Gov. Newsom wants to pause 3 major downtown Sacramento office projects due to deficit

Faced with a state budget deficit, Gov. Gavin Newsom on Thursday proposed “pausing” three-quarters of a billion dollars worth of renovation work planned for three aging state buildings in downtown Sacramento.

They are the Resources Building at Ninth and O streets, the Gregory Bateson building at Ninth and P streets, and the Jesse Unruh building on Capitol Mall.

The governor’s office did not say how long the remodel projects might be postponed, but noted in its May revise budget summary that the proposal was being made due to coronavirus-deficits “absent additional federal (stimulus) funds.”

The proposal also appears to represent a coronavirus-era rethink of how much office space state agencies need.

“With an increased remote workforce, the administration ... will evaluate the state’s real estate portfolio to determine which agencies and departments may be able to reduce lease space,” Newsom’s budget summary read. “Agencies and departments may be able to reconfigure their workspace to include additional meeting rooms and hoteling space, thereby reducing their lease footprint.

“Reducing space will decrease not only lease costs, but also energy costs. Additionally, (the Department of General Services) will look for possible restacking opportunities in state-owned buildings.”

The summary did not address the question of remodeling offices to create more distance between work stations to reduce spread of viral infections.

The 56-year-old resources building has been scheduled for a remodel after completion of a new Natural Resources building between Seventh, Eighth, O and P Streets. That project, one of the largest state construction projects in Sacramento in decades, is scheduled to be finished by summer 2021.

The 40-year-old Gregory Bateseon building at 1600 Ninth Street has been slated for major remodeling and repairs, as has the historic Jesse Unruh building at 915 Capitol Mall, which was first occupied in 1929.

In total, the shelving of the projects would postpone expected state payments of $721.7 million.

“These projects will be paused until a statewide evaluation of office space needs has been completed,” the governor’s team wrote in the budget summary.