City Council to decide fate of costly human resources building in December

(Danika Worthington/DD)
(Danika Worthington/DD)
Despite shortfalls such as lack of parking and inconvenient floor plan, developers have already expressed interest in the human resources building the city could save $400,000 annually by selling. (Danika Worthington/DD)

The date for City Council to decide whether to sell the city’s pricey human resources building has been set for mid-December.

The city wants to sell the building as part of a consolidation effort after roughly 3,000 positions were cut.

The sale of the building could save the city $400,000 annually from utilities and upkeep, according to Toni Maccarone, special assistant to the city manager. It would also save a one-time $200,000 because the city wouldn’t need to rewire the building as part of a citywide telephone project. The sale would also cover the $2.2 million outstanding debt and $1.2 million cost for the move.

Related: Plans to sell costly downtown human resources building move forward in subcommittee

“My guess is we’ll have a number of groups interested in buying the building,” said Christine Mackay, director of the city’s Community and Economic Development Department.

Three to four businesses have already expressed an interest and toured the building, but Mackay didn’t identify those companies.

She said national companies have expressed an interest despite some of the building’s shortfalls, including lack of parking, age and an inconvenient floor plan with low ceilings.

“There are some developers interested in its acquisition to get a footprint downtown,” Mackay said.

If approved, the city will hold a 45-day Request for Qualification starting in January when developers can submit a price estimate and general plan for the building, Mackay said.

If developers meet the qualifications, they will have another 45 days to respond to a Request for Proposals where they must provide more specific details and a timeline.

She said the city could have just sold the building, especially with the strong real estate market downtown after Arizona State University and University of Arizona opened schools in the area.

But instead the city wanted to have more control over who takes over the building, she said.

“The mayor and council members are very interested in downtown continuing its path to vibrancy and excitement,” she said.

The 100 employees currently in the building on the southeast corner of Monroe Street and Second Avenue would be moved to the Calvin C. Goode building on Washington Street and Third Avenue.

The city is also looking at relocating the Police Department Professional Standards Bureau on Monroe Street and First Avenue to another city building, Maccarone said in an email. The decision to sell is going to the Finance, Efficiency, Economy and Sustainability subcommittee on Dec. 16.

The bureau’s current lease ends September 2016. Employees will then be relocated to a city-owned building, saving the city $350,000 a year, Maccarone said.

City Council directed city employees to start saving money “aggressively” for fiscal year 2014-2015, which left the city with $25 million more than expected, according to a report released by City Manager Ed Zuercher.

But city leaders are still battling a projected $31 million to $58 million general budget deficit for fiscal year 2016-2017, according to the report.

The expected deficit is largely due to the increase in public safety pensions, which are projected to cost the city an additional $25 million for fiscal year 2016-2017.

“I think anything you can save is significant,” Mackay said. “Four hundred thousand dollars is a significant amount of money to save annually.”

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