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City of San Bernardino
Study Session Meeting
Informational Report
Date: January 31, 2024
From: Charles A. Montoya, City Manager
Department: City Manager’s Office
Subject: City Hall Renovation Project (Ward 1)
Executive Summary
The informational report will provide an overview of the City Hall Renovation Project, the site history spanning from the engagement of Cesar Pelli and Norma Sklarek to engaging Pelli Clarke & Partners for technical and historic Guidance, overview of the seismic retrofit and renovation assessments, the design build process, and financing the project.
Background
San Bernardino City Hall was one of the focal points of the 93-acre urban renewal Central City Project that encompassed the old Central Business District. The City Hall building would be at the center of an 11-acre block that was to serve as a civic and cultural center, which would connect to the mall site by a pedestrian bridge. In 1969, the design contract for City Hall was awarded to Gruen and Associates, where notable architect Cesar Pelli would be the lead partner of the firm in charge of the design. Also at Gruen and Associates was Norma Sklarek, the first African American woman in the country to become a licensed architect. Sklarek served as the director of architecture at Gruen and Associates and was responsible for coordinating the technical aspects of major projects, including the San Bernardino City Hall.
Completed in 1972, the design of City Hall was meant to engender civic pride and reflect the urban environment around it. The ground floor of City Hall was designed by Pelli to be an homage to Venice-based Light and Space artist Larry Bell, who conducted experiments of perceptual transparency through multiple glass cube sculptures. The building’s unique design has been featured in numerous magazines, including Progressive Architecture, calling it one of the best city halls in California. It was named one of the 49 most outstanding city halls in the United States by the American Institute of Architects (AIA) and Library of Congress in 1982.
The City Hall building consists of 6 floors, plus a mezzanine floor and basement, and offers approximately 115,000 sq. ft of office space. It is constructed with lightweight 1 8
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concrete slabs, beams, and columns, and is an example of non-ductile concrete construction. While non-ductile concrete construction was permitted under the 1968 uniform building code (UBC), it would later be prohibited under the 1973 UBC as a result of the 1971 San Fernando earthquake (Sylmar earthquake). Structures of this type exhibited poor performance during the Sylmar earthquake, suffering significant structural damage and/or failure. This even occurred in newly constructed buildings at the time, such as the Olive View Hospital, which had only opened six (6) weeks prior to the earthquake.
In 2007, URS Corporation was retained by the City to perform a seismic evaluation of City Hall, which concluded that the building needed seismic retrofitting. URS’ evaluation identified four areas of concern, which would require a more detailed evaluation for identification of risk and potential remedial strengthening:
1. The tall first story columns are much more flexible and weaker than the columns of the stories above. This causes a weak and soft first story that has been responsible for many cases of seismic collapse.
2. The flexural resistance of the concrete frames is very low compared to present day standards. This is especially significant as the severity of the expected seismic ground motion at the site is higher than a “typical” California site.
3. The structure, including the non-ductile moment frame lateral force resisting system, uses lightweight concrete. This is especially significant because of poor performance during past earthquakes of very similarly constructed, non-ductile moment frame buildings.
4. The beam-column joints lack shear reinforcement. A detailed structural analysis is required to establish the extent of the building’s seismic deficiencies, the potential remedial measures that would be required to reinforce the building, and the estimated construction costs. In order to achieve a more reliable estimate of the total extent of rehabilitation work that will be needed, the architectural and mechanical, electrical, and plumbing (MEP) engineering issues of the building will also need to be assessed.
URS’ assessment considered several seismic retrofit options that would reduce City Hall’s vulnerability to earthquakes and provide for collapse prevention and life safety. In 2007, it was estimated that these retrofit measures would cost between $12 million and $15 million.
