On Wednesday, the Board of Directors of the County of Los Angeles approved Wednesday the purchase by the county of the Tower of the Gas Company, one of the most important skyscrapers in downtown the city of the, paving the way for the transfer of thousands of workers and public services of the Civic Center of the City.
With a 4-1 vote, the supervisors gave the county officials the last green light to move forward with the purchase of the tower for $ 200 million.
The approval occurred on the vehement objections of the Janice Hahn supervisor, who warned that the purchase would sound the death knell for the civic heart of the city center and shoved the county's workforce to a “Souesse” office tower on Bunker Hill.
“None of you here will convince me that it is a good idea,” said Hahn before voting against the purchase with a “Hell no”.
County employees are currently based inside Kenneth Hahn Hall of Administration, a 1960 building appointed according to Hahn's father, a long -standing supervisor from the county.
The building is one of the many properties belonging to the county considered vulnerable to collapse in a major earthquake. Managers have estimated that it will cost hundreds of millions to improve buildings, making a new one, probably safer Skipping an attractive alternative to some on the board.
“If we know that this building is not seismically sure, then we have an obligation and a responsibility to take action,” said Holly Mitchell supervisor from the room inside Hahn Hall where the board of directors keeps its weekly meetings.
The Director General of the County, Fesia Davenport, whose office has directed the sale, promised that the purchase “will save the county of the hundreds of millions of dollars” compared to the cost of improving the administrative room and other county buildings.
No supervisor has toured the building themselves, according to a county spokesperson, although many of their staff members have visited.
The 52 -storey tower at 555 W. 5th St. was largely considered to be one of the most prestigious office buildings in the city when it was made in 1991. It has almost 1.5 million square feet of space on a 1.4 acre site at the Bunker Hill base.
The price is a significant reduction in the valued value of the $ 632 million building in 2020, highlighting the amount of the city's offices in recent years.
At 200 million dollars, the county would obtain the tower of the gas company for around $ 137 per square foot, a good deal compared to historical standards. The county also agreed to pay up to an additional $ 5 million in fence costs on the transaction.
“This opportunity will not last forever,” warned Davenport, adding that the county could finance the purchase in part from the money reserved for fixed assets.
Hahn said the transaction is like “flying Peter to pay Paul”.
“The money used to pay for this purchase is being theft in funds that were intended to maintain this building alive,” she said of Hahn Hall.
Richard Keating, the architect who designed the gas tower to call on American companies, said it was logical that a public entity now has its possessions.
“We are considering a drop in need to use standard function, which means that lawyers, architects and accountants do things differently,” from the pandemic, “said Keating. “City and county employees are still working hard in their office spaces, but they are tired, old, sometimes decrepit and are no longer up to safety requirements in terms of earthquake.”
“This is the perfect time to enjoy some of these more or less empty office buildings.”
The move of hundreds of county workers in the Tower of the Gas Company is also to raise stores, restaurants and other companies in blocks near Pershing Square, he said. “I think it's a good movement all around.”
In recent years, the downtown office market has turned against the owners, as many tenants have reduced the imprint of their office in response to the COVID-19 pandemic, when it has become more common for employees to work remotely.
Last year, the owner of the tower of the gas company,, An affiliate of Brookfield Asset Management, was lacking on his debt, and the property was put on a receiver, in which a representative appointed by the court took custody of the building to help the creditors to recover funds which they lent to Brookfield. The building has about $ 465 million in current loans.
The other main tenants of the gas company include the law firm Latham & Watkins and the accounting firm Deloitte. The county will assume that the tenants leases as an owner.
When the gas company tower officially belongs to the county, it will be withdrawn from tax roles. Last year, the building's property tax bill was more than $ 7.1 million, according to the supplier of real estate data Costar.
Tenants would however be required to contribute to tax declarations by an amount not specified through an “interest in the possessive” which can be taken from private companies renting public buildings. Tenants of private office buildings also generally pay a share of owner's land taxes.
The building is in good condition with “a useful lifespan” of at least 35 years, according to a recent report on the state of the ownership prepared for the current owner who was obtained by the Times.
The report also indicates that the Tower and the World Trade Center garage at 333 S. Flower St. included in the agreement require approximately $ 1.3 million to respond to the necessary repairs and the delayed maintenance. Additional long -term costs to maintain and modernize properties have been estimated at around $ 48.7 million over 12 years. The costs provided include roof repairs, the renovation of air conditioning systems and updating elevators.
The county currently occupies about 16.5 million square feet of office space for 38 departments, which includes 6.9 million square feet of rented office space and 9.6 million square feet of ownership space, said Davenport A note to the board of directors Recommend the purchase of the gas company tower.
The county spends about $ 195 million a year on rented office spaces, and the property it has “is in poor condition and old,” said Davenport. Almost half is over 50.
By moving the staff of the rented office space and aging buildings in poor condition, the county avoids paying the rent and the “significant” costs of seismic renovations and other renovations necessary for old buildings such as the aging of air conditioning, plumbing and electrical systems, declared the service note of the chief executive. Funds for seismic renovations and other renovations of old buildings will be included in the payment of the gas company tower.
The county inspected the building and will buy it “as it is,” said Davenport. The Ministry of Public Works examined a seismic report for the tower and agreed with its conclusions. A county spokesperson said that the conclusions will remain confidential until the end of the agreement.
If the county chooses to finish a seismic modernization and other improvements to the tower of the gas company, it can make a return to future investment by selling the building when the market is recovered, said Davenport.
Southern California Gas Co. said in September that he plans to leave his registered office for a long time in his homonymous tower, where he has been a main tenant since the end of the building, to another skyscraper a block north at 350 S. Grand Ave.
Public service has signed a long -term lease of nearly 200,000 square feet over eight floors in the Grand Avenue building on Bunker Hill often known as Two California Plaza, said its new owner, and is expected to move by spring 2026 after building the new offices. Socalgas will also have an office on the ground floor to serve customers.
