The newly formed Arkansas Department of Commerce will soon move all but one of its divisions into a former Verizon office building in Little Rock's Riverdale neighborhood.
The move to 1 Verizon Drive, state officials said, should save money and improve efficiency.
At least three of the divisions being relocated -- Arkansas Rehabilitation Services, State Bank Department and Securities Department -- lease privately owned office space while others are situated in state-owned space.
The Arkansas Development Finance Authority bought the six-story, 303,000- square-foot Verizon Building 4 in February for about $26 million, noting in March that it would be used to house state government office space. The purchase also included about 1,300 parking spaces.
"Overall, the relocation will cost the department less money," said Alex Johnston, communications director for the Department of Transformation and Shared Services, which is overseeing the reorganization of state government approved this spring.
"We will not know the exact savings until we get the space designed; however, we know our new office model will generate a significant reduction of square footage that calculates to rent reduction," Johnston said. "Most agencies are currently paying for parking in their current locations, and these costs will disappear with the move."
Alisha Curtis, chief communications and legislative director for the Commerce Department, said that the building had been part of economic development discussions with private companies, but she declined to provide further details on the talks, citing the confidentiality of such negotiations.
Curtis said that the department's move is being planned and that the divisions will begin relocating in October. Officials hope the move will be completed early next year.
The Arkansas Times first reported the move over the weekend.
The Commerce Department is one of 15 Cabinet-level departments created by the General Assembly earlier this year as part of Gov. Asa Hutchinson's plan to reorganize state government.
The plan included reducing the number of agencies that report to the governor from 42 to 15 on July 1. Hutchinson has said he expects reorganization efforts to save about $15 million annually beginning in fiscal 2021.
"When I announced my plan to transform state government, I outlined three specific goals: more managerial control; better delivery of services; and cost savings to the state and the taxpayer," Hutchinson said in a statement.
"This acquisition addresses all three. It will provide the Secretary with more resources and oversight. It will allow divisions within the Department of Commerce to work more closely with one another to identify efficiencies. And, yes, over time, it will save money by eliminating unnecessary costs to the state."
The Commerce Department is headed by Mike Preston, who since 2015 has been the executive director of the Arkansas Economic Development Commission.
That commission remains housed within the Commerce Department, which also includes the Division of Aeronautics, Waterways Commission, Wine Producers Council, Development Finance Authority, Division of Workforce Services, Office of Skills Development, State Bank Department, State Insurance Department and State Securities Department.
Curtis said departments that fall under the Commerce Department will be located in the building except for the Aeronautics division, which is located at the Arkansas State Police hangar at Central Flying Service in Little Rock.
"Having the Department of Commerce under one roof will result in substantial efficiencies across the board," Curtis said.
Metro on 08/20/2019