Dual construction projects, touted by Citrus Heights officials as the largest public-private investment in the city’s history, are expected to break ground by late summer.
The City Council voted unanimously Thursday night to vacate its current civic center site at Greenback Lane and Fountain Square Drive to make way for a three-story medical office building for Dignity Health. The council also voted to build a new city hall on a 10.9-acre parcel down the street at Fountain Square Drive and Stock Ranch Road.
Brian Ivie, president and CEO of Dignity Health’s Mercy San Juan Medical Center, said construction of the 67,727-square-foot medical office building is expected to begin in September with demolition of the current civic center buildings, once home to Fountain Square Nursery. The new building is expected to be completed within 18 months.
Monica Alejandrez, assistant to the city manager, said construction of the new city hall likely will begin in July or August, and is expected to be completed within 14 months. City offices will be temporarily relocated until the new city hall is built. Alejandrez said several buildings are available within the city and an effort will be made to house all employees at one site.
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The project, one of the most divisive since the city incorporated in 1997, continued to draw opposition from various quarters during a public hearing Thursday night. Norman Hill a spokesman for the group Preserve Our Civic Center, said following the council vote that the organization is prepared to file a lawsuit over the adequacy of the environmental study for the project.
But after 18 months of community meetings and two major modifications to the project, City Council members said they believed the latest proposal alleviated concerns of many earlier opponents by keeping city hall, the Police Department and community center at a central location.
They also said that the deal with Dignity Health, which would provide a source of revenue for a new city hall while bringing a non-retail business to the community, was too good to pass up. Citrus Heights has limited opportunity for growth, so “we have to think outside the box about how to get businesses to want to come to the city,” said Mayor Sue Frost.
“Walking away from this deal, or further delay, will cost this community dearly,” said Councilman Steve Miller. “I don’t know that this opportunity would present itself again.”
Under the plan approved by the council, all buildings on the current civic center site, except the Police Department headquarters, will be demolished and replaced with a $31.2 million three-story medical office building to be constructed for Dignity Health by Panattoni Development Co. Under terms of the ground lease, Dignity Health will pay $6.9 million to the city over 15 years, with the option to purchase the property for $1 at the end of that period.
The lease revenue, city officials say, will go toward constructing the new city hall building on a parcel owned by Rancho Cordova-based Capital Partners Development Co., which will construct the 35,000-square-foot, $22 million city hall building.
Following execution of a ground lease with Capital Partners, the city will make lease payments totaling $7.6 million. Once the building is constructed and occupied, the city will have the option to purchase it from Capital Partners for $14.4 million or make lease payments over a 30-year term.
With lease payments from Dignity Health, and estimated savings in maintenance and operations costs, $8.9 million in general fund money will go toward construction of the new city hall, city officials said.
Opponents generally agreed that the project approved by the council Thursday is an improvement over two earlier versions. The first had called for both the medical office building and a new city hall to be constructed on the civic center site, and the second would have relocated city hall to a city-owned parcel on Antelope Road, in a largely residential area.
Concerns remained about noise and traffic that many believe will be generated by the medical office building, as well as its height. Members of Preserve Our Civic Center urged a compromise, recommending that the building be reduced to two stories, its footprint expanded and moved farther back from Greenback Lane to lessen the visual impact on Greenback Lane and nearby residential areas. But Dignity Health officials said a two-story structure would affect functional aspects of the building and would not allow for the required number of parking spaces.
Call The Bee’s Cathy Locke, (916) 321-5287.