The nine-story administration building Pierce County officials want to construct on Pacific Avenue in Tacoma’s South End will cost more than they originally projected. But they say the investment will still justify the expense because of long-term efficiencies the new headquarters could achieve.
This week, Pierce County is wrapping up its negotiations with Seattle developer Wright Runstad over the project’s cost. It is expected to be disclosed to the public on Monday, Deputy Pierce County Executive Kevin Phelps said.
The project has grown since County Executive Pat McCarthy first proposed it in 2013 as a roughly $70 million structure that would consolidate county services into about 223,000 square feet of office space on three or four stories on the former site of the closed Puget Sound Hospital, 3580 Pacific Avenue.
Now, it’s designed as a 330,000-square-foot structure that includes office space for a separate agency, the Tacoma-Pierce County Health Department.
“It’s a bigger building, a much bigger footprint,” McCarthy said.
The expanded design follows the Health Department’s August decision to join the county as a rent-paying tenant in the building. The proposal grew further after recent public meetings in which East Tacoma and South End residents expressed concerns about a lack of parking in their neighborhood.
The county’s original plan called for about 400 street-level spaces. With more employees and more services now expected to use the site, the county revised its plan to include about 1,100 total spaces on two ground-level lots and a two-story parking structure. It also has room for a coffee shop and deli.
County officials and the public will have about two weeks to consider the project’s cost before the County Council is expected to vote on it. That vote is now set for Feb. 17; the council delayed it a week because one of its members is likely to miss the Feb. 10 meeting.
McCarthy has been moving the project forward since a 2013 study concluded the county could save tens of millions of dollars a year by consolidating services.
The new building would bring together 19 government agencies and county departments that are spread among 14 locations. The county says it can trim its payroll by bringing those services under one roof while saving money that currently goes to leases and maintenance on outdated buildings.
Law and justice operations would remain downtown in the 54-year-old County-City Building, which the county owns.
The administration building proposal has come under scrutiny over the past month from residents who want the county to reconsider building in the South End. They’re concerned that county leaders are missing a chance to spark investment downtown.
Most of the jobs moving to the new headquarters would come from the County Annex building near the Tacoma Mall, but downtown still would lose about 400 workers.
“If you’re going to spend $100 million of public money, where does the most public benefits come from?” asked Kevin Grossman, president of the Hilltop Business District Association. “If you put it in the civic core, it spurs additional development. If you put in residential area, what development can it spur?”
County officials eyed the site of the former hospital because the county owns the land. They considered building downtown but determined it would be too expensive to build parking structures to accommodate more than 1,100 employees and customers.
They say if they don’t build the new headquarters, they will spend more than $300 million over the next 25 years on leases, maintenance and salaries. If they do build it, they say the county will still save money over time even though the cost of the project has grown.
“It’s a bigger building. It’s going to cost more, but our business model still works,” Phelps said.
When the original project was proposed in 2013, McCarthy estimated it would save county taxpayers $39.65 million over 25 years compared with the current costs of having a dispersed workforce. Two months ago, Phelps said nothing had changed that would significantly lower that estimate.
Wright Runstad is expected to give the county a guaranteed maximum cost for the council to consider. The company would be responsible for any cost overruns, according to a county presentation at a public forum last week.
The county and Wright Runstad plan to use a financing plan that would the allow the developer to take out tax-exempt bonds to pay for construction. The county would pay off the bonds over 25 to 30 years and eventually take over ownership of the building.
If the project is approved, the county intends to start moving workers into the building in the fall of 2016. It has eight leases on rental properties that are expected to expire at the end of next year, Phelps said. It wants to get out of those properties to cut its expenses.
“Your taxes will not go up” to pay for the building, Pierce County Councilwoman Connie Ladenburg said at a forum last week.