Dionne Rose, Business Reporter

Prime Minister Bruce Golding wants government offices to retake office space downtown.

Government spends more than a $1b each year on property rentals, including machinery and equipment, but Prime Minister Bruce Golding is now looking to erase much of those expenses by forcing the migration of public services back downtown.

To do that, he has to halt the flow of public offices and departments uptown, a trend that has left tens of thousands of square feet of state-owned office space empty in the capital's core.

EX-IM Bank move

The latest move was by the National Export-Import Bank, which gave up space on Duke Street last year for purchased offices on Oxford Road in New Kingston.

Golding, who has started his programme by placing a moratorium on new relocations, last month announced that the foreign affairs ministry would be taking up office space on the Kingston waterfront.

The ministry is now located in the congested New Kingston business district in space that it rents for millions of dollars annually.

The ministry pays for rental of $15.7 million for its 37,485 square-foot office.

Other figures from the Ministry of Finance show that the Government's total bill for rentals this year will top $1.26 billion - 95 per cent of which pays for office space - up from $1.06 billion last fiscal year.

At the same time, the Urban Development Corporation (UDC) tells the Financial Gleaner that it has some 87,585 square feet of lettable office space in downtown Kingston.

The vacancies span:

Kingston Mall, which has 31,102 square feet of space with 21 per cent of that vacant.

The Office Centre Building, which has 1,530 square feet of space with 77 per cent vacant.

The Oceana Complex, which has 40 per cent of its 54,953 square-foot space empty.

The vacancies represent an opportunity cost of more than $21 million in rental income for UDC, based on the state agency's quoted rental and maintenance rates.

Foreign Affairs is acquiring the old Myrtle Bank hotel property from UDC to build its new offices.

Golding said the plan was to also encourage foreign missions to acquire space downtown.

"We have already spoken to a number of missions here and those who are renting buildings have indicated that if we can make the land available to them they would be prepared to put up their embassies in downtown, Kingston," the prime minister said while addressing the inaugural tourism outlook seminar in New Kingston last month.

Wilton Dyer, head of the public relations and media affairs unit in the foreign affairs ministry, said the deal with UDC had not yet been finalised, including the price of acquisition, nor were the relocation plans likely to be wrapped up before the end of 2009.

But the ministry has already identified funds under a 30-million-yuan grant acquired from the Chinese government in 2005, which Dyer said, "will go primarily toward construction cost of the building."

He said that there were also other local costs that the Government would have to finance.

Another government office, Jamaica Business Development Corporation (JBDC), is also looking to expand downtown.

Karl Samuda, minister of industry, investment and commerce, said the incubator for small businesses had outgrown its current location and would be taking up space on Marcus Garvey Drive.

The Financial Gleaner understands that JBDC is currently in negotiations to acquire old factory space in the manufacturing zone, which it intends to use as a resource centre.

dionne.rose@gleanerjm.com