The build-out of CPS Energy's new headquarters at McCullough Avenue and Avenue B is on schedule for mid-2020, the utility said recently.
The overall project will cost $210 million, which includes the purchase of the property, the design, construction, furniture, etc., said Bill Badger, CPS Energy's manager of facility and capital construction. It's being funded via the utility's cash reserves and from proceeds from the sale of its six downtown properties, which the CPS Energy board declared as surplus in September.
"We are not borrowing money, and this has no impact on our rates," Badger said.
Instead of building anew, CPS Energy gutted two office towers, which it purchased in 2016, that once served as office space for AT&T, as well as Valero Energy Corporation's headquarters.
The utility is essentially increasing the collective size of the two buildings from 433,000 square feet to 494,000 square feet. Both buildings are being expanded east; the walls are being extended out. The reason, Badger said, was because the building simply no longer met code. This included the stairwells and restrooms that were not large enough to be ADA accessible.
"We're adding some steel to make those floor plates a little bigger so we can push the stairwells where we need them," Badger said.
Among the upgrades is a parking area in the 11-story tower closest to the river, which is being converted into an auditorium for public gatherings and meetings. The other tower, closest to Avenue B, is 14 stories.
In an interview in mid-December, Badger said the piers for a six-level, 1,200-plus-space parking garage would be drilled in a matter of days. The garage will face Avenue B.
The overall project is expected to be completed May 2020, with about 1,300 CPS Energy employees moving in around September or October.
Badger said the utility has no plans to lease unused office space.
He said any unforeseen work beyond the $210 million will be covered by contractor Sundt, unless CPS Energy makes the change.
"As long as we don't change the scope of the project, they have to deliver at that number," Badger said.
The utility will use proceeds from the sale of seven properties—including its current headquarters and garage building on Navarro Street, Villita Assembly Building, and the former Jones Avenue Service Center, among others—to offset the cost of the new headquarters. He said contractor CBRE Group, which is marketing the properties, had not put them on the market.
» CPS Energy selling five downtown properties
Setting it straight: The original version of this article gave the wrong title for Bill Badger, who is CPS Energy's manager of facility and capital construction.
Editor's note: Bill Badger is a monthly supporter of the Heron. Click here for a complete list of supporters and sponsors.
CPS Energy is preparing to sell six prominent downtown properties, including its 10-story, River Walk headquarters and the circa-1959 Villita Assembly Building.
On Monday, the utility's board of directors declared the properties surplus, as well as a customer service center on San Pedro Avenue, as it prepares to move into its new headquarters on McCullough Avenue in 2020. Another property, the former Jones Avenue Service Center, which was declared surplus in 2015, will also be placed on the market.
The properties that will be up for sale this year:
» Headquarters building, 145 Navarro St., built in 1928
» Navarro building and garage, 146 Navarro St., built for the 1968 World's Fair
» Parking garage between CPS Energy headquarters and the Tower Life Building, which is co-owned by the utility and members of the Zachry family, owners of the Tower Life.
» The surface lot adjacent to the Mexican Consulate on Navarro Street
» Villita Assembly Building, 401 Villita St.
» Former Jones Avenue Service Center, 326 W. Jones Ave., which faces Jones and the San Antonio River
» Northside Customer Service Center, 7000 San Pedro Ave.
The downtown properties total $66.5 million in assessed value and about 10.5 acres, according to property records. The revenue generated from the sale will help off-set the cost of CPS Energy's new $210 million headquarters. Currently, the utility has hollowed out the twin mid-rises on McCullough and the river, which were used by AT&T and by Valero Energy Corp. for its headquarters, in their previous lives.
There is no asking price for the properties, said CPS Energy