California lawmakers mull what to do with long-troubled tax board building downtown

jortiz@sacbee.comAugust 21, 2013 

California lawmakers weren't able to resolve the ongoing – and soggy – saga of the Board of Equalization headquarters on Tuesday but learned that public and private leaders have a keen interest in the outcome.

For the better part of the last decade, about 4,000 employees at the 450 N Street office tower in downtown Sacramento have been working in a virtual construction zone as the state performed an extended series of repairs.

The 20-year-old, 24-story building has become California's state government money pit – with windows popping out and crashing to the street below and mold invading the walls – among other problems. The cost of past and planned repairs is approaching the $81 million the state paid for the structure in 2006.

As the Assembly budget subcommittee heard the grim tale on Tuesday, Assemblyman Roger Dickinson, the Sacramento Democrat whose district includes the building, posed a question: "What's the point at which we're throwing good money after bad?"

Tamekia Robinson, a board employees and a vice president for SEIU Local 1000, told the subcommittee that her coworkers are frustrated.

"They don't understand how the building can have all these issues and yet they can't get out of it," she said. "Ten years and they don't see an end in sight."

Tax board Deputy Director Liz Houser, meanwhile, said the agency has outgrown the 463,000-square-foot building and made a case for moving employees to a different facility. The agency, she said, would be more efficient if it could put all its employees in one facility instead of splitting them.

Officials with the Department of General Services haven't been too eager to clear the building. As the state's landlord, the department would have to find new tenants because the state uses the lease money to pay down bond debt on the building – at least $69 million.

Prospective tenants would know, of course, that the tower has suffered toxic mold infestation, leaky windows, burst water pipes, corroded solid waste drain lines, falling exterior panels and unreliable elevators that trapped occupants inside.

Despite assurances by General Services that the building's air is safe, more than 50 employees have filed workers' compensation claims related to building issues, Houser said, and the board spends about $1 million per year on building-related litigation.

In a report to the subcommittee, General Services officials suggested about a dozen state departments and agencies that could move in and consolidate operations if the board left, including Caltrans, the Department of Corrections and Rehabilitation – and General Services itself. Timing issues make the list highly "speculative," according to the report.

Even if all parties agreed on a plan, emptying the building and then filling it back up would take years. New construction for board employees would take at least five years, according to DGS estimates, after lawmakers approved the money to lease a custom space or build one. Then the state would have to repair and update the empty N Street building. That would take up to two years.

Still, some at Tuesday's hearing saw potential benefit in the state's plight.

Sacramento businessman Scott Syphax pitched his Township 9 development near the Sacramento railyard as a site for a new board headquarters. "We're very much interested in moving this process forward," he told the Assembly panel.

Elk Grove Mayor Gary Davis noted that 24,000 state workers live and play in his suburban city but commute daily to work in Rancho Cordova and Sacramento.

"We will literally pay the state of California to come to Elk Grove," he said. "You're going to have responsive bids from all over the region. From our city alone, you'll probably get at least three."

Call The Bee's Jon Ortiz, (916) 321-1043. Follow him on Twitter @thestateworker and read his blog, The State Worker.

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