Downtown Sacramento office boom back on track after Newsom paused funding

Plans to renovate three California state government buildings in Sacramento are back on after Gov. Gavin Newsom paused them last year to save money.

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 three buildings will cost about $766 million to design and build, according to budget proposals for the fiscal year that starts in July.

That’s up from a projection of $721 million in last year’s budget, when Newsom, anticipating a $54 billion budget deficit, paused the projects.

Instead of a deficit, California entered 2021 on track to accumulate a $15 billion surplus after tax revenues came in higher than anticipated amid the ongoing coronavirus pandemic.

The buildings were part of pre-pandemic plans to spend more than $3 billion over the next few years building and renovating seven outdated state office buildings.

The projects involve permanently relocating departments from old buildings to newly renovated ones in a process that has been likened to a giant domino game. The buildings have varying degrees of historical protection, in some cases requiring more extensive reviews and more preservation processes, according to DGS proposals.

The latest proposals from the Department of General Services push back projected completion dates for each project by up to a year.

Most state government employees who normally work in offices have been working from home since shortly after the pandemic arrived last spring.

Newsom has ordered state departments to look for savings by offering telework permanently, including by reducing leased spaces. The change in direction doesn’t show up in budget proposals for the Bateson, Unruh or Resources buildings.

Work on the 1981 Bateson building — which now houses the Health and Human Services Agency, Department of Developmental Services and Department of State Hospitals — will start in September rather than this spring as previously planned.

It is scheduled to be finished in November 2024, according to a DGS proposal. When finished, the Bateson building will host some of the departments within the California Natural Resources Agency. It will cost about $192 million to design and build, according to DGS.

A renovation of the 1929 Unruh building is scheduled to start in January 2022 rather than this fall, and is now scheduled to be finished in January 2025.

Most of the building is used to house the State Treasurer’s Office, and the office will remain there after renovations, according to DGS’ proposal.

The Government Operations Agency, the State Transportation Agency and the Business, Consumer Services and Housing Agency will not return to the building following renovation, according to the proposal.

It is expected cost $122 million to design and build.

The 1964 Natural Resources building ranked No. 1 in a 2015 list of state buildings most in need of renovation or repair. A new timeline calls for work to start in November and to be finished in November 2024, according to a proposal.

The Employment Development Department will move in when it’s finished. The project is expected to cost about $452 million.

Other state government buildings that remain on track are the Clifford L. Allenby building at 1215 O St., where new employees are scheduled to start moving in this month, and the new Natural Resources Headquarters building on the block bordered by 7th, 8th, O and P streets. The new Natural Resources Agency headquarters is scheduled to open in August.

The Allenby building will accommodate the California Health and Human Services Agency, the Department of State Hospitals and the Department of Developmental Services, according to a DGS proposal.

The new Natural Resources building will accommodate employees from the Natural Resources Agency.

This story was originally published February 10, 2021 at 5:00 AM.