New ITD headquarters further imperiled by Idaho lawmakers’ efforts to block sale

House lawmakers further imperiled a deal to allow commercial housing developers to purchase the Idaho Transportation Department’s headquarters on State Street in Boise after they passed a budget bill to renege on the deal Wednesday.

The roadblocks put up by lawmakers have now prompted developers to consider legal action against the state.

The Department of Administration announced the $52 million sale of ITD’s headquarters in September to three Idaho and Utah-based developers in what seemed like a done deal. ITD planned to move its headquarters to a location on Chinden Boulevard. But lawmakers have since grown skeptical of the executive branch’s decision to dispose of the high-value property and said the state should have gotten more money.

House Bill 723, a bill to set ITD’s budget, would direct the highway agency to instead renovate the current building, which was damaged two years ago in a flood, for $32.5 million. The bill notes that the funding is “contingent on custody and control” of the headquarters, at 3311 W. State St., remaining with the state. The winning bidders were Hawkins Cos., Pacific Cos. and FJ Management.

Brian Huffaker, CEO of Hawkins Companies, told the Idaho Statesman by email the building has been deemed uninhabitable by state experts, and that the state’s estimated costs are “wildly optimistic.”

Developers consider legal action

Though negotiations finished and developers signed a contract, the state has yet to do so, Huffaker said by phone. He said he worked with the Department of Administration on the sale and that the attorney general’s office drafted the contract.

Huffaker said his company is still planning to proceed with the sale and “moving full-steam ahead.” In a statement, he noted that the developers are considering legal action against the state.

Caleb Roope, CEO of the Pacific Cos., in the statement said the House efforts were “big government overreach” in what developers believed had been a finalized agreement.

“Upon being awarded this project months ago we believed we had a deal,” Roope said. “We don’t do business in Idaho this way and expect better from our government partners.”

Representatives for FJ Management could not immediately be reached.

Gov. Brad Little previously told reporters that undoing the sale posed “reputational risk” for the state.

”It is important to note that ITD’s relocation and headquarters sale has been approved and appropriated by the Legislature every step of the way since before Gov. Little took office,” Little’s spokesperson Madison Hardy told the Statesman by email.

Lawmakers worry about Idaho’s reputation

The bill to undo the sale passed by one vote in the House, and several lawmakers said they did not want to go back on the state’s deal.

House Minority Leader Ilana Rubel, D-Boise, said she didn’t know whether selling or keeping the property was the best decision but called changing a planned contract a “major policy step” that shouldn’t have been made in a budget committee, which does not hold public hearings.

“Nobody is going to want to do business with the state” if a transaction that followed laws and procedures is canceled arbitrarily, she said. “This feels really, really dangerous to me.”

Rep. Wendy Horman, R-Idaho Falls, who co-chairs Legislature’s budget committee, said undoing the deal is the right decision.

“It’s still perfectly functional where it is,” she said. “It was determined that investing in rehabilitation of the flooded building would represent tens of millions in savings to Idaho taxpayers rather than building a new building in another location.”

The state’s budget committee amended the ITD budget bill Tuesday to make the decision to revoke the sale as soon as the bill becomes law. The budget still needs approval in the Senate.

Senate Pro Tem Chuck Winder, R-Boise, told the Statesman by text that he opposes the House efforts and will work to let ITD relocate, free up the property and complete a process “that has been underway for more than a year and a half.”

He noted that Idaho received more than $57.5 million for the property with the $5.8 million insurance payout.

“I consider this to be a fair market deal and the Legislature should not interfere at the bottom of the ninth inning,” he said.