BOE headquarters: Falling plaster, shattered glass, even bats

To the passer-by, the tower at 450 N Street is a downtown landmark, soaring assertively 24 stories into the Sacramento sky.

But for more than a decade, the Board of Equalization’s (BOE) headquarters building has been a nightmare to an assortment of state bureaucrats.  Glass panels fall out; water leaks; elevators stop between floors; there are potentially dangerous contaminants; plaster falls off walls; there are lawsuits.

General Services estimates it has spent $60 million in repairs as of February 2014, and estimates another $40 million in repairs is still needed.

“Since at least 1994 BOE has experienced maintenance problems in the building, including water intrusion, visible mold, corrosion in drainage pipes, and spandrel glass panels falling from the building.” the State Auditor declared in a Sept. 25, 2014 report.

“This is the only building in the state of California that has permanent scaffolds all around the building just because at any given time, a window can fall out, plaster can fall off,” Board of Equalization Chairman Jerome Horton told Capital Public Radio’s Bob Moffitt.

The building was constructed in 1991 for CalPERS, and the Board of Equalization  moved in during 1993.  The building’s rated capacity is 2,455 occupants; some 1,900 BOE employees work (cautiously) in the building now.  It is owned and maintained by the Department of General Services, which bought the building from CalPERS in 2006, despite mounting evidence that the building had problems.  The DGS went ahead with the purchase to save hugely on interest rates — from the-then-current 10.5 percent to a 4.5 to 5.5 percent rate, saving taxpayers approximately $31 million over the life of the bond used to pay for the building, said DGS spokesman Brian Ferguson.

General Services estimates it has spent $60 million in repairs as of February 2014, and estimates another $40 million in repairs is still needed. BOE pays General Services $17.2 million a year to rent the building.  Taxpayers are still on the hook for $77.1 million to pay off the mortgage.

Three BOE employees filed a $75 million class-action lawsuit in August 2014 alleging the building is causing employee health problems.  The BOE has already spent $2.3 million on employee claims of injury associated with 450 N.

The Board of Equalization has “has yet to prepare a cohesive, properly supported analysis.” — State Auditor

The litany of woes could go on.  There are reports the building has bats.

So what now?

The BOE, which now occupies five buildings in the Sacramento area, wants to centralize operations in one location, claiming it will result in a 5 percent gain in efficiency.  But the State Auditor, in its Sept. 25 report, said the BOE hadn’t made its case to do that. In its cover letter, the report had scathing comments on both the BOE and General Services:

“(BOE) has yet to prepare a cohesive, properly supported analysis. Many of BOE’s estimates and assumptions, including its claim that it could increase state tax revenue collection by 5 percent, do not have adequate support or rationale. After expanding on BOE’s analysis using much more conservative assumptions, we conclude that moving BOE headquarters to a new facility may, in fact, have net fiscal benefits for the State. However, these benefits would erode quickly if General Services does not have a plan in place for the future use or disposal of the building.

“Despite its responsibility to manage the State’s properties, General Services has not prepared a formal estimate for the cost of repairs needed to remediate the building and has not analyzed if maintaining ownership in the building is the most cost‐effective option for the State, nor what to do with the building if BOE is allowed to move to a new facility,” the Auditor continued. “Without firm estimates for the costs of building repairs, the market value of the building, and potential uses for the building in the future, General Services cannot adequately provide information on what options are in the best interest of the State.”

With the exception of the scaffolding, a visitor walking into the 450 N lobby notices nothing untoward.

General Service is responding.  Under legislation by former Assemblyman Roger Dickinson (D-Sacramento) appropriating $2.5 million to develop a long-range plan for the 34 state-owned or controlled buildings in the Sacramento area, General Services contracted with architecture and engineering firm Hellmuth, Obata & Kassabaum to conduct an independent analysis. The firm looked at the state’s building portfolio in the greater Sacramento area, and ranked state buildings’ condition as “very poor,” “poor,” “fair” and “good” condition.  The troubled tower was ranked as in “fair” condition — “Subjected to wear and soiling but is still in a serviceable and functioning condition,”  Out of 29 buildings, (the state Capitol and four other special-use buildings were excluded) it was ranked as the 12th-worst.  None of the buildings covered in the study was judged to be in “very poor” condition.

A companion study with additional criteria taking into account a risk assessment measuring each building’s environmental, fire, life, and safety deficiencies and other liabilities — ranking both the building’s condition and risk — placed the Board of Equalization building in 16th place for remedial prioritization.  (The 51-year-old Resources Building at 1416 Ninth Street was ranked as the worst.)

With the exception of the scaffolding, a visitor walking into the 450 N lobby notices nothing untoward.  There are pieces of California historical ephemera ranging from documents to snowshoes displayed in glass exhibition cases, a pleasantly textured concrete floor and a wall of medium-dark marble tiles to the left.  A clerk at one of the public windows says the only complaints she receives are from irate taxpayers upset about some action by the Board.

Based on the rankings, DGS says it “will engage with the departments in the buildings identified as having the greatest need” to see what can be done to remedy the situation.

The BOE building, with a ranking of 12th in building condition and 16th in combined risk and condition criteria, does not appear to be among those with the greatest need, meaning it will be a headache for the foreseeable future.