DTMB outlines consolidation projects, lease reductions and ARPA-backed construction

Department of Technology, Management & Budget officials outlined a multi-year consolidation strategy for state-owned and leased office space and summarized recent outcomes at a hearing of the House Appropriations Subcommittee on General Government.

Michael Turnquist, described in the hearing as DTMB’s senior deputy director of state facilities administration, told members the department has reduced its lease portfolio by more than 60 leases since 2019, producing a cumulative cost avoidance exceeding $22 million. Tom Fenbach, introduced as director of the real estate division, said DTMB is targeting an additional 280,000 square feet of reduction over coming years timed to natural lease expirations.

DTMB identified a set of interconnected projects in Lansing and other locations intended to consolidate staff into state-owned buildings (examples cited include planned moves into the Elliot Larson and Romney buildings, and shifting the state budget office into the Ottawa building) and to remove obsolete facilities. Fenbach said the Romney consolidation alone will allow DTMB to exit about 23,500 square feet of lease space; a linked demolition of an outmoded building was estimated to avoid roughly $350,000 a year in operating costs. DTMB estimated the package of domino-style moves would take about two years to complete.

Agency officials also described capital projects funded in part with federal ARPA dollars, including construction of a new state lab in Diamondale, a psychiatric hospital in Northville Township, and veterans homes (Marquette and Grand Rapids cited). Fenbach said roughly $1.22 billion in ARPA funding has been dedicated to infrastructure in recent years and that much of the consolidation work involves design changes, furniture reconfiguration and investments that can enable lease exits.

Committee members sought detail on the pace of lease reductions (one lawmaker noted only a 5% reduction in lease square footage since 2021) and on geographic constraints that require some leases to remain (DTMB cited service-delivery requirements for agencies such as DHS and the Secretary of State). Officials said some leases are necessary to provide services statewide and that opportunities remain in markets with multiple leases per locality.

DTMB closed by offering to provide members with the CBRE options report and additional materials; because there was no quorum, the subcommittee did not take formal action during the meeting.