Proposed New Civic Center

Background

Currently, two-thirds of the City of San Diego's downtown-based employees work in leased office space, costing the City approximately $13 million annually. The ongoing lease costs and the deteriorating condition of the City Administration Building (CAB) were two primary reasons the City initiated discussions for proposals for the redevelopment of the four City blocks that currently house CAB, the Civic Theatre, Golden Hall, a parking garage, the City Operations Building and Fire Station 1. CAB only has a fire sprinkler system on six of its 16 floors, including the basement, and needs roofing work, among other improvements. It is estimated to cost a minimum of $37 million just to address the existing deficiencies in CAB for the safety of the public and employees and extend the life of the building.

The project proposed by Gerding Edlen calls for the construction of a new 33-story high-rise that would house City operations and City staff as part of a mixed-use complex.

On Wednesday, June 10, 2009, the City Council City Council Rules, Open Government and Intergovernmental Relations Committee held a three hour public hearing devoted entirely to the proposed Civic Center project.

A recent analysis conducted by consultant Jones, Laing, LaSalle compared the costs of maintaining and repairing the existing civic center while leasing necessary office space with building a new civic center. The analysis determined that taxpayers could save money in potentially just a handful of years.

The Latest

On October 12, the San Diego City Council approved entering into an exclusive negotiating agreement with developer Gerding Edlen to determine if the project is a good idea financially. The negotiations will result in realistic cost figures for the proposed civic center development. If the resulting proposal does not yield City savings over current costs, the City Council has the right to not move forward with the project.

Time Period	Option 1: Hold Steady	Option 2: New Civic Center	Financial Difference
10 years	$216 million	$179 m - $231 m	Could range between costing $15 million to saving $37 million
15 years	$416 million	$338 m - $399 m	Could save between $17 million - $78 million
50 years	$790 million	$554 m - $600 m	Could save between $190 million - $236 million

What's Next

The negotiations will include input from environmental experts, construction consultants and financial specialists and should conclude by mid-2010. I will only support moving forward if the development saves the City money from day one forward, as compared to the �hold steady� scenario; the developer accepts financial risk including cost overruns and building delays; and the development is a state of the art example of environmental sustainability.