Plan to Relocate City Hall Dealt a Severe Blow : Government: Council decides against initiating acquisition of property on eastern side of downtown San Diego.

In a serious setback to an ambitious plan to build a monumental $373-million City Hall complex on the eastern edge of downtown, the San Diego City Council on Monday decided not to begin acquiring property for that project.

Deferring a decision on where--or even whether--a new governmental complex might be built, the council took a series of actions based on the premise that the existing City Hall will remain in use for the foreseeable future.

Looking to cut both short- and long-range costs, the council directed city administrators to begin negotiating long-term leases for downtown offices--a necessity because of City Hall’s space limitations, and indicated a desire to more closely examine the possibility of building a new civic complex on City Hall’s present site.

Though the council did not officially close the door on the 2 1/2-year-old proposal to build a “Capitol on the Hill” on downtown’s eastern fringe, its actions demonstrated that a majority of its members have strong fiscal and philosophical objections to the plan--concerns that supporters and opponents alike doubt can be overcome.

In particular, council members were swayed by estimates that, by renovating the existing City Hall and acquiring several nearby high-rises to meet city government’s space needs, the city could cut the project’s costs by nearly 45%, reducing the price tag to $208 million.

“It’s not dead yet, but support for a new City Hall in Centre City East is obviously very weak,” said Councilman Ron Roberts, who led the effort to block those plans from proceeding. “There clearly are major concerns, not the least of which is cost. When we get more information (about alternatives), that may be what finally kills it.”

A visibly frustrated Mayor Maureen O’Connor, who persistently exhorted her colleagues to “show some vision” by backing the proposal, called Monday’s action “a very serious blow” to a plan many hailed as a critical component in the revitalization of downtown’s eastern side.

“You are closing the door, in my opinion, on the redevelopment of the last part of downtown San Diego,” O’Connor complained. “It’s not bold, and it’s not visionary.”

The council rejected City Manager Jack McGrory’s recommendation that the city begin acquiring land in the four-block area bounded by 12th Avenue and 14th, C and E streets by a 5-3 vote, with only O’Connor and Councilmen Wes Pratt and Bob Filner supporting the plan. Councilwoman Judy McCarty was absent.

As an alternative, Roberts had initially proposed that a task force study the feasibility of building a civic complex on the existing City Hall’s two-block site in central downtown. However, after turning back McGrory’s “land-banking” plan in eastern downtown, Roberts withdrew that portion of his own proposal, but said he intends to bring it back before the council for action next month. At that time, Roberts said, he will press for a six-month limit on the study of how the existing City Hall site could be redeveloped.

Before making a decision on where a new City Hall should be built, Roberts argued, the council needs to thoroughly examine the options available on the existing site. Although a 26-member task force headed by Horton Plaza developer Ernie Hahn has studied and touted the Centre City East plan for several years, the feasibility of redeveloping the existing City Hall concourse has not received the same attention, Roberts argued.

“A level playing field is what I’m calling for here,” Roberts said. Exploration of the options on the existing site, Roberts added, would not preclude the the council selecting the Centre City East site but would simply “put these two proposals on equal footing.”

Filner, however, contended that Roberts’ preference for examining the existing City Hall site “would make it very difficult . . . if not impossible to achieve” the Hahn committee’s proposal.

Concurring, O’Connor described the council’s decision not to acquire property in Centre City East as “totally backward,” arguing that the land would be a valuable asset regardless of whether it was used for a civic complex or for other purposes such as housing.

“Now’s the time to buy, when there’s a recession and the prices are low,” O’Connor said. “By waiting, we’re missing a great opportunity.”

Skeptics of the plan, however, consistently returned to the issue of cost, arguing that they found it difficult to justify the projected $165-million disparity between building a City Hall in Centre City East site and at the existing site.

An always volatile topic, the debate over possibly spending hundreds of millions of taxpayers’ dollars is even more contentious in this case because it is occurring not only in a council election year, but also at a time of deep cutbacks in some city services.

“There is absolutely no (public) support of any nature for building a new City Hall,” said Councilman Bruce Henderson, who predicted that “all hell would break loose politically” if the council moved ahead with such a plan.

Similarly, Councilman Tom Behr said that, although he admires the Centre City East proposal “on an aesthetic level,” he “cannot in good conscience” rationalize undertaking such a costly project now.

O’Connor, Hahn and city planners, however, argue that construction of a City Hall on downtown’s eastern edge could serve as a catalyst for residential and commercial development in that area, much as Horton Plaza has done for downtown’s core. In an effusively favorable review, a report by the city architect’s office states that the Centre City East location “offers the city a rare, perhaps a once-in-its-history opportunity” to create “the missing anchor for downtown.”

Others, however, question that assumption, arguing that civic centers are not the type of project likely to spur development. Officials of San Diegans Inc., a downtown advocacy group, also warned that removal of City Hall from its existing site could create a “black hole” in downtown’s core that could both jeopardize the survival of existing retail businesses and discourage development.

If a new civic complex were built on downtown’s eastern edge, the existing City Hall site would be redeveloped, generating revenue to help fund the project. To limit the city’s financial risk, city administrators recommended that construction on any new City Hall not begin until development commitments for the present site are secured.

In the end, however, the council opted to simply postpone the difficult site decision, while simultaneously taking steps to meet the city bureaucracy’s immediate space requirements.

By a unanimous vote, the council authorized McGrory’s staff to negotiate long-term leases of up to 10 years in existing buildings and to study the feasibility of pursuing options to buy those structures. City administrators estimate that the long-term leases will reduce San Diego’s annual office rental expenses--projected at $8 million this fiscal year--by about $1 million annually.

To buy more time for review of its options, the council also amended an ordinance requiring installation of fire sprinklers in City Hall and other high-rise buildings by 1996. Under the council’s action, approved, 6 to 2, with O’Connor and Filner opposed, the 1996 deadline was pushed back four years, provided that a building’s owner is committed to demolishing the structure by the year 2000.

According to city estimates, deferral of the sprinkler installation in City Hall could save as much as $11 million. However, O’Connor warned her colleagues that, in the event that a fire at City Hall later this decade resulted in the loss of lives, lawsuits could cost the city millions more than the estimated savings.

“That’s a much bigger risk than buying some land,” O’Connor concluded.