City Hall reconstruction plan gains steam

The City Council agreed Monday to enter into exclusive negotiations with a Portland-based developer to possibly construct a new San Diego City Hall complex.

The City Council voted 5-3 to authorize the so-called exclusive negotiating agreement with Gerding Edlen and to allocate up to $705,000 for costs associated with the talks.

Casting the dissenting votes were council members Donna Frye, Sherri Lightner and Carl DeMaio.

The contract between the developer and city is intended to lead to a concrete estimate of how much the proposed project will cost and to finalize the design.

Gerding Edlen has proposed replacing San Diego’s aging, 1960s-era City Hall building with a 33-story, 964,000-square-foot glass and steel tower with an adjacent first-floor building that would house the council chamber.

Preliminary cost estimates for the project are $440 million.

Frye said she voted against entering into the negotiation agreement with the developer primarily because language was not included that would commit the project to a public vote.

“I need a commitment that we are actually going to give the public a vote because we are using public money,” Frye told her colleagues.

The lack of a guarantee that voters will get to weigh in on the project also drew DeMaio’s ire.

“If this is such a great project, why do we fear a public vote?” he asked.

DeMaio also said that instead of rebuilding City Hall, San Diego should look to renegotiating its existing leases at more favorable rates as office occupancy levels decline amid the weak economy.

Mayor Jerry Sanders has pledged that ultimately voters will decide if San Diego gets a new City Hall. City staff said the project could be on the ballot in November 2010.

At the start of the hearing, Sanders said San Diego will “walk away from this project” if negotiations with the developer do not show that a new City Hall will save the city money.

“We’ll not go down this road if it doesn’t pencil out for the taxpayer,” Sanders said.

According to a study by Jones Laing LaSalle, redeveloping City Hall would save the city $37 million in the first 10 years, with much greater savings down the road.

San Diego’s existing City Administration Building is deteriorating, has inadequate fire suppression systems, lacks necessary seismic retrofitting and contains asbestos.

Updating City Hall alone would cost about $40 million and only expand the building’s useful life another 10 years.

Project proponents also argue that millions of dollars would be saved by redeveloping the City Hall complex rather than continuing to lease office space at locations around San Diego.

“Consolidating city offices in a single efficient building is potentially much less expensive than leasing office space from landlords and extending the life of our current buildings through costly repairs and upgrades,” Sanders said.

Council President Ben Hueso went so far as to call City Hall a “blight” on downtown.

About two dozen speakers testified during today’s City Council hearing, and most were in favor of the project.

Lee Burdick, a lawyer and former candidate for San Diego city attorney, said public safety concerns surrounding City Hall were cause enough to replace it.

“We cannot overlook those liabilities without our own peril,” Burdick told the City Council.

Donna Jones, with the Downtown San Diego Partnership, described City Hall as “unquestionably inadequate.”

“As someone on Facebook noted, our civic center is a reflection of the caliber of our city, and the one we are in is an embarrassment,” she said.

Hud Collins testified that San Diego shouldn’t be looking to replace City Hall when it faces a predicted $179 million budget deficit in the coming fiscal year.

“We have no money in this city,” he said.

Gerding Edlen was selected in 2008 by the Centre City Development Corp., downtown San Diego’s redevelopment arm, as the project’s developer after a review of about a half-dozen proposals.