State Building for L.A. a Step Closer : 1986 Target Date Set for Beginning of Construction; Crucial Hurdles Faced

After languishing for years, plans for a new $175-million Los Angeles state building were given a big boost Wednesday when state and city officials targeted October, 1986, to start work on the massive structure to be built on downtown’s once-thriving Spring Street.

The action came as a special joint powers body--the Los Angeles State Building Authority--agreed the project should go forward and paved the way for completion of architectural drawings for the building, in the block bounded by Spring, 3rd, 4th and Main streets near Skid Row.

Occupying nearly the full block, the structure would be California’s largest state building, providing offices for nearly 3,000 state employees now working in leased quarters around the city. Thirty-one different state offices would be housed in the new facility.

Elated authority members representing the state described the action as tantamount to formally approving the structure. It was first envisioned in 1976 to replace the downtown Civic Center’s old earthquake-damaged--and since demolished--State Building at 1st and Spring streets.

‘Auspicious Occasion’

“This is an important and auspicious occasion,” said Milan D. Smith Jr., an attorney and the authority’s president. “A state office building will be constructed. . . . We’re of the unanimous view that the building is in the best interests of the state and the people and that it will help revitalize this part of downtown.”

Smith and Jerry Epstein, a real estate developer, were appointed to the three-member authority by Gov. George Deukmejian to assess the State Building project and supervise its construction if the building is determined to be in the state’s interest.

Although there had been reports after Deukmejian took office that his Administration might scuttle the Los Angeles building plans, Smith said the governor was “behind the project.”

The authority’s third member is James M. Wood, chairman of the Los Angeles Community Redevelopment Agency, which has played a leading role in downtown’s renewal. The agency is behind an ongoing effort to restore Spring Street, once the city’s financial core, and has been a pivotal planning and financial force in efforts to locate the new State Building there.

Wood, whose agency will loan funds to the state to complete architectural drawings, adopted a more cautious view of Wednesday’s action. He described it as a “significant step” in a long struggle.

Despite the authority members’ optimism, a number of hurdles remain, any of which could upset or delay the project further or even sidetrack it. These include completion of an environmental impact report, inordinately high construction bids, bond sale problems and the signing of a long-term lease between the state and the authority.

Under the financing plan, tax-free bonds, backed by the state’s lease, will be sold to pay for construction costs, land purchases, architects’ and engineering fees and other expenses. Community Redevelopment Agency planners estimated construction costs alone for the twin-tower, 14- and 17-story project at $124 million. A three-story atrium would connect the towers.

Plan for Parking Garage

The agency has either acquired or controls the nearly full square-block building site. A 900-space parking garage is planned as part of the overall State Building development, but Smith said a decision will be made at the authority’s June meeting whether it will be developed privately as a subsidized project or be built by the state.

The authority’s action Wednesday was based primarily on a report by Karsten Consultants that showed that the state’s “occupancy” costs would amount to $1.6 billion over a 50-year period, commencing in 1989. Continuing present leasing programs for state offices would cost $6 billion, the report said.

Specifically, the authority’s vote Wednesday ordered an agreement to be drawn between that body and the Community Redevelopment Agency for a $3.5-million loan to the state to finish the architectural drawings. The work is being done by Welton Becket Associates, which also prepared the preliminary drawings for fees--about $1.46 million--approved by the Legislature.

When state officials turned down sites closer to the Civic Center and selected the Spring Street location for the new building four years ago--a location the Community Redevelopment Agency campaigned for--the planned structure’s cost was estimated at $70 million to $75 million. The redevelopment agency’s investment in the site now is estimated at about $14 million with the remainder of the building’s costs, including architectural fees and other items, at $37 million.

Initially the idea was to complete the state complex late next year. Although the redevelopment agency went ahead assembling land, the project remained on a back burner for a number of reasons, including a lawsuit filed in early 1983 by a group of lawyers from the state attorney general’s office who objected to the Spring Street site because of traffic, noise and high crime. The suit subsequently was thrown out of court.

The project also has been beset by changes in concept and design, the change in the state Administration, delays in appointing members to the joint-powers authority and some members’ desires for an updated economic analysis.