On many levels, it makes sense to tear down the old, seismically unsafe building that is San Diego City Hall and start over.
The city occupies over a million square feet downtown, some of it owned, some of it leased for $13 million a year. The buildings in the Civic Center are not compliant with the Americans with Disabilities Act, access for the public is challenging with departments scattered across town and parking is insufficient for employees, let alone visitors.
However, the fact that taxpayer monies are being spent on the project can be a tough sell, said Derek Danziger, marketing and communications vice president for Centre City Development Corp.
With the city's leases expiring on the Civic Center in 2013 and 2014, the city felt it was crunch time to find a solution to the space – to either remodel or rebuild.
To find a solution, the CCDC has studied rebuilding versus remodeling versus doing nothing to the Civic Center complex, said Jeff Graham, CCDC assistant vice president of development.
They the search has been narrowed down to one developer’s proposal. Portland, Ore.-based Gerding Edlen, remains after Houston-based developer Hines dropped out Aug. 15.
Gerding Edlen is proposing a mixed use project that puts the city buildings in one high rise and then adds a hotel and retail stores to the city block. They city will also have more office space than they need, which they can lease until expansion of staff calls for it.
“We are an urban mixed us developer and if you read what the city is looking for, they are looking for an urban mixed use development,” said Principal of Gerding Edlen Tom Cody. “To us, this was never just about City Hall. To us, the underlying premise is that you can take the savings that we’ve demonstrated and turn it into firefighters on the street and potholes filled.”
Mike McShea, senior vice president of Jones Lang LaSalle, the company that did the independent financial analysis for the CCDC found the development could save the city $424 million over the next 50 years, compared to remodeling the existing structure.
In addition to Gerding Edlen’s proposal, the City Council will also be able to look at seven scenarios the CCDC studied for renovation of city's current buildings. They development corporation found that renovation of city-owned buildings would lead to 30 additional years of useful life, with the need to find more office space and parking for employees in the future. The renovation was projected to cost $125 million in construction, and cost San Diego $1 billion to $1.5 billion over 50 years, depending on which of the scenarios was used, Graham said.
When the city looked at rebuilding, it found a new building could meet future staffing needs for the next 50 years. Instead of a million square feet, the city would need 700,000 square feet, because employees would need less space with modern equipment.
The most cost-effective 50-year alternative called for the conversion of the Concourse to office space, renegotiating lease rates and migrating employees to efficient workspaces. If this was done, it would cost the city $1,052,881,188.
The most cost-effective in the short-run was to basically do nothing. The alternative called for no renovations and to accept the latent risks that came with that. For the first 15-years, it would cost the city $381,100,731. In 50 years, however, it would cost the City of San Diego $1,305,832,968.
CCDC issued a request for proposals in July 2007, looking for an energy-efficient building that could utilize the city block and create a quality public space, Graham said. Developers had the option to reopen B Street, keep Fire Station No. 1, and have an active mix of public, private, cultural and civic uses -- but the main goal was to create a vibrant central core that would result in savings to the city.
In December, an independent multidisciplinary committee selected Hines and Gerding Edlen, from an original list of eight, to advance to the next phase of the selection process.
The Gerding Edlen project seeks to bring people downtown with a market-dictated mixed-used project. It could include an office center, 150,000-square-feet of retail space -- including a grocery store and large book store -- and for-rent residential or hotel complex, in addition to the million square feet of space leased by the city.
The project would have three towers and has the potential to be LEED platinum, with a hydronic HVAC system, solar panels, a green roof and windmills on the roof.
"I think this is a project that wears sustainability on its sleeve," Cody said. The developer also plans to rip out the current parking structure and build parking underground.
Gerding Edlen’s experience with city complexes focuses on 24-hour vitality and mixed use.
The Brewery Blocks in Portland, Ore. turned five blocks of historic buildings into a master-planned community of office buildings, a Whole Foods grocery store, a theater and public walk ways.
"To the best of my knowledge, we're one of the few developers in the country that have ever pulled something off like that," Cody said.
Gerding Edlen is also working on South Park in Los Angeles, which is bringing the first housing to downtown in 20 years. The development features green space and pedestrian walkways.
"That shows how we can dramatically change the neighborhood by carefully crafting the pedestrian environment and then bringing density to an area that didn't have it before," Cody said.
If approved by the City Council, construction could start by 2010.