City of San Diego pays nearly $18,000 a day to rent empty building

Move-in was supposed to happen July 2017
Posted at 7:34 PM, Apr 23, 2018
and last updated 2018-04-23 22:34:27-04

(KGTV) One of the biggest city-owned office spaces sits vacant and may do so for a little while longer.

The City of San Diego acquired the 19-story tower at 101 Ash St. in the beginning of last year in effort to consolidate staff into a new space, but various delays have kept the renovation from being completed.

Officials signed a lease-to-own contract for the old Sempra Energy building and have been paying more $535,000 a month plus operational costs since January of 2017.

The city was supposed to move in July 2017 and the estimated daily cost for the vacant structure is a little less than $18,000.

“I do believe the city has bungled this decision from the beginning starting with the purchase,” said San Diego City Councilmember Barbara Bry.

Bry was elected to council after officials voted to acquire the building for $72 million and says the issue can be traced to how city staff briefed council just before the purchase.

“At the time city staff told the council that the building was in excellent shape and the $5 million in tenant improvements was enough,” added Bry.

Records indicate the city has paid more than $9 million in rent and roughly $4 million in operating costs since taking over the property.

Bry is working behind the scenes to mitigate the matter before the costs balloon any more, but estimates it will be at least six months until staff can move into the 101 Ash Street building.

The City of San Diego says more than 1,100 employees will work there when the renovation is complete and they plan to move into the building sometime in fiscal year 2019 — which begins in July.