The city of San Diego’s pending move to relocate hundreds of employees out of a decrepit municipal building into modern leased office space seems well warranted.
The City Operations Building built in 1970 has major maintenance issues and was in need of $129 million in improvements, according to an assessment seven years ago.
The electrical system is problematic, elevators often don’t work and frequent sewer backups can make using the restrooms an unpleasant experience.
Similar problems, also costing tens of millions of dollars to fix, are found next door at the City istration Building, which opened in 1965 and is commonly referred to as City Hall.
The pending shift of most of the city’s Development Services Department workers to new environs not only serves as a reminder of the sorry shape of municipal facilities in the downtown civic center complex, but San Diego’s decades-long quest for a new City Hall.
That well-worn path of fits and starts — and so far failure — is about to be trod once again.
A city-hired consultant, P3 Advisors, is analyzing whether San Diego would be better off building a new City Hall complex or buying an existing downtown property, according to Jennifer Van Grove of The San Diego Union-Tribune. Their report, which initially was expected earlier this year, may be released in the coming days.
The city has tried both approaches before, more or less.
The most recent attempt involves the office tower at 101 Ash St., which has become perhaps the most notorious address in San Diego city government history.
Under then-Mayor Kevin Faulconer, and with the of then-City Councilmember Todd Gloria, the city entered into a lease-to-buy agreement for the building near the civic complex. While not a replacement for City Hall, the 19-story building was to provide work space for hundreds of employees and reduce the need for leasing other office space.
What happened next is well-known: Shortly after some workers moved in, they were told to vacate the building in January 2020 because of asbestos contamination. In addition to overpaying for the property, the city failed to conduct the kind of routine inspection common in real estate transactions.
Because of asbestos issues and other problems, the building has remained vacant ever since and is costing the city hundreds of millions of dollars, though exactly how much depends on the future of the property.
In 2022, Mayor Gloria agreed to settle litigation over 101 Ash St. that included the city buying the building and another nearby office high-rise outright. The hope to make lemonade out of the deal by later putting the civic center complex with 101 Ash St. out to bid for redevelopment — with the inclusion of a new City Hall — soured.
Developers showed virtually no interest, at least in part because the state Surplus Lands Act required a large number of affordable homes. The project apparently wouldn’t pencil out — or not make enough of a profit — and San Diego was stuck with a lemon.
But the Gloria istration seems intent on trying to redevelop the site. The failure of the first effort relieved the city of some of the affordable-homes requirement on the next go-round.
It’s hard to keep track of how many attempts to find a new City Hall there have been.
Van Grove noted that in the late 1980s and early 1990s, city officials, faced with costly office space lease renewals and the need for a replacement sprinkler system at City Hall, pushed unsuccessfully to acquire land in East Village, then known as Centre City East, for a new complex. The matter was revisited a few years later and fizzled out again.
Another effort moved forward in 2007 and within a couple of years a development team led by Portland, Ore.-based Gerding Edlen was picked to build a new City Hall.
A 34-story building was proposed for the land near City Hall. Amid cost concerns in 2010, then-Mayor Jerry Sanders downsized the proposal to a 19-story building to be located on property occupied by Golden Hall, a multi-use building that has hosted sporting events, conventions, election centrals and, in recent years, a homeless shelter.
The move to shrink the project was an effort to “sway skeptical voters frustrated with past financial decisions by city leaders,” according to The San Diego Union-Tribune.
Among those decisions was a scheme to underfund the pension system years earlier that the city is still paying for.
The idea was to put a bond proposal to finance the project on the November 2010 ballot, but that was thought to conflict with a Sanders’-backed measure asking voters to raise the sales tax a half-cent to help fund city operations. The City Hall pitch never made it on the ballot, and the sales tax was overwhelmingly rejected by voters.
In 2012, a possible new City Hall was briefly mentioned as part of developer Douglas Manchester’s erstwhile Navy Broadway complex on the San Diego Bay waterfront. That didn’t get far.
Manchester, who once was a partial owner of 101 Ash St., later would make a $5 million profit in the complex transaction that led to the controversial city lease of the building.
Not long before the current contemplation of replacing City Hall moved forward, another possible alternative seemingly came out of the blue.
In 2022, the state of California proposed redeveloping two blocks it owns in downtown San Diego just northwest of the City Hall complex. A developer proposed a largely residential project for the property that would include municipal office space, new City Council chambers, a civic plaza and a fire station, Van Grove reported at the time.
The dilemma over housing city government has been consistent over the years, except it has gotten worse. City Hall and related facilities continue to age, requiring more money to maintain. Meanwhile, the city continues to spend money on leased office space.
As always, convincing a skeptical public to make a big financial commitment with the promise of long-term savings will be no easy task.
The city is facing a growing budget deficit while 101 Ash St. and other botched city real estate deals loom in the public consciousness. The municipal government’s management capabilities are further being questioned in the wake of January’s devastating rains that overwhelmed the city’s flood control infrastructure — a problem that had been festering for consecutive mayoral istrations.
Visions of a new City Hall have faded under the weight of similar dynamics in the past, but apparently the hopes of current city leaders have not.
