Orange County supervisors are scheduled Tuesday to move forward with the county government’s first new Civic Center building in decades, a $315-million proposal to replace a long-empty building across from Santa Ana City Hall.
Supervisors, without discussion, last month unanimously approved the environmental impact report for the new Building 16 and also voted to bring the $315 million financing package up for approval Tuesday.
The six-story, 251,000 square foot office building on Ross Street will have 350 underground parking spaces, according to a county staff report. It says the building will host “a one-stop public counter,” offices for Public Works, Waste and Recycling, and Treasurer-Tax Collector, and a 6,600 square foot event and conference center.
The new building is the first in a massive 20-year overhaul of the Civic Center, under a master plan largely developed behind closed doors by an ad-hoc committee of supervisors Andrew Do and Shawn Nelson. Construction will be managed by Griffin Structures Inc., which is the primary consultant to supervisors on the master plan.
It’s believed to be the first new county building at the Civic Center since 1994. Most of the county’s Civic Center buildings are about 50 years old, according to county staff.
County officials say carrying out the Civic Center plan will involve the most borrowing the county has done since its infamous 1994 bankruptcy.
What the new building will look like apparently will be a secret until after its design is finalized by supervisors.
“The County will share information and renderings once the Board approves the project and all plans are finalized,” county spokeswoman Carrie Braun said in a statement. That approval is expected this fall at the latest, she said.
It’s unclear whether the supervisors will seek public input on the design.
Up for supervisors’ approval Tuesday is an ordinance that raises the money for the project by issuing $158 million in bonds that taxpayers would spend $315 million to pay off over the next three decades. The ordinance also would authorize the creation of a county-controlled nonprofit corporation to issue the bonds, oversee the construction, and lease the building to the county.
That nonprofit entity, the Capital Facilities Development Corporation, also would finance and oversee future Civic Center buildings. It would be controlled by a board of three county officials: the CEO, public works director, and chief real estate officer.
The former Building 16 has already been mostly demolished, with crews now digging underground at the site.
While no design has been made public, visuals do apparently already exist internally at the county. Auditor-Controller Eric Woolery said he’s been provided pictures of the design and what a typical floor will look like.
And, Woolery said, he likes what he sees in the floor plan, which he said will be very open with lots of light.
“I think employees [will] have a much more positive work area than they probably currently have,” said Woolery, whose employees work in a large concrete building that resembles a bunker. The change could help boost employee morale, he said.
Another county elected official, meanwhile, has turned down an offer to have his staff move in.
“It’s no secret, I said I’m not going into the new building,” Assessor Claude Parrish said in an interview. The reason, he said, is because of the “wide open spaces” on floors with cubicles where people could overhear employees’ “confidential conversations with taxpayers.”
He also questioned the price tag.
The $158 million in bonds “seems like an awful lot considering the number of square feet,” said Parrish, whose agency is in charge of determining the market value of real estate in Orange County for tax purposes.
County CEO Frank Kim’s office said the cost is reasonable.
“Total costs for this building are not limited to just construction,” Braun wrote in her statement.
“They include the physical building including a one-stop annex and event center, underground parking, moving costs for the departments that will occupy the building once completed, office furniture and fixtures…costs for the [environmental impact report] for the entire Civic Center Master Plan, and costs for offsite infrastructure like roadway and utilities improvements.
“Construction costs for the building are not high for a building this day in age, especially when all contractors involved are being paid prevailing wages.”
Braun also said taxpayers will benefit from the county’s hiring of “an expert developer, in this case Griffin, who has built numerous public buildings.
“They bring the expertise to ensure the building comes in on time for a fair price. The developer manages the whole construction program and ensures that all aspects of the project are coordinated,” Braun wrote.
As for why the project is structured in this way – in which the county leases its land to a new organization it creates, which issues bonds for construction and then leases the building to the county – officials say it will help maintain the county’s credit rating.
“With a [public-private partnership], the County doesn’t have to issue debt or have a large sum of money up front. This allows the County to maintain our credit rating,” Braun wrote in her statement.
This structure, she said, is what the county used for its current headquarters for the Sheriff’s Department and Public Works – formally known as the Gates and Osborne buildings, respectively – both of which are on Flower Street in Santa Ana.
The county will also own Building 16 at the end of the 30-year lease term, Braun added.
Woolery, who audits the county’s finances, said the $158 million bond debt will be listed on the county’s financial books.
Overall, taxpayers will be paying an estimated $157 million in interest over 30 years – and as much as $195 million – to borrow the $158 million in bonds, according to county records. Bond holders are estimated to earn interest of 4.05 percent per year – or about $6.4 million annually. But it could be as high as 5.75 percent, according to county records.
The bond underwriter will also receive an amount – known as a “discount” – equal to no more than 1 percent of the bond principal, or about $1.58 million. The estimated actual cost for the bond issuance is about $1.26 million.
The second, and final, approval of the financing ordinance is expected at the May 23 supervisors’ meeting.
A new Hall of Administration to house the county Board of Supervisors will be built later in the Civic Center Master Plan, Braun said.
Nick Gerda covers county government and Santa Ana for Voice of OC. You can contact him at [email protected].