County agrees to purchase new office building

After weeks of speculation, Riverside County agreed late last month to purchase the 10-story Regency Tower currently under construction in downtown Riverside. The $126.5 million purchase will consolidate the offices for the District Attorney, which are currently scattered in at least 10 buildings around downtown.

Yet to be decided is whether the DA will be sharing the 260,000 sq. ft. building with other departments, namely the Public Defender. County officials expect the DA to fill approximately three-quarters of the space with the rest reserved for future use. This has led some officials to call for sharing of the building in the interim.

The sale of the building to Riverside County leaves the City of Riverside with questions surrounding the original deal made with Silagi Development, namely whether the building — originally envisioned as private Class A office space — will provide the same economic benefit in county hands. And though this is a valid concern, it could be negligible as the sale will likely trigger additional office projects downtown — including one recently proposed for the southeast corner of University and Lime — in order to fill market demand.

However, the original agreement between the city and Silagi contained concessions with regards to on-site parking requirements. Although Regency Tower will include 330 spaces in three-levels of subterranean parking, the developer secured additional required spaces — at a discounted price — from the city. The $4 million agreement allows daytime use of 400 spaces in the 540-space, city-owned parking structure across the street. City officials estimate the 400 spaces cost $7 million to build. Thus, the agreement effectively provided a subsidy of $3 million to the developer.

Yet, some have speculated Riverside County will end up purchasing the Orange Square parking structure, which could help the city recover some or all of its $17.3 million cost in building the structure (which was completed in 2005). But, depending upon how such a possible agreement is drawn up — e.g., allowing public access during evening hours — it could also potentially cause the loss of prime public parking (at least until a replacement garage could be built).

Overall, the sale of Regency Tower to Riverside County is a mixed bag. Indeed, the city will lose some of the economic benefits associated with a new private-use office building. It will also have to contend with the end results of the original parking agreement that is, in effect, now being transferred to the county. However, by purchasing Regency Tower, the county will save taxpayers millions of dollars by not having to construct its own building. Moreover, the sale will likely spur other Class A buildings to be constructed downtown, which essentially could replace the high-end, private-use office space being lost with the transaction.

Related

Riverside Press-Enterprise – Riverside County district attorney’s new tower rivals space in posh law firms (Nov. 07, 2008) | Officials push Pacheco to share new building (Nov. 02, 2008) | District attorney’s operations occupy buildings throughout Riverside (Oct. 28, 2008) | Riverside office projects moving ahead (Oct. 28, 2008 | Riverside officials feeling buyer’s remorse about downtown office building deal (Oct. 25, 2008) | Delay sought on county office tower vote over dispute about parking spaces (Oct. 21, 2008) | Right call on DA digs (PE Op-Ed) (Aug, 31, 2008)

Previous