Council took very little time to approve quite a lot of money for a new City Services Building (CSB) adjacent to the current City Hall.
At their Aug. 8 meeting, Council took about 25 minutes to approve bonds worth $76,760,000 to fund a new 50,000 square foot building that will hold about 240 current city employees. The building includes three stories plus a basement, with 45 feet above grade. It will set behind the current City Hall and in front of the Public Safety building.
The City has spent years planning for a new facility that will allow it to reduce the quantity of rented office space throughout the city.
“City Hall was constructed in 1938 and in 79 years, the services that the City provides to the community has expanded and outgrown the historic building. For several decades, city divisions have been spread throughout the downtown, leasing space. With the construction of the City Services Building (CSB), the City will eliminate leases saving as much as $10 million annually and bring 240 staff under one roof,” said the staff report.
According to staff, the savings on rent will offset the cost associated with the bonds.
“The total project budget for the CSB is $74,804,729. This budget has not changed since coming before Council in November 2016. The difference between the bonding amount and the project budget includes two things: (1) art contributions to the building in the amount of $760,000 and (2) contingency funds covering changes up to $1,195,271 for such items as additional electric vehicle charging infrastructure and bike infrastructure,” said Santa Monica Spokeswoman Constance Farrell in a statement.
In approving the financing, Councilwoman Sue Himmelrich asked for assurances that costs would not increase.
“I made a joke in an email to all of you today that this is starting to feel like the money pit, that movie, but really what I want to talk about is how we can make sure that we stay within our budget now,” she said.
Public Works Director Susan Cline said the proposal before council sets a maximum price for the building based on design requirements provided by the city and cost estimates developed by the construction company. Unless the city altered the scope of work in the contract, all cost overruns would be paid for by the contractor. According to Cline the bond amount will cover the current plans.
“The City will get the City Services Building delivered consistent with the design,” she said.
A five-member council (Mayor Ted Winterer and Councilwoman Pam O’Connor were absent) approved a maximum construction services agreement of $70,600,507 ($61,843,526 Guaranteed Maximum Price, with a 2.4% contingency) with Hathaway Dinwiddie Construction Company and an $887,920 construction management services agreement with GKK Works. Construction is set to begin in September of this year and the building is aiming for extensive environmental benefits including generating all electricity and water on site.
The sustainability efforts actually impact the financing for the project.
“The bonds carry a “Green Bond” designation due to the strong environmental qualities of the CSB as a “Living Building”, the highest green building standard available. The credit rating agencies – Fitch Ratings, Moody’s Investors Service, and Standard & Poors – each assigned their highest possible lease revenue bond ratings to the bonds (AA+, Aa1, and AA+, respectively), and affirmed the City’s AAA general obligation bond credit ratings,” said Farrell in her statement.