease agreement with Duprey's limited liability company gives the state an option to buy the South Building at 1 Granite Place outright for $15 million between Aug. 1, 2023 and July 1, 2024.

"I don't like long-term leases," said Executive Councilor Joe Kenney, R-Wakefield, who said the council should consider writing a letter to legislative leaders urging them to buy the building.

Arlinghaus agreed the buy option was a good one.

"The $15 million purchase price is a really good deal for 100,000 square feet of space," Arlinghaus said.

In March 2021, the Brady Sullivan development group in Manchester bought the South Building at 1 Granite Place and 107 vacant acres near to it for $3.4 million.

Last June, Duprey bought both parcels for $7.4 million, according to real estate records.

Duprey already has an option to buy the North Building that makes up the rest of the original Lincoln Financial complex. The state Administrative Office of the Courts leases space in that building.

Last spring, Arlinghaus told legislative leaders that paying $20 million for a new home for the DOJ would be a good deal.

The state bought 33 Capitol St. from Laconia Savings Bank years ago after seven of the state's largest banks collapsed and were sold as a group. The AG's Office moved in to occupy nearly all of the building. Before long, the agency ran out of space and stored massive paper files in the basement.

Garage plan

As for the parking garage concept, the House of Representatives embraced legislation to build it with $35 million in state budget surplus.

Senate President Chuck Morse, R-Salem, said a final decision should come when the Legislature adopts a two-year budget of public works projects in the spring of 2023.

Among past estimates were $3.5 million to raze the DOJ building, $1.3 million to move staff to another location, $1.5 million to tear down the Storrs Garage and $24 million to build a new above-ground parking garage for legislators.

Ultimately, the Legislature decided to spend upfront $9.3 million for engineering of the new garage, demolishing the AG's office and moving that agency into new quarters.

The money got into a catch-all bill (HB 1661) passed at the close of the 2022 session that critics called a "Christmas tree" because it was laden with many pet state projects.

Morse and other legislators said it would make sense to delay any purchase until what had been a white-hot real estate market had cooled off.

They also questioned whether it would make more sense for the state to issue bonds to carry out the purchase rather than pay cash for all of it.

Some conservative lawmakers called the project a boondoggle and last spring unsuccessfully tried to derail it.

According to published reports, the developers pay more than $200,000 in property taxes to the city on the South Building.

In the past, the building has been assessed as high as $9.4 million.

Arlinghaus told the council if the state ended up with a purchase, it would have to include a payment in lieu of taxes to Concord.

klandrigan@unionleader.com