Expensive Lessons in How Not to Build : Pasadena: Cost overruns. Asbestos. Failure to include furniture in the cost estimate. The Hale and Police buildings were misadventures in construction for city officials.

It sits abandoned with smudged windows, plaster falling off the third-floor ceiling and its ornate-ceilinged, downstairs lobby barren and dusty.

The George Ellery Hale Building, across the street from City Hall, is a city embarrassment, a rehabilitation project gone financially awry until work was stopped in May. Costs have skyrocketed from $500,000 to an anticipated $3.7 million, including unexpected and expensive asbestos work.

The Hale Building and the recently opened Police Building--whose construction costs rose from $17 million to $23.5 million--are twin adventures in public mismanagement, city officials ruefully admit.

“It’s like taking a blindfold and running outside and trying to find your car,” Director Chris Holden said of the city’s performance on the projects.

“There was literally no one in City Hall who knew how to build a building,” Director Kathryn Nack said.

As a result of these construction debacles, the two directors, who sit on the city’s Finance Committee with Director Rick Cole, have slowed the city’s building plans while they try to take stock.

“What we really need right now is just what we’re doing: survey the need for space, and while we’re doing that, just call a halt to anything coming out,” Nack said.

In retracing what went wrong on the Hale Building--intended to house the city Planning Department--and on the new Police Building, city officials blame inexperience. Pinched for funds, the city had built no buildings in decades. Even basic upkeep of the city’s buildings was postponed for financially rosier days, said Norman Carter, who is now overseeing the city’s construction budgets as acting director of the Administrative Services Agency.

“The whole building thing with the city is fairly new,” Carter said. “The major capital program sort of caught us without the in-house expertise to do the job.”

When the city finally did embark on capital programs under then-City Manager Donald McIntyre, the agenda was ambitious. It included $6 million in repairs to existing city buildings, purchase and rehabilitation of the Hale Building, and construction of a new police building, two fire stations and the Villa-Parke Community Center in Northwest Pasadena.

With the approval in 1986 of a $17-million bond issue, the city embarked first on the Police Building project but quickly found itself in murky financial waters as costs rose to $23.5 million before the building was completed in June.

Nack, who operates an engineering firm with her husband, said she felt that the city was not following accepted construction procedures and wrote a paper 1 1/2 years ago detailing her concerns. Among them was her belief that Robert Edgerly, then head of the Administrative Services Agency, lacked experience in construction and that no one else at City Hall had any experience either.

Cole, who said he supported Nack’s observations at the time, admitted that most of the board was “simply not paying very close attention.”

Board members relied on what they were told by the staff, McIntyre was eager to get the building projects done and denied that cost overruns were even occurring, and Edgerly mistakenly relied on paid consultants, Cole charged.

McIntyre, now a consultant, said that most of the criticisms were accurate.

“In retrospect, it’s easy to see where the mistakes were made,” McIntyre said. “We didn’t have the expertise to take on major projects and we relied on paid construction managers.” But he denied that he failed to inform the board about the cost increases on the Police Building.

Edgerly, now assistant city manager in West Hollywood, could not be reached for comment.

Eventually, Cole said he and Nack agreed to turn their complaints over to a residents’ committee in late 1989 to study the problem. The committee recommended that the city create a position for a capital projects administrator to oversee city construction and to help avoid such difficulties in the future.

Carter, who in May was placed in charge of finding out what went wrong on the city’s building projects, agrees with most of Nack’s initial observations.

The costs of the building’s furniture, computer and communications center were not added to the initial construction estimate, Carter said. In addition, the project lacked an overseer. Instead of a general contractor to watch over the entire project, the Police Building had three managers in charge of separate contracts for the building’s foundation, steel skeleton and construction.

“The traditional approach in construction is to have one person responsible for everything,” Carter said. “It sort of muddies the water when you break it up into three different packages.”

If the Police Building had three overseers, the problem with the Hale Building was just the opposite, Carter said: It had no one to oversee costs.

When the Southern California Gas Co. in 1988 moved out of its three-story, Spanish-style building at 281 Ramona St., the city was eager to buy the 25,637-square-foot structure. Its large, open downstairs lobby and broad counter space seemed perfect for Pasadena’s Planning Department, which was crammed into about 9,000 square feet of space at City Hall.

“The big counter area would have allowed us to have a one-stop permit operation,” Carter said. All that was needed, city directors were told, were new partitions and rearrangement of the interior for about $500,000.

“Basically, it was the wrong approach,” Carter said. “They should have done a complete evaluation, not only of the renovation costs, but the building’s systems--electrical and mechanical--and the asbestos.”

The city bought the building for $2.8 million and hired an Arizona-based consultant, Kitchell CEM, which recommended saving money by eliminating a general contractor.

Thus, the city made its second and biggest mistake on the Hale Building: failing to have someone responsible for holding the line and following a budget, Carter said. Increases in the project went before the directors in piecemeal fashion, with the remodel upped at one time to $1.7 million to include costs of plastering over asbestos. Later, $900,000 was added to convert the building’s garage to office space.

When Carter became project overseer in May, work was continuing, some of it obviously ill-conceived, he said. Plans called for installing a suspended ceiling from a third-floor ceiling that was itself an unstable suspended ceiling with plaster crumbling off in chunks.

“That’s where I became concerned,” Carter said. “That’s when I shut down the building.”

A thorough financial assessment, done for the first time, revealed earlier this year that the cost of revamping the building will come to $3.7 million--a far cry from the $500,000 originally budgeted.

Faced with that increase, Holden earlier this month proposed leasing the building, involving the county in a joint venture or exploring other ways to recoup city losses. But a recent analysis shows that the only economical path for the city now may be to take its financial lumps and keep the structure.

A Finance Department analysis found that various leasing or selling schemes would result in losses ranging from $1.8 million to $4.1 million because of the expense involved in renting space for the Planning Department, which still needs to move out of its cramped quarters.

City directors have yet to decide upon the fate of the building, which continues to sit vacant, a testament to past financials blunders.