Ok so I hope you’ve read the first part in my series on downtown San Diego, which featured 5 projects that all have been successful for the city. I wanted to look back at what has worked in San Diego to see if that can be applied to the current major decision which is facing the mayor/city council and CCDC……whether or not to tear down the current Civic Center complex and have it rebuilt.Some facts regarding the situation:-San Diego has 3,000 city workers with offices downtown-1,000 are located in the Civic Center-2,000 are located off site where the city rents office space at a cost of approximately $13M per year. Rents are generally well below market rate for now, with the vast majority of leases set to expire in 2013-2014. The city does not believe it will be possible to receive below average rents again as the office vacancy rate for downtown is around 5% with no major job losses, or new space coming available in the near or medium term.-The Civic Center itself is in need of renovation. San Diego has deferred maintaince on the facility for some time which has left exposed asbestos and a high rise without fire sprinklers among other serious safety concerns. Perhaps the biggest concern being the fact that no seismic retrofit has ever been performed. The cost of these upgrades, which would simply bring the offices to a usable state is estimated at $125M.Ok, so I’m sure everyone can see the two options that are available: Re-build, or Renovate.If you’re wondering why I’m not including a Do-Nothing approach, I frankly don’t think it’s reasonable or fair to expect anyone to work in an unsafe environment, especially if they work for a local government. Additionally most projections show that there are concerns about the building literally falling over in 10 years if no work is done.I’m also going to assume that the figures from the private consultant are accurate. For the most part there are been few arguments with the numbers they produced.Some figures from Jones Lang LaSalle(a Washington DC based consultant firm):The renovate approach would save the city $8.5M over the first 10 years.
The rebuild approach would save the city $58M over the first 15 years.
The rebuild apprach would save the city $232M over the next 50 years.So the question really is-How much sacrifice should a city government be willing to make over the next 10 years, starting in this bad economy in order to have substantial savings down the line.This decision seems pretty simple, but it is complicated drastically by the fact that the city is in some serious debt. In 2004 it was called “Enron by the Sea” by USA Today.The city is already cutting services like fire, police and library hours and locations due to the economic downtown. I’m not sure they could even come up with the $850k in savings each year to make the project happen at this point, but it certainly seems to me like something the mayor should be trying to accomplish given the massive long term benefits…although he has already stated that the project will not move forward if it does not save the city money from day one.It’s too bad really. I bet if they really wanted to they could find a way to fund the first 2-3 years of the project before the economy turns around(how about canceling some of the traffic improvements downtown which cost $250k per traffic light?).I will also bet that in 20 years the city is going to be wishing it had a newer facility as well as the $6M per year in savings. Think about how many traffic improvements, police officers, firefighters that could buy you.