Cost to move city agencies out of Hall of Justice going up

Office space leases part of long term replacement plans that include land purchase next to courthouse

The cost of moving city agencies out of the seismically unsound Hall of Justice into rented office space has increased by millions of dollars.

New cost estimates for tenant improvements and furnishings for planned new office spaces for the District Attorney’s Office and Adult Probation Department were made public ahead of a Board of Supervisors Budget and Finance Committee hearring Wednesday on whether to release $13.3 million placed on reserve for the Hall of Justice relocation projects.

The board approved the two separate leases for the District Attorney’s Office and Adult Probation in 2017 and 2018, but was given much lower estimates for tenant improvements at the time.

For the leased 98,000 square feet at 350 Rhode Island St,. slated to become the District Attorney’s new office space, costs for the already-underway tenant improvements have soared by more than 60 percent, for a total of $84 per square foot, or $8.2 million, according to the budget analyst report. Initially, The City was going to pay $20 per square foot for tenant improvements and the landlord $80. The landlord is still paying $80 for their share.

The cost hike is attributable to a more detailed analysis of the needed work that involves a “reconfiguration of the existing commercial kitchen space to be used by the District Attorney’s Office as office space, construction of storage space, and installation of plumbing and electricity that meet LEED v4 requirements,” said the report based on an interview with Heather Green, the capital planning director with the City Administrator’s Office.

The costs for furniture, fixtures and equipment are also coming in higher than anticipated. Initially the board was given an estimate at $10 per square foot, or $1.25 million but that is now 3.5 times higher at $3.9 million.

The increase is to accomodate “new furniture and equipment for all employees to conform to LEED Gold v4 standards, as required by the Environment Code,” according to Green in the report.

Cost increases aren’t the only challenge at this site. The City was planning to use additional space at the site 350 Rhode Island to relocate the Police Investigations Unit out of the Hall of Justice as well, but other tenants at the building are not willing to vacate the premises and The City is now looking to move the unit elsewhere, possibly to 777 Brannan St., another city-leased space, which was previously approved to move the Police Department staff and evidence storage from the Hall of Justice.

Despite the cost hike, the plan is for the District Attorney’s Ofice to move in this spring, finishing in the summer.

The board approved the lease for the space in October 2017, which included a base rent at $4.3 million for an initial 15-years with Lexington Lion San Francisco LP.

There is a similar cost-increase for the lease at 945 Bryant St. for the Adult Probation Department, where the 20-year lease comes with a base rent of $1.76 million with landlord Bridgeton 945 Bryant Fee LLC.

“The budget for tenant improvements has increased more than fivefold to $6.9 milllion,” the report said “According to Ms. Green, more intensive tenant improvements than originally estimated are necessary to meet Adult Probation Department programming, safety, and security requirements. Examples of the additional tenant improvements include construction of 14 interview rooms, a secure firearm storage area, and a secure evidence storage room.”

Complete cost estimates for 945 Bryant St. are not yet finalized, according to the report. The 158-person Adult Probation Department staff is expected to move into that property later this year.

City to buy land next to Hall of Justice

In addition to lease increases, the future of the Hall of Justice is expected to come under discussion Wednesday when the committee is also voting on The City’s proposed 10-year capital plan that includes the Hall of Justice project.

As part of that project, The City is advancing plans to purchase the former McDonald’s site next to the Hall of Justice “in order to facilitate the replacement of the Hall of Justice through relocation of certain as-yet identified elements of existing occupancy,” according to Capital Planning Committee documents. Departments who entered leases to leave the Hall of Justice, like the District Attorney’s Office, potentially could relocate to the new replacement building.

Mayor London Breed is expected to introduce a financing plan next week totalling $16 million in certificates of participation to purchase that site.

The City had previously considered purchasing the site to build a new jail to replace one in the Hall of Justice that city officials say must be shut down for health and safety reasons. However advocates and the Board of Supervisors rejected the new jail plan in December 2015 and the purchase did not move forward.

The capital plan calls for The City to borrow $55 million for demolition of the Hall of Justice in fiscal year 2025 and includes $417 million for a “replacement Hall of Justice Consolidation Project” in fiscal year 2028.

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