California risks embarking on a flawed and potentially costly Sacramento-area state office building strategy, the Legislature’s nonpartisan fiscal analyst warned in a report Tuesday, calling for more legislative scrutiny of the estimated $3 billion effort.
The Brown administration earlier this year compiled a plan to renovate or replace 11 state office buildings in poor or fair condition, mostly in downtown Sacramento. In June, the Legislature and Gov. Jerry Brown reached a budget deal that included a major first step: allocating $1.3 billion to pay for three new or renovated state office buildings, including the Capitol Annex.
In a report Tuesday, though, the Legislative Analyst’s Office said the administration’s strategy and ambitious timeline are short on detail and other options that might work better. Last June’s budget agreement, moreover, limits how much control lawmakers have over how the money gets spent – an approach the Legislature should avoid repeating if it gets requests for more money, the report said.
“We strongly encourage the Legislature to provide clear direction to the administration that it expects more complete information and a robust analysis to justify any future project or funding proposals,” the report said.
There already are signs that the state office buildings covered in the budget pact will turn out to be more expensive than earlier estimates, according to the analyst’s report.
The new resources building at Eighth and P streets and another new office building at 12th and O streets included in the state budget could cost up to $1,000 a square foot. That is more than double the estimated cost of $400 to $500 per square foot of building a high-rise in downtown Sacramento.
Officials initially leaned toward building a new resources building, now at Ninth and N streets, on private property. The latest thinking is to put it on state property due southwest of the current building, a change state officials say will cost $70 million because of a longer construction timeline and additional project management costs. No decision has been made.
Brian Ferguson, a spokesman for the state Department of General Services, said the administration will work closely with lawmakers and the analyst’s office to “ensure the highest possible degree of transparency and accountability in how these projects are executed.”
Tuesday’s report includes little discussion of the Capitol Annex, which is not formally part of the administration’s 11-building strategy.
Housing the governor, the lieutenant governor, most of the 120 lawmakers, and 1,400 legislative and executive branch staff, the annex is a destination for more than 1 million tourists, lobbyists and others per year, according to state estimates. Yet the building is overcrowded, lacks fire sprinklers, and contains hazardous materials.
The annex project is covered by a separate process that requires the governor and Legislature to work together. There has been no decision on whether to replace or renovate the building.