City Hall Seeks a Bigger Place to Call Home : $258-Million Complex Asked to End Crowding

After 13 years of discussion about the municipal office space shortage, City Manager John Lockwood will ask the City Council today to approve construction of a new City Hall complex that could cost more than $258 million.

With some municipal agencies crowded out of city-owned office space on C Street and pushed into leased offices that currently cost $2.7 million a year, Lockwood is recommending that the council commit to construction of a new city admininstration center and allocate $250,000 to study three suggested sites.

“I think it is clear that the best alternative the city has is to construct new office space and to get out of the burden of leasing needed space on a long-term basis,” said Deputy City Manager Maureen Stapleton, who led a task force which wrote the report on office space being presented to the council today. “In the long run, this is the most fiscally prudent way to go.”

In addition to solving the city’s space needs through 2010, the new complex would serve as a centerpiece for one of three center-city areas targeted as locations for the new office building.

While its primary task is to solve the inefficiency of overcrowded working conditions for city employees, the new building should generate economic benefits, spark community pride and “produce an inspired and significant architectural response that will serve as a positive example to those who will build downtown,” the task force report says.

The three sites suggested by the task force are the Community Concourse area on C Street, where City Hall is now located; a site between Broadway and C Street just south of City College; and a land parcel bounded by K Street, Imperial Avenue, 9th Avenue and 12th Avenue that is now owned by San Diego Gas and Electric Co. The city’s Centre City Planning Committee, headed by Horton Plaza developer Ernest Hahn, has proposed the last site for a large government complex that would include city offices.

The task force makes no mention of a recent proposal by development firm Oliver McMillan Inc. to build two high-rise office towers on two blocks east of the current City Hall because the city manager’s office has seen no plans for that project, Stapleton said. But one of three development alternatives suggested for the Community Concourse site would incorporate those blocks.

Under the timetable suggested by the task force, the city would select a site for the building by April and take occupancy in December, 1991, or July, 1992, depending on whether it holds a design competition.

The new complex is intended as a long-term solution to the office space shortage and the corresponding problem of rapidly escalating costs to lease needed space in nearby buildings, the task force report says.

City workers outgrew their Community Concourse facilities in 1974, just 10 years after the first of the two buildings was completed. Though the city owns 316,000 square feet of office space, it leases another 190,000 square feet at a cost of $2.7 million a year. The city manager’s office is asking the council to approve another lease of 85,000 square feet today that would raise the yearly leasing costs to $4.1 million.

By 2010, when the city will need 890,000 square feet of space, it will lease 568,000 at an annual cost of $29.9 million if other facilities are not built or bought, the report says. More importantly, lease costs between 1988 and 2010 will total $319 million, substantially more than the $258 million top base price of building a new complex.

Stapleton compared the choice facing the council to a family’s decision on the “the purchase of a house versus renting a house indefinitely. In the long run, it is more fiscally prudent to own than to continue to lease.” She noted, however, that the cost estimates offered the council may increase when public improvements or the cleanup of soil contamination at the SDG&E; site are added to the total.

Coordination Problems

The public and city staff suffer from the inefficiencies of having city staff scattered about the City Administration Building, the City Operations Building and three other high-rise office towers in a six-block area downtown. City attorney’s office employees are located in three separate buildings. Planning Department workers are in four.

The arrangement leads to coordination and communication problems for employees and inconvenient treks about downtown for people attempting to conduct business with the city, Stapleton said.

Consideration of the problem began soon after the first lease was made in 1974. This spring, Lockwood appointed the task force to review the issue and propose alternatives. A consultant was hired to suggest sites. With only the First Interstate Building large enough to accommodate the city’s office space needs, the task force considers construction the only feasible option.

Three options are listed for the Community Concourse:

- Complete redevelopment, which involves both demolition of at least one city building and construction of a 22-story office tower and another of unspecified size.

- Partial redevelopment, which calls for construction of 15-story and 8-story towers and rehabilitation of existing office buildings.

- Construction of two new towers on the blocks east of the concourse.

The concourse proposal offers easy scheduling of construction, which could lower interest payments in early years. But the full construction option would be the most costly of all suggested alternatives.

The East Broadway parcel’s advantages include good pedestrian and vehicle access, the opportunity to create a new Civic Center and the chance to extend “the Balboa Park architectural heritage.” But because of its distance from county courts, separate office space would have to be found for city prosecutors, the consultant noted.

The SDG&E; parcel would also allow for creation of a new Civic Center, one which could revitalize the shabby east downtown area. It, too, would require separate office space for city prosecutors. While it is the cheapest option, it may contain hidden costs such as the cleanup of soil contamination.

With the two-thirds majority of voters needed to sell bonds to finance the plan, a prospect the task force considers unlikely, certificates of participation are suggested as the best way to finance construction.