Bob Geddes looked out as the doors to an oversized freight elevator opened on the second floor of Building 2 on Hewlett-Packard’s Boise campus. He saw a big empty room with no walls chopping it into smaller spaces, and big windows offering views of the Boise Foothills to the north.
“It’s like a football field,” said Geddes, head of the Idaho Department of Administration.
The room was once filled with cubicles. They fell victim to downsizing that has gradually reduced the number of HP employees in Boise from a peak of about 7,000 to fewer than 4,000 by 2014. By Geddes’ estimate, the count is more than 2,000 now. HP Inc. won’t say how many employees are left.
Most people in the Treasure Valley have never been inside HP’s buildings. Soon, that will change. The state bought the campus at 11311 Chinden Blvd. — all eight buildings, with 1.5 million square feet of space, and nearly 200 acres, including 54 acres of parking lots — in December for $110 million. The citizens of Idaho now own it. Already, local residents have started jogging on paths around the campus.
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The state plans to move agencies into some of the buildings gradually over the next several years. HP Inc. will stay in five of them for now, and its sister business, Hewlett Packard Enterprise, will keep at least one. They are now tenants, as is Sykes Enterprises, which runs a call center in one building. Idaho doesn’t want HP to leave, so the company likely will get to stay for as many years — or decades — as it wants to lease space there.
Geddes led a tour in Building 2, the middle of the three buildings facing Chinden Boulevard. Dark industrial carpet covers the concrete floors, while columns of posts break up the space every few yards. Geddes sees great potential.
HP first says no, then yes
Geddes, who spent 10 years as president pro tem in the Idaho Senate, now leads a department whose duties include running state buildings and leasing commercial real estate for state offices.
Before his current job, Geddes spent a year on the Idaho Tax Commission. For 27 years, that agency has leased space at the Washington Group Plaza on the eastern edge of Downtown Boise. St. Luke’s Health System, another tenant, exercised an option last year to buy the plaza. The Tax Commission’s lease was coming up for renewal, so Geddes began looking for a new home for his old agency.
Initially, the state was interested in the mostly empty Building 2. (The buildings are numbered in the order in which HP built them.) Officials asked whether the company, headquartered in Palo Alto, California, was interested in selling the building. It was not.
The state issued a request for space to lease or buy. It received 46 proposals. One was from HP. In a change of mind that followed discussions with state leaders, HP offered to sell its entire campus. Geddes and Gov. Butch Otter met with legislative leaders, who embraced the idea.
As the state has grown, so has its government, a trend expected to continue. Buying the HP campus offered the chance to curb the millions of dollars per year spent on leases, consolidate agencies scattered among several locations, and build new buildings if needed on the campus’s open acreage.
The Legislature approved the purchase late in its 2017 session. On Dec. 21, the deal went into effect.
This photo was taken before a 2016 landscaping project that replaced 31 acres of turf grass with native grasses and other plants.
Provided by Idaho Airships
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Campus dates to 1970s
Hewlett-Packard began its Boise operation in 1973, employing a dozen people who worked out of a 26,000-square-foot building at 15 N. Phillippi St. that is now used by the American Red Cross.
The company picked Boise to produce a new printer used with what was described at the time as “mini computers.” The first building at the Chinden campus was completed in 1976 for $7 million. Two other buildings were added soon after, with others added in the early 1980s.
It’s hard to believe, Geddes said, that the buildings, with the look of a small college campus, were built that long ago. HP has an outstanding building-compliance record, and there are no contamination issues, he said.
“It’s a very well-built and maintained property,” Geddes said. “I think we’re getting a great value here.”
It will become the largest state-owned office complex. The Department of Transportation on State Street has 45 acres.
For years, only people who worked for HP had access. A guard shack prevented unauthorized outsiders from coming in.
The buildings are ringed by paved parking lots with room for 5,437 vehicles. Canada geese are plentiful.
The campus includes 30 acres of undeveloped land on the western edge at North Cloverdale Road and 20 acres on the west side next to North Five Mile Road. Hay is grown on both fields, under contract. A soccer filed and a small lake, part of a nature area, are on the south side.
Thirty-one acres, including the lawn fronting Chinden, were landscaped in 2016 to replace water-thirsty grass with native plants and grasses. Geddes said citizen complaints about the appearance might lead the state to scale back some of the native plants.
‘A savings for taxpayers’
The state sold bonds to pay for the purchase amount, plus $29 million authorized by Legislature for improvements. The bonds, at an interest rate of 3.7 percent, are scheduled to be paid off in just under 30 years, Geddes said. The state will lease space to HP, Sykes and its own agencies, and the lease revenue will cover the cost of the bonds, with no additional taxpayer contribution, he said.
“Ultimately, it will be a savings for taxpayers,” Geddes said.
The Tax Commission alone has paid out $40.8 million in rent for the years it has been located at the Washington Group Plaza. Geddes said the state could have better spent its money by having the agency in a state building.
The state projects collecting about $7 million in rent in what is left of this fiscal year, which ends June 30. Next year, that will rise to $12.8 million, said D. Keith Reynolds, chief financial officer for the Department of Administration.
State occupation will be gradual
The Tax Commission will be the first agency to move in, with its 438 employees moving in starting in the fall. Other agencies will be added as leases expire.
HP Inc. will continue using more than half of the campus’s space, 800,000 square feet. It uses Building 1, on the left side of the entrance, for its operations selling printers, ink and personal computers.
“This decision will ensure HP is able to maximize the value of its real estate investments and create future growth at the Boise campus,” spokeswoman Dana Lengkeek said.
Sykes, a Tampa, Florida, company that operates a call center at Building 8, on the west end of the HP campus, has three years left on its lease, with an option for renewal.
First Tech Federal Credit Union, which serves HP workers from an office in Building 2, will remain.
Hewlett Packard Enterprise, formed after a 2015 split from HP, sells data storage, software and servers, and it occupies part of Building 2. It has a lease that ends in July.
“That space will be used to accommodate the Industrial Commission and perhaps other smaller agencies or departments,” Geddes said.
Hewlett Packard Enterprise will continue to occupy Building 4.
The public will not be admitted to the leased buildings except as their tenants allow. State offices might have access controlled by badges, though Idahoans will have access to offices the public needs to transact state business. The grounds are open to the public.
Bob Geddes, director of the Idaho Department of Administration, says the state will get its money’s worth from the former Hewlett-Packard campus in northwest Boise.
Kelsey Grey email@example.com
No more private tenants
Geddes said the state is not looking to become a landlord for other businesses. He said the state will honor the leases for the existing businesses but won’t solicit others. Besides, there might not be enough room for all of the state agencies interested in moving to the campus.
“We’ve had inquiries from nearly every agency in state government asking when they can get in on the list,” Geddes said.
Owning the entire campus gives the state great flexibility, Geddes said. The property also comes with water rights to maintain the undeveloped land.
“I think it’s a very appealing and attractive campus,” he said. “We hope to be able to improve it.”
John Sowell: 208-377-6423, @JohnWSowell. Business Editor David Staats contributed.