By Jenny Huh
For the first time in years, legislators overseeing the Capitol Annex project in downtown Sacramento are providing major cost updates.
The Capitol Annex project in downtown Sacramento is about 55% complete after spending $632 million in taxpayer dollars as of April, according to project leaders, who say the $1.1 billion project remains on track for completion by October 2027.
The glass building currently under construction next to the State Capitol will eventually house the governor, lieutenant governor, legislators and hundreds of staff members.
Project leaders provided updates during a recent briefing to some media, saying with the exterior largely complete, construction is now shifting to the interior of the building. That includes drywall, electrical, plumbing, as well as furniture.
Officials also say the project has reached one million construction hours.
“We will continue to take steps to deliver this project on time without asking for any more money above the appropriation,” said Democratic state Sen. John Laird, vice chair of the Joint Rules Committee.
“We do not intend, and I will repeat that,” said Democratic Asm. Blanca Pacheco, chair of the Joint Rules Committee. “We do not intend to request additional funding from the Legislature.”
The Joint Rules Committee is the legislative body that oversees the Annex project.
Project leaders acknowledged there is a potential estimated $98 million cost overrun but said they plan to absorb those costs without seeking additional taxpayer funding. Pacheco said the project is finding savings, for instance, by eliminating the visitor’s center that was part of the initial annex proposal.
“Including funds previously allocated to the visitor’s center, reducing landscape scope and additional project efficiencies,” Pacheco said.
Sen. Laird added that intentional construction can help reduce costs. For instance, the construction company, Turner, is utilizing design sequencing, meaning the floors are being built simultaneously, rather than one by one. That will help deliver the project on time and reduce labor costs.
The leaders also noted, according to a budget estimate by the newly-contracted project manager Gilbane, brought on board at the end of last year, that overrun could've easily been up to $300 million for a project of this scale. Additionally, Gilbane noted in its quarterly budget report, various delays and inflation contributed to the projected overrun, like the pandemic and a California Environmental Quality Act lawsuit that was eventually dismissed.
Gilbane has a strong record in government projects, project leaders noted, including work on the Swing Space, which is being utilized by legislators as their temporary office space.
The project has faced criticism for years over transparency concerns. Those involved with the project — Pacheco and Laird — signed nondisclosure agreements, or NDAs.
Republican Assemblymember Josh Hoover questioned whether that allows for openness with the public.
“I think when everyone on a project signs an NDA, it quite literally makes it impossible for you to share information,” Hoover said. “I wouldn’t say that that’s transparency.”
Hoover has proposed eliminating NDAs connected to the Annex project and future public projects. That bill remains stuck in its first steps of the legislative process.
“One of the reasons actually given for making this structure glass was that government should be transparent and the building should reflect government,” Hoover said. “I find that very ironic.”
But project leaders defended the agreements, saying they are standard practice and meant to protect security details such as the building’s layout.
“So NDAs are a norm, and it’s not to prevent transparency,” Pacheco said. “For us, it’s important to be transparent.”
The chair also noted the committee maintains an open-door policy, though Hoover countered it's felt difficult for him as a fellow legislator to obtain the updates he has sought for years, especially on the cost of the project.
Hoover provided additional critiques on the lack of routine cost updates, saying a December report by the committee addressing some cost and timeline changes was insufficient.
But he did commend the scrapping of the visitor's center, noting that he had opposed the new construction from the get-go, due to fears doing away with the West Steps of the Capitol -- on which citizens have long held rallies and protests -- would limit decades of civic engagement.
We asked Chair Pacheco and Vice Chair Laird why it took years for this final project budget update. They pointed to the recent hiring of Gilbane and the company's getting its bearings.
“As soon as we were able to get information, we were able to provide it,” Pacheco said, adding that updates could not be provided earlier because the leaders themselves did not know what the total ultimately would be.
ABC10 reached out to Governor Gavin Newsom’s office for comment on the project updates but did not receive a response. While Newsom does not oversee the project, he has consistently supported increased transparency.
The new annex was approved by the Legislature in 2016, amid concerns over safety and accessibility with the historic annex building. While the initial proposal was to renovate and preserve the historic building, project leaders noted the more cost-efficient decision was to demolish it entirely and build a new structure.
ABC10 also asked legislative staff for a list of materials being used in the construction, as well as a cost breakdown. We were told those project details could not be provided by the time the story aired on Wednesday evening.
