More than five years ago, San Diego officials declared an emergency and signed a no-bid contract to repair the elevators that serve the Civic Center Plaza, a mid-century office tower that houses more than 800 city employees.
But the job is still not finished, and it’s costing far more than initially expected.
City Council members quietly approved a contract extension with the Otis Elevator Co. this past week, an amendment that added not only a year to the completion date but $1 million to the original $3 million budget.
The request passed unanimously on what’s called the consent agenda, meaning it was approved on a combined vote without any public debate. No elected officials asked what had prompted the delay or why the cost keeps climbing.
According to the staff report presented to council members before their vote, city real estate officials were told in the fall of 2019 that the condition of the elevators inside the high-rise at 1200 Third Ave. posed a serious safety risk to San Diego workers.
The Engineering and Capital Projects Department declared the situation an emergency and recommended an immediate fix. By December of that year, the city signed the no-bid agreement with Otis to complete the repairs by 2022.
But the work ran into a series of problems, including asbestos and COVID-19, according to the staff report to council last week.
“This action will allow time for the completion of the remaining work,” the report said. “The additional time includes final as-built redlines, and other close out activities.”
But what the report does not say is that city officials identified the elevators as needing to be upgraded more than 10 years ago. And according to a 2014 building assessment, the repairs would have cost $1.8 million.
An aide to Mayor Todd Gloria said the project ran into other problems besides the asbestos and the pandemic, including the installation of a new HVAC system. An opening also had to be created in the side of the electrical room to allow the new equipment to be passed through, spokesperson Nicole Darling said by email.
“Finally, during installation of new sensors it was discovered that the existing elevator doors contained asbestos and could not be abated, so full replacement of all elevator doors will be required,” she added. “Fabrication of the new doors have added to the delay.”
One of the documents provided to the council as background information was a September 2019 memo that James Nagelvoort, then the city’s public works director, sent to Cybele Thompson, then the city’s real estate assets director.
The two-page letter from Nagelvoort includes an anecdote about a pregnant woman who was trapped in a broken elevator for nearly half an hour three weeks earlier. It also notes that a city legal opinion dictated the work be managed by Public Works rather than the building’s property manager.
The Mayor’s Office did not respond to questions about why the repair job was designated a capital improvement project, or whether that decision exacerbated delays and increased costs.
The San Diego Union-Tribune obtained a copy of the formal Facility Condition Assessment produced for the property in 2014 and other documents that were not included in the materials submitted to council members last week.
The 135-page assessment was produced a year before the City Council entered a 20-year lease-to-own agreement for the office tower, which houses many of the city’s most important departments.
It concludes that the building was in generally good condition. The advisers did issue a series of proposed maintenance projects and recommended improvements to be completed over coming years, including elevator upgrades.
“The elevators are original components but received modernization in 1994,” the analysis by Alpha Facilities Solutions says. “Overall, the elevators are in good condition, but plans for additional modernization are recommended over the next five years.”
At the time, the city was negotiating to purchase the building because its longtime owners wanted to sell and the city had been the sole tenant for decades.
In 2015, under a recommendation from real estate adviser Jason Hughes, the city entered its lease-to-own arrangement for the property. The deal had the city paying $313,000 per month for two decades — some $75 million — even though it had been appraised at about $45 million.
Years later, Hughes pleaded guilty to a criminal conflict-of-interest charge for collecting a $5 million fee from the sale while representing the city in the transaction. He was sentenced to one year of probation, paid a $400 fine and had to return the $5 million, along with $4.4 million he collected from a similar deal for 101 Ash St.
Months earlier, the City Council approved a recommendation from Gloria to buy out the Civic Center Plaza lease for $46 million in cash. At the same time, the city also paid off the 101 Ash St. lease for $86 million.
A separate memo from 2017 obtained by the Union-Tribune lays out plans to modernize the six elevators in the high-rise at a cost of just under $2.2 million.
That repair job would have replaced most of the equipment serving the six elevators, including controllers, motor drives, door operators, signals and wiring. It also included refurbishing the car frames and platforms, interiors, entrance doors and other equipment.
The upgrade, which would have added up to 25 years of service life of the elevators, was not undertaken even though the consultant advised the work be done.
“A strong effort to properly maintain vertical transportation equipment greatly increases the remaining useful life,” HKA Elevator Consulting of Laguna Hills wrote. “Likewise, poorly maintained equipment will reduce the remaining useful life of the equipment.”
In November 2018, then-City Attorney Mara Elliott reported that one of the elevators servicing her office “felt like it dropped while she was riding in it,” according to another memo obtained by the Union-Tribune.
The property manager, real estate giant CBRE, immediately took the elevator out of service and brought in Otis to begin repairs, the memo said.
“The CCP (Civic Center Plaza) elevators are scheduled to be modernized as follows (similar to what is happening to the Parkade elevators right now): 3 in FY20 for an estimated $1.25M and 3 in FY21 for an estimated $1.25M,” the document says.
Michael Zucchet, the former City Council member who now represents thousands of white-collar workers as general manager of the San Diego Municipal Employees Association, said he is not surprised the work is taking so long.
“There is asbestos involved/ implicated in the elevator improvements, so the work can only be done in 24-hour chunks when there are no other employees in the building,” he said in a text message. But “the city’s public works/ facilities functions remain understaffed and overextended, so I wouldn’t be shocked if there were timing issues there.”
Under the amendment approved by the council last week, the elevator repair work is due to be completed by December.
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