Plans Previewed for $241-Million City Hall Complex

The San Diego City Council had its first formal look Tuesday at a proposal to build a monumental, $241-million City Hall complex on the eastern end of downtown, and its sentiments can best be described in a word: Questions.

It wasn’t that the council does or doesn’t like the idea--in fact, it was noncommittal--it’s just that it has lots of questions about it, mostly about the financial projections that lie at the heart of the plan.

For his part, City Manager John Lockwood, who has embraced the proposal first made by a city consultant in July, told the council that the city faces a clear choice: “We’re either going to buy something or lease something.” If the council continues to choose the latter, the city by the year 2031 will have paid $1.5 billion on the lease, his office told the council.

It was a day for downtown development before the City Council as it also discussed plans for a new central library. In a separate matter, it approved an emergency ordinance requiring all construction projects proposed for the northern end of downtown--generally from Harbor View to Cortez Hill and the B Street and Broadway office corridors--to win clearance from the council while a new downtown land-use plan slowly wends it way to completion.

As for the new City Hall complex, the council spent an hour and a half both listening to and discussing the conclusions of a consultant’s report that evaluated three possible locations. One of the sites, near the bay but away from the core of downtown, has been dismissed, leaving only two locations to be debated.

Those two are the existing City Hall in the Community Concourse and the proposed “Capitol on the Hill,” a complex of city offices with room for a library and other public facilities on seven blocks in Centre City East, just south of City College and across from the new police headquarters on 14th Street.

For a variety of reasons, including its cost, its potential to help turn around a depressed area of downtown and the opportunity to create a large public plaza and a “landmark” City Hall with a rotunda capped by a dome, both the consultant and the city manager have recommended that the city build this civic center complex.

It would be paid for by 30-year certificates of participation, a funding mechanism the city used when it built the police headquarters. An integral part of the funding package calls for the city to lease its existing City Hall-Community Concourse buildings to private businesses and use that money, together with the millions it would save each year from no longer having to rent extra office space, to help pay off the debt.

But some council members, such as Ron Roberts, said they want to make sure the cost assumptions and revenue projections are as rosy as presented by the consultant, led by the ROMA Design Group of San Francisco, and the city manager.

Specifically, Roberts said, he wants the city manager to explore an alternative that would include keeping the current City Hall in use and perhaps buying an adjoining block to build new office space.

Roberts said he wants to make sure this wouldn’t save $50 million or so, which would substantially offset the cost of a new library.

Councilman Ed Struiksma was among those on the council who wanted assurances that, if the council selects the Centre City East proposal, it will become a facility capable of serving its purpose beyond 25 years. The existing City Hall complex was built 24 years ago, and is much too small for today’s downtown city work force, which is expected to grow from about 1,900 now to 3,271 in 2010.

Struiksma also advanced another idea. He said the city should seriously consider buying all the blocks between 12th Avenue, where the new City Hall in Centre City East would be, and Interstate 5. Those blocks, one of which contains the police headquarters, could then be transformed, he said, into a large park similar to the lush one behind the state Capitol in Sacramento.

Perhaps the most skeptical council member was Judy McCarty, who said she is concerned that the “Capitol on the Hill” plan might be considered too “extravagant,” but she acknowledged that the city short-changed itself when it built its existing City Hall. “We did it cheap last time,” she said.

McCarty said she is also worried that no one will want to rent City Hall, given the amount of new office space being built downtown. “There’s a lot of office space, and this building might sit empty,” she said.

She made it clear that she will have to be convinced that the move to Centre City East is the right one.

“I’m not buying it yet. You’re going to have to sell me on it,” she said, asking Lockwood to further explain his endorsement.

Lockwood was not shy, as he forcefully made a case for the city building and owning all of its office space.

“My motivation is to save money, not spend it,” he said. “We can’t afford to continue to lease. . . . This is the more economical way to approach the problem over the next 30 to 40 years.”

He said that, looking only five years ahead, it would be preferable for the city to continue leasing the extra space, for which it pays about $5.4 million a year. But, in the long run, it doesn’t make sense to pay out more and more in rent, both Lockwood and his chief assistant on the project, Deputy City Manager Maureen Stapleton, told the council. The city now leases the same amount of space outside City Hall that it has in the building.

“It’s not a question of whether we can afford it,” Stapleton said, “but whether we can afford not to do it.”

Stapleton said that, although the city can expect to pay $1.5 billion in cumulative lease payments by the year 2031 if it continues renting office space, it would, by building the first phase of the new City Hall by 1995, be able to show a surplus of revenue over lease payments by 2007.

Mayor Maureen O’Connor said she generally likes the Centre City East project, noting that development around the existing City Hall complex has limited the City Hall’s expansion.

Because the council met in a workshop, it didn’t hear any testimony from the many people in the audience. That will have to wait until Nov. 28, when the council has scheduled a public hearing on the Civic Center proposal.

On the central library matter, the consultant told the council that the new facility would best fit with the Centre City East City Hall complex. The city manager said the cost of building the 376,000-square-foot structure, including parking, would be about $78 million.

Lockwood wants the council to combine the central library’s cost with that of 10 branch-library construction projects in a $105-million, general-obligation bond measure to be put before voters either next November or in 1990.

Lockwood said the city should seek state legislation reducing the two-thirds majority now needed to approve general-obligation bonds to 60%. The library issue will again surface Nov. 28.

The City Council decided to place a one-year restriction on the height and density of buildings planned for the northern end of the city, including Harbor View, Cortez Hill, the central business core not now covered by a redevelopment district and the blocks across Pacific Coast Highway from the historic County Administration Center.

Under the emergency ordinance, the council will review every project proposed in the area, consisting of about 115 blocks, to make sure the projects don’t undermine the intent of a downtown land-use plan being created by the Centre City Planning Committee, which is led by Horton Plaza developer Ernest Hahn.

While the intent in the Harbor View neighborhood, for example, is to hold down the heights of buildings to about 50 feet, the council will have the power to allow developments to go higher than that should they meet urban-design and site criteria.

About a dozen developers and property owners from the Harbor View area told the council they didn’t want the ordinance, fearing their land will decrease in value because of new restrictions in an area that now has very few.

One of the projects most immediately affected by the new ordinance is a 22-story hotel at 1646 Front St. The developers of the hotel have spent about $2.7 million on the project and have begun to pour concrete for the foundation. But, under the emergency ordinance, the building permits for the rest of the construction will be held up until the project is brought before the council or the city attorney rules it has a vested interested and should be allowed to continue.

Some council members, such as Roberts, have questioned whether the project is too big and whether it is properly designed for the area.

But Paul Peterson, a San Diego attorney representing the hotel developers, said that, if the project is not allowed to continue, “we have no choice but to take the city to court.”

Chuck Evans, a vice president for Concrete Dynamics, the firm building the hotel, told reporters later, “I think it’s absurd and unfair. . . . We’re being done a great injustice.”