May 6, 2025 (Nebraska Examiner) –

The Nebraska State Auditor's Office is located in the State Capitol. (
“It is important to note that this ongoing acceleration in the cost of renting government office space has occurred despite the number of state employees remaining relatively unchanged,” State Auditor

Foley, saying that he doubted that the rising costs would abate any time soon, outlined his office’s concerns in a letter Monday to the Legislature’s Legislative Performance Audit Committee.
He said he was surprised to learn during the review that the state leases 1.5 million square feet in 193 commercially owned buildings in 37 Nebraska counties.
His team offered recommendations “to avoid throwing taxpayer dollars down the drain in excessive rental payments” — including a possible study on whether the state should consider the purchase or lease-purchase of additional buildings and whether another state office building should be constructed in
“There is a lot of space around town we could pick up at a very good price,” he said.
Omaha
building in focus
Foley pointed out specific situations, such as an abandoned multimillion dollar office building site in
Downtown Omaha
fixture could change hands
A state office building with a long history in the developing downtown
Will noted that the complex is in a “high-interest area for
The complex has 175,706 square feet of above-grade square footage and an attached five-story parking garage.
It is near the rising
Will stated in the letter that a sale would not happen unless the state found a larger facility to fit other state employees based in the area that could be bought from the proceeds of the existing building.
Attached to Foley’s six-page letter is a three-page response from
Lee addressed his missive to the same Performance Audit Review Committee, chaired by State Sen.
Of the 37% rent increase, Lee said several “significant operational changes” have shifted costs from other places to leased space. Those included the end of a child welfare contract in the
Among other shifts, he said, was the opening of the
Also, Will said, the
‘Critical asset’
To the auditor’s recommendation on possible construction of another state office building in the Capital City, Lee said that would be “cost prohibitive compared to currently available buildings.”
In its report, Foley’s team offered background on a state-owned property centered at
The auditor cited a news story of that era that said the state projected a
“Even with such significant anticipated savings, DAS did not proceed with the construction of the building, and the land at that location remains vacant and is still owned by the State of Nebraska,” the auditor’s letter said.
Lee, in his counter letter, acknowledged that the intent originally was to construct an office building and parking garage through a public-private partnership. But he said the 2019 estimate was
Meanwhile, he said, the property remains a “critical asset” to the state, as the site of the State Capitol building’s geothermal well field.
Foley, in an interview Monday, appeared to soften the stance on that project. He said the state made the right decision to pass on construction at the uncertain time of COVID-19. Now, he said, he believes it could be more financially smart to buy underused office property to save “precious taxpayer dollars” in the long run.
As budget gap looms
His comments come as the state struggles with closing a budget gap.
Nebraska auditor details ‘staggering’ impact of corporate tax incentives on state budget options
Just two weeks ago, Foley detailed the “staggering” impact of corporate tax incentives on state budget options. In a 20-page letter to state senators, he wrote that over the next four fiscal years,
He also highlighted the state’s “steadily increasing delinquent tax balances,” which could constitute “hundreds of millions of tax dollars owed but not collected” by the
Regarding his latest red flag to lawmakers, Foley acknowledged that the initial cost of buying office buildings to replace commercial leases would be pricey. But he believes that the “long-term savings to the state should prove well worth the investment.”
Foley said the Auditor’s Office is prohibited from conducting unauthorized performance audits of state agencies, so the letter to the Legislature’s Performance Audit Committee was intended as an alert.
He said a 2024 occupancy report provided by DAS showed an overall occupancy rate of 97% for seven state office buildings controlled by the department. Other state-owned buildings are occupied by state workers, but are controlled by individual agencies, such as the
According to Foley’s review:
- For the past two fiscal years, the state paid
$20.3 million and nearly$22 million , respectively, for commercially leased space. Compared to five years earlier, in 2018 and 2019, those costs now are about 37% higher. - Renting space at one of the largest, priciest commercial office buildings used by state workers at
1010 Lincoln Mall costs$33.43 per square foot, compared to$8.33 in a state-owned building at301 Centennial Mall .
Parking facilities
The review also looked at state parking facilities and noted that state employees who work at certain locations in commercially rented space in

Foley recommended that the legislative committee consider a study to determine if state parking charges are necessary in garages that are fully paid off, and whether rates charged for state employee parking are reasonable.
In response, Will said parking rates for state employees range from
Will said his department overall works to keep lease rates low, and noted that rent that is collected also helps pay for maintenance workers, building utilities and equipment repairs.
He said the department actively looks for potential ownership opportunities and that several locations currently are under consideration.
As an example, Will said, his department bought real estate for the
He said he looks forward to working with the auditor on increased government efficiencies.
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