The non-DeMaio thinking

Everyone interested in whether or not City Hall should build itself a new home, raise your hand. Keep your hand up if you know whether the project has support or opposition from anyone bearing the title “councilmember” or “mayor.” Keep your hand up if the person bearing that opinion is not named “Carl DeMaio.” Huh. Everyone’s hand is down.
The seven City Council members not named DeMaio and Mayor Jerry Sanders have been remarkably quiet on the new-city-hall question, even after the third and most recent financial study on the project hit their desks on

Wednesday, April 22. The report, produced by the financial services firm Jones Lang LaSalle, said that over a 10-year time frame, the project would cost the city $30.0 million* over and above staying put (the “hold steady” option), but those costs turn into $19 million in savings at the 15-year marker and $232 million in savings at 50 years.

If the city moves forward, the next move would be to establish an exclusive negotiating agreement (ENA) with the developer, Oregon-based Gerding Edlen. This agreement, common in large projects, prevents the city from negotiating with anyone else during a set time period but in no way commits the city to the project. The negotiations would determine the exact costs, revenues and other parameters.

If the city stays put, JLL emphasized that city employees would need to find a new workplace within 10 years because mechanical systems will begin to fail.

Sanders and City Councilmember Kevin Faulconer say they’re looking for more information. Specifically, they’re asking the Centre City Development Corporation, the agency leading the development process, to conduct a more detailed study on the costs of staying put for the next 10 years. They’re co-authoring a memo that will be sent this week.

“I want to make sure there will be both short-term and long-term savings for the taxpayer,” Sanders told CityBeat. “I think we can get this done in a few weeks.”

Faulconer seemed somewhat more interested in getting into negotiations but tempered his interest pending results of the study. “We cannot ask employees to make sacrifices while we build a new complex,” he said.

DeMaio believes the short-term expenses outlined in the report should kill the project. The day after the report came out, he asked, via Facebook, that the mayor and City Council “officially ‘shelve’ the proposal to build a new City Hall during this fiscal crisis.”

“It’s shocking,” Councilmember Todd Gloria said, with irony, about the notion that a major project would cost money in the first few years. He went on, without irony: “It’s not surprising that there would be upfront costs to a project like this. The question is whether San Diego will have the vision to build this kind of project.”

City Councilmember Marti Emerald supports getting into an ENA, particularly since it doesn’t commit the city to anything.

“I think the idea of a new civic center is terrific,” she said. “I want all of us to sit down and go through these numbers with the accountants. But staying here in this building is a safety issue. Trying to retrofit this building is not worth the money.”

But others aren’t ready to commit. Councilmember Donna Frye said she’s too consumed with the city budget to think about a new city hall. A spokesperson for Councilmember Sherri Lightner said she hasn’t finished reading the report. A spokesperson for City Council President Ben Hueso said he would not be available to comment for this story.
Councilmember Tony Young also said most of his time was being taken up with the budget, but when CityBeat approached him, he didn’t seem keen on the project.

“I question the assumptions,” he said. “Why put all the departments under one roof? Why put the city hall Downtown, where it will be the most expensive to build?”

However, he said he’d read the reports carefully before the matter comes to the council for discussion.

Adrian Kwiatkowski, a lobbyist on the Gerding Edlen payroll, said the developer had met with all the council members except for Young. He said Hueso had been interested in moving forward with the project and that Frye was intrigued by the environmental efficiencies designed into the buildings. Neither Hueso nor Frye returned calls to confirm these statements.

Gerding Edlen project leader Tom Cody emphasized that further delays will increase costs. In past interviews, he told CityBeat he and his team might leave the project if there isn’t movement by May or June. In the most recent conversation, he said he’d had productive conversations with the representatives from the state of California about moving its workers into the complex, and he also expressed interest in applying for $42.5 million in stimulus money targeted at paying for bond interest on major public-works projects. But in each of these cases, time weighs heavily.

“We need to get to first base,” he said. “An ENA on this, that’s first base—the light petting stage.”    

* The original versio of this story had a subtraction error that misreported the difference as $47.7 million. We apologize for this error. 

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