Money pit: 19-story downtown San Diego building turns into $26 million bill

Posted at 6:07 PM, May 23, 2018
and last updated 2018-05-23 21:07:01-04

SAN DIEGO (KGTV) - Wednesday, a San Diego City Council Infrastructure Committee was briefed on the progress of a downtown building that’s presently costing taxpayers millions and may end up costing tens of millions more.

The 19-story building at 101 Ash Street was supposed to be about saving taxpayers money and improving communication among city employees. But some council members say it’s becoming a symbol for just the opposite.

"What people need to remember is this is tax-payer money," says Councilman David Alvarez. "That could be used for a thousand different projects like streets and sidewalks."

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The building was acquired by the city in 2016 for $72 million to allow the city to avoid future increases in rent anticipated downtown.

A city staff report estimated renovation costs to make the building move-in ready at $5 million. The report also projected long-term savings for the city of more than $40 million.

"We were given maps, we were given spreadsheets on the savings," says Alvarez.

Flipping through a staff report, Alvarez says the projections were laid out in detail and signed by the city’s real estate department and chief operating officer. On Wednesday, many of the people behind the report attended a committee hearing to explain how a $5 million bill became $26 million.

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In pre-meeting statements shared by Councilwoman Barbara Bry, the staff pointed to discoveries of problems with the plumbing, air conditioning, and electricity that would need attention on all 19 floors.

Information Alvarez says he would have liked up front before the building was purchased. He says his goal now is to get to the bottom of the misinformation and try to stem the ongoing expenditures.

"How do we move quickly to stop the bleeding. In that, the taxpayers aren’t continuing to be on the hook for an empty building."

Ultimately, the committee voted to support appropriations of $18.2 million to $30 million to support the new budget adjustments. Councilman Alvarez was the only dissenting vote.