In 2015, IDS Group was retained by the City to perform a seismic evaluation of City Hall, which included the use of computer models to identify deficiencies and develop seismic retrofit designs. While the report does not explicitly state the magnitude of earthquake 1 8
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required to cause structural failure, it discusses City Hall’s close proximity to both the San Jacinto and San Andreas fault zones, noting they are capable of producing earthquakes between 6.5 and 8.0 in magnitude. It’s also important to note that it is the acceleration forces that the structure can withstand during an earthquake that determines whether or not it will experience damage or failure; and while acceleration increases with earthquake magnitude, it decreases with distance and depth at a rate that is dependent on the type of rock/soil. In their report, IDS Group identified the following key deficiencies:
1. The use of non-ductile moment frames of insufficient strength as the primary means of lateral resistance.
2. A soft/weak first story.
3. Torsional irregularity and building drift in excess of 2% of story height, which can lead to column instability and collapse.
4. Inadequate anchorage and bracing of nonstructural systems (such as interior walls, ceilings, and MEP systems). Damage to nonstructural systems could consist of collapsed ceiling systems, falling hazards due to failure of piping, conduit and ductwork supports and impact damage to adjacent systems, and falling/toppling hazards associated with desktop items and furnishings.
5. Lack of Redundancy. The building consists of 18 columns at each level. These columns carry the entire gravity loads as well as seismic loads. Along the transverse direction there are only two columns at each gird-line. Failure of a single column will have devastating results since there is little room for load redistribution.
IDS Group noted that the configuration and design of the building poses challenges for retrofitting the building. An interior solution will preserve the unique exterior architecture but involves significant renovation and disruption of the interior, whereas an exterior solution will significantly change the appearance of the building. In 2016, IDS estimated that a retrofit would cost approximately $14 million; however, they cautioned that this figure could halve, or double once complete designs are prepared and all possible costs are factored in. Additionally, IDS Group estimated that final designs could take approximately 9-12 months to complete, and actual construction could take at least an additional 12 months following the permitting and bid phases.
In April 2016, City staff began identifying buildings to relocate staff and elected officials.
Then, following increased seismic activity detected in the Salton Sea area, which raised the possibility of a major earthquake occurring, City Manager Mark Scott concluded that an emergency relocation was necessary and directed staff to find leased space as quickly as practicable. On November 21, 2016, Mr. Scott recommended vacating City Hall, stating that the building was a seismic risk based on the two prior independent 1 8
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evaluations, and recommended relocating to Vanir Tower, which had the following advantages:
•Close proximity to City Hall and direct access to the parking structure. •Readily available, adaptable, and competitively priced office space. •Fiber optic connectivity that could accommodate the City’s IT infrastructure needs. •A building structure that was seismically safe based on prior seismic assessments that were required by the County of San Bernardino and Internal Revenue Service.
On June 6, 2018, the Mayor and City Council approved an agreement with CannonDesign to perform a Facilities Condition Assessment (FCA) for 185 City-owned facilities, with the City Hall building being assessed first. The assessment included:
•Seismic and structural elements.
•Mechanical components, such as HVAC systems and elevators. •Plumbing and fire protection systems.
•ADA compliance.
•Environment issues.
The CannonDesign’s FCA report identified critical deficiencies in all categories listed above and estimated approximately $22 million in renovation costs, $2.2 million in ADA improvement costs, and $8 million in retrofitting costs. It’s also important to note that the amounts listed above do not include project contingency, management, or inspection costs. For the seismic assessment, CannonDesign utilized a report that was conducted by Z&K Consultants, which reiterated many of the same findings that were in IDS Group’s seismic evaluation.
Staff Analysis
The City is currently in discussions with the Pelli Clarke & Partners, which was founded in 1977 by Cesar Pelli, the original architect for the City Hall building. The firm is currently operated by Cesar Pelli’s son, Rafael Pelli, and Fred Clarke, who worked with Cesar Pelli on the City Hall building. Included in the discussions is Gruen Associates, who were originally the architects of record for the building. These firms have a great attachment to the San Bernardino City Hall and will be able to provide the appropriate guidance necessary to respect the original concepts and designs through the renovation and retrofitting process.
The retrofitting and renovation of City Hall (“City Hall Project”) would utilize the Design- Build (DB) process, as allowed under Chapter 12.21 of the San Bernardino Municipal Code. Unlike the traditional Design-Bid-Build (DBB) process, the DB process uses a single entity for both the design and construction of the project. This allows project phases to happen simultaneously and provides for an accelerated project delivery schedule. The steps in the DB process include:
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1. Prepare a set of documents outlining the scope, requirements, and estimated price of the City Hall Project.
2. Release a Request for Qualifications (RFQ) to prequalify or short-list the design- build entities whose proposals shall be evaluated for final selection.
3. Release a Request for Proposals (RFP) that invites the prequalified or short- listed entities to submit competitive proposals.
Under the DB process, the City would utilize the best value selection method, which would take into account price, technical design and construction expertise, life-cycle costs over 15 or more years, and other criteria identified in the RFP. The allows the City to select the proposal that offers the best long-term value to the public.
To finance the City Hall Project, the City would issue lease revenue bonds (LRB). LRBs are a type of revenue bond that is secured by lease payments made by the party leasing the facility that was financed by the bond issue. LRBs are typically used by government agencies to finance the acquisition of, construction of, and/or improvements to facilities, such as city halls, courthouses, fire facilities, and other government buildings. Unlike revenue bonds that primarily use money generated by the project (e.g. a bridge toll) to pay the principal and interest on the bonds, in LRBs, a lessee (government agency) pays rent to use the facility. Those rental payments are then used to pay the principal and interest on the bonds. For the City Hall Project, the City would utilize a lease-leaseback financing structure, which would be structured as follows:
1. The City leases City Hall to its Financing Authority (“Authority”) for a nominal amount (~$1).
2. The Authority would then lease City Hall back to the City, with the value amortized over time.
3. The City’s lease payments are transferred to a trustee, who then uses those lease payments to pay the debt service on the LRB.
Unlike General Obligation bonds, LRBs do not require voter approval. These obligations fall under the Offner-Dean Lease Exception rule (“Exception”) and do not constitute indebtedness under the state constitutional debt limitation and, therefore, are not subject to voter approval. All lease financings that intend to qualify under the Exception must satisfy multiple criteria, including:
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1. The rental obligation under the lease agreement must be contingent upon “beneficial use and occupancy of the leased premises” over the period covered by the lease.
2. All installments of rent that come due in any year must be in exchange for the use and occupancy of the leased facility in that fiscal year.
3. Rental payments cannot exceed the fair rental value of the leased facility in any year.
4. The lease cannot be a subterfuge for some larger obligation.
The City Hall Project would take approximately two years to complete, where City staff would move into a fully renovated and retrofitted City Hall during the first half of 2026. If starting in January, the estimated tentative schedule would be as follows:
January – February (2 months)
•Kick-off meeting for bond issuance
•Begin legal and disclosure documents
•Concept education and approval
March – April (2 months)
•Refine Disclosure documents
•Draft credit and marketing materials
May – June (2 months)
•Award Design-Build contract
•Present rating to Rating Agency
•Post offering document and market Bonds
July (1 month)
•Price and close the Bonds
•Begin construction
Early 2026 (18 months)
•Move into renovated City Hall building
Next Steps + Timeline
In the following month, the City will prepare the procurement documents outlining the scope, requirements, and estimated price of the City Hall Project in order to release the RFQ and RFP.
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Future Fiscal Impact
The City currently estimates a project cost of $75,000,000, which would be financed through Lease Revenue Bonds and amortized over a 30-year term. This would result in an estimated annual bond debt service of $5,650,000.
2021-2025 Strategic Targets and Goals
Retrofitting and renovating the City Hall building aligns with Key Target No. 2: Focused, Aligned Leadership and Unified Community as it will improve the organizational efficiency and effectiveness of City operations by centrally locating all City departments in one location.