Voters to Decide on $300M City Hall Plan

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    NEWSLETTERS

    Gerding Edlen Development

    How badly does San Diego need a new City Hall? Is it worth spending nearly $300 million plus bond costs?

    The City Council has decided that voters will choose on the upcoming November ballot.

    The 19-story project under consideration has been scaled down by about half from the original concept that was proposed in 2008. It would go up on the current site of Golden Hall, just west and north of the 13-story current City Hall at 202 C Street, which opened in 1965.

    Estimates are that the $293.5 million-dollar highrise designed by Portland-based Gerding Edlen Development Co. would save the city nearly $250 million over its useful lifetime. And many City Council members endorsed the proposal.

    "Looking at it as a business decision, i think it is the exact right thing to do for the city," said City Council Member Kevin Faulconer.

    Other members cited the need to have a safe environment for city employees and residents who visit the building. Job creation was also cited as a benefit. But Council President Ben Hueso said whether voters decided to build a new City Hall or renovate the existing one, spending was still necessary.

    "The choices are stay and borrow, and build and borrow, because whatever we do, we're going to have to borrow," he said.

    "The ultimate problem is that [city government] is housed in a building that is a half-century old and is a public safety hazard," said Scott Maloni, chairman of the Downtown San Diego Partnership, a consortium of downtown business and commercial firms.

    "It's a financial liability for the taxpayers," Maloni added in an interview Monday.  "God forbid there's a an earthquake or a fire -- there's no sprinkler system in that facility."

    Maloni pointed out that it costs taxpayers more than $13 million a year to lease outside office space for all the municipal employees who can't fit into City Hall. Upward of $40 million is needed for repairs that would extend the building's life for another decade, plus $9 million for sprinklers and other upgrades to meet fire codes.

    Despite the 7-to-1 vote, questions still remained from Councilwoman Donna Frye about the ultimate cost of borrowing money through municipal bonds. Developers estimated bonds would be issued at a 5.5 percent interest rate. But a higher interest rate would significantly reduce the amount of savings from the new building. "

    If you are going to commit to the $295 million, I would like some kind of a commitment not to exceed, say, for example, $800 million," said Frye.

    Critics of the project, though, say it's a boondoggle in the making.

     

    "Ultimately, I think that voters -- San Diego voters -- are smart enough to see that this is yet another special interest project," City Councilmen Carl DeMaio said. "Our neighborhood infrastructure is crumbling. This would not be at the top of the list of priorities for San Diegans ... and the cost savings certainly are not what they are made out to be by project boosters."

    Boosters urged the council not to put the project before city voters on the Nov. 2 ballot, but, instead, vote it "up or down" itself,  just as they would a bridge, fire station or wastewater facility.

    Maloni said that scientific polling indicates that 58 percent of likely voters favor the project, and that waiting for an advisory vote from the public would waste at least $250,000 in election costs and several months of progress at a time when the cost of construction materials and labor is at a low level.

    Retorts DeMaio: "The people paying for it should be able to decide whether it's a good bargain and whether it reflects their core priorities."