State Lottery officials resolved Tuesday to press ahead with an expedited search for a new South Shore regional office and distribution center after terms of an agreement to keep some Lottery operations at its soon-to-be former Braintree headquarters changed.

The Lottery, which is in the midst of a planned relocation of its headquarters from Braintree to Dorchester, in October 2017 accepted proposals from Jumbo Capital Management LLC to lease some of the space at its current 60 Colombian St., Braintree, location to be used as its South Shore regional office, client services, distribution center, a data center, warehouse space and ancillary offices once the headquarters moves to Dorchester.

Last month, Jumbo sent the Lottery and the Division of Capital Asset Management a revised rent schedule “reflecting substantial additional costs related to the landlord’s improvements for the proposed premises,” according to a Lottery memo. Treasurer Deborah Goldberg said the updated rent schedule called for the Lottery to pay “significantly more money than what they had won their bid on.”

According to documents provided by the Lottery, Jumbo proposed raising the average rental rate for the Lottery from $18.10 and $21.85 per square foot (the Lottery’s request for proposals was split into two “projects” with different square footage) to an average rate of $28.80 for both projects. Lottery Executive Director Michael Sweeney said the changes would have increased the total cost to the Lottery by more than 50 percent.

In a rent schedule Jumbo partner Jay Hirsh attached to a letter to DCAMM, Jumbo said that the new rent schedule accounts for $5.82 million in improvements Jumbo would make to accommodate the Lottery. The company said it is still waiting to get final costs from the Lottery for data center equipment and that the Lottery will be responsible for any additional cost above Jumbo’s estimate.

The Massachusetts Lottery Commission on Tuesday voted unanimously to end negotiations with Jumbo related to using the Braintree space as its South Shore regional office and more, but to keep a line of communication open in case the Lottery wishes to negotiate an extension for its current lease there, which is due to expire in January.

The Lottery Commission voted unanimously in March to authorize a lease for a new Lottery headquarters in Dorchester. The Lottery is expected to occupy more than 32,000 square feet at 150 Mount Vernon St., near the University of Massachusetts Boston.

Rising Costs Put Lottery on Hunt for New South Shore Office

by State House News Service time to read: 2 min
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