SamTrans examines moving San Carlos headquarters

A SamTrans spokesperson said the headquarters building is decades past its useful life due to elevators, roof, ventilation system and technology issues. SamTrans has been interested in looking at a new headquarters for several years and believes now is a good time due to recent economic changes, as the cost of the building and the cost of buying are equalizing. The commercial real estate industry faces challenging times due to inflation and rising interest rates, with many people also not returning to the office and working from a hybrid schedule.

“Our current building has more than $70 million in estimated deferred maintenance, so staying where we are is not a zero-cost issue,” spokesperson Randol White said.

The new location needs to be in the 90,000- to 110,000-square-foot range to fit with current needs, according to SamTrans staff. If the building is larger, staff noted there might be an opportunity to obtain such a facility at a discounted rate and partner with other agencies that could use the space.

If a new location has yet to be identified by Dec. 31, staff will return to the board to discuss the next steps. The board initially discussed options at its July 12 meeting and decided to look into buying a new building over rebuilding on its current site or making no changes.

According to a staff report, funding for a new headquarters could include a mixture of capital funds and debt financing. The approximate annual debt service costs of financing the capital cost over 30 years are expected to range from $7 million to $9 million. David Canepa, a member of the SamTrans Board of Directors and a San Mateo County supervisor, asked staff to be diligent about cost increases. He noted that the county set aside $150 million for its new office building in Redwood City called County Office Building 3, which is now expected to cost around $240 million based on cost escalations.

“I think tracking that and looking at being cognizant of costs and materials is going to be critical,” Canepa said.

The SamTrans building in the heart of downtown San Carlos was initially a 150,000-square-foot bank sitting on a one-acre lot at 1250 San Carlos Ave. It originally served as the headquarters of Eureka Federal Savings and Loan before SamTrans acquired the building in 1990. The building is approximately 140,000 gross square feet on a 1.8-acre site, with parking under the building and in an adjoining four-story parking structure with 410 total parking spaces.

The board also agreed to a contract with CBRE Group, a global commercial real estate services company, to help search for a location.