Financial Worries Prompt a Delay in City Hall Plans

San Diego’s plans for a new, $275-million City Hall fell victim to its impending budget crisis Tuesday, when the City Council indefinitely halted a design competition for the proposed Centre City East government complex.

The decision freezes plans for the project even before they get on the drawing board, causing a delay until at least June or July--after the council figures out how to cope with a $60-million revenue shortfall for the fiscal year that begins July 1. Only then is the council expected to decide whether to proceed at all.

“Talking about a new City Hall at the same time that we have a $60-million budget shortfall seems to me to be sending the wrong message,” said Councilman Ron Roberts. “I don’t think, in a year when you have such enormous shortfalls, that you can build a new home.”

“Let’s be real here,” added Councilwoman Linda Bernhardt. “Let’s take a look at not just this year’s budget, but at what other burning projects we have to deal with.”

Nevertheless, the city can expect relatively modest savings by postponing the design competition that had attracted letters of interest from 250 architects around the United States and beyond. The juried competition would have cost about $800,000, most of which would have been spent on $100,000 honorariums for each of the five finalists.

Scrapping the project entirely would save the council $500,000 annually in general fund revenues from fiscal 1992 to fiscal 1995, when the new building, financed by borrowing that does not require voter approval, is scheduled to open.

And it would mean continuing the practice of leasing space in office buildings throughout downtown to supplement jam-packed City Hall, a practice that will cost the city $319 million between fiscal 1988 and fiscal 2010, according to Deputy City Manager Maureen Stapleton.

The council also narrowly approved Tuesday a $100,000 consultant’s study of how the existing government complex downtown--which includes the City Administration Building, the City Operations Building, Golden Hall and the community concourse--be reused. The study seeks to determine how much revenue could be earned by leasing the buildings and the land for other uses, Stapleton said.

Council members Roberts, Wes Pratt, Bob Filner, John Hartley and Mayor Maureen O’Connor voted for the study. Council members Bernhardt, Judy McCarty, Abbe Wolfsheimer and Bruce Henderson opposed it.

The city already has spent $2.2 million since it embarked on the plan to move local government to a 1.05 million square-foot, 5-block complex on an East Broadway site more than two years ago, Stapleton said. About $1.2 million was spent to purchase a third of a block on Broadway, between 13th and 14th streets, and the rest paid for studies of the proposed move, she said.

But those and other city plans may be altered in the face of a budget deficit that City Manager John Lockwood has pegged at $60 million--the money needed to keep city services at current levels when fiscal 1991 begins July 1.

Lockwood last week notified city workers that several hundred of them may be laid off because of the unresolved budget crisis, which the council will again address in May. Lengthy debate on new taxes to finance the shortfall ended earlier this month with the decision to place only a $25-million bond measure on the ballot to finance a police and fire communications system.

The city plans to finance the new City Hall by selling “certificates of participation,” a form of borrowing that does not require the voter approval needed to issue general obligation bonds. Leases of existing city buildings and other revenue would be used to pay off the debt.

A seven-member jury that includes architects, an artist, a community representative and a developer has been impaneled, and letters of interest in the project have poured in from more than 250 architects. They will now be notified that the project has been put on hold, Stapleton said.

“The embarrassment of San Diego having an international competition and not following through would be one thing,” said Roberts, an architect, “not to mention all the money that would have been spent.”

Roberts, Bernhardt and McCarty said Tuesday that the city must again look at leaving City Hall where it is and devise new, less expensive ways of housing city employees in nearby buildings.

With new office towers springing up throughout downtown, the city might be able to take advantage of the demand for occupants by negotiating less expensive, long-term leases now, Roberts said. Bernhardt wants to know if a new city office tower could be built where Golden Hall now stands, with commercial concerns occupying the open-air plaza outside.