Senior Fiscal Analyst
2021 Legislative Session Action
Section 61 of enacted 2021 SB 159 (the Omnibus appropriations bill) directs the Kansas Department of Health and Environment (KDHE) to issue a request for proposals (RFP) in FY 2022 to construct or renovate a building and equip a KDHE laboratory located within an eight-mile radius of the Capitol Complex in Topeka. The bill directs the Joint Committee on State Building Construction (Committee) to review these proposals and make recommendations to the State Finance Council concerning the laboratory.
Section 61 of 2021 SB 159 also authorizes the issuance of bonds for capital improvement projects, not to exceed $65.0 million, for the KDHE laboratory. Before proceeding with the project, the bill requires approval from the State Finance Council for both the KDHE laboratory and Docking State Office Building projects in a single resolution. Finally, the bill requires the Director of the Budget, in consultation with the Secretary of Administration and the Secretary of Health and Environment, to determine whether COVID-19 federal relief funds provided for discretionary purposes are available to be used to finance the construction of the laboratory.
At its meeting on September 7, 2021, representatives of KDHE presented the Committee with eight site proposals for a KDHE laboratory. Three of the proposed sites were state-owned properties, and five sites were submitted by private entities during the RFP process.
State-owned Site Proposals
Three of the proposals were originally submitted to the Committee in January 2020 and proposed construction projects on three-state owned properties in Topeka with a total project cost of $64.3 million estimated in March 2021. These sites were:
- Lot 4 in Downtown Topeka, near the Docking Building;
- A site on the grounds of the Kansas Neurological Institute (KNI); or
- A site adjacent to the current KDHE laboratory at Forbes Field.
RFP Process Site Proposals
Pursuant to 2021 SB 159, the Department of Administration, in collaboration with KDHE, issued an RFP open from August 2, 2021, to August 31, 2021, seeking building sites within an eight-mile radius of the Capitol Complex capable of supporting a 100,000 gross-square-foot laboratory facility with suitable utilities services, vehicular access, and on-site parking. Land purchase and lease proposals were allowable, as well as options to renovate an existing building.
The Director of the KDHE laboratories presented the proposals and agency evaluations determining viability for each. The proposals submitted included the following commercial properties:
- The former Payless Shoesource corporate headquarters at 3231 SE 6th Avenue, which did not include lease payment amounts due to the proposer’s pending acquisition of the property via commercial sale and would likely necessitate the sharing of space with other tenants;
- Mostly vacant lots near downtown Topeka at 11th Street and Quincy Street, which would entail annual lease payments of $65,000 for the site and $20,000 for parking;
- Vacant lots in east Topeka between 21st Street and Cyprus Drive west of Cedarwood Drive, which would entail an annual lease payment of $25,000;
- Partially vacant lots at the Kanza Business and Technology Park at Kanza Drive and MacVicar Avenue, which would entail a land purchase of $1.0 million; and
- An existing building in downtown Topeka at 220 Southeast 6th Street, which did not meet the minimum space requirements of the RFP and would entail an annual lease payment of $1.9 million.
The Director of the KDHE laboratories stated that commercial lease agreements would necessitate contract negotiations, and land purchases would require legislative action. Further, use of these commercial properties would require engineering and soil composition assessments, which could delay the start of construction. Due to this, KDHE recommended consideration of the three state-owned properties.
On October 11, the Committee received testimony from the Department of Administration estimating that up to 50.0 percent of the total project cost could be eligible for moneys from the State Fiscal Recovery Fund provided through federal American Rescue Plan Act of 2021.
On October 11, the Committee recommended construction of a KDHE laboratory at the KNI site.
On December 17, the State Finance Council approved a plan to construct a KDHE laboratory at Lot 4 in Downtown Topeka, near the Docking Building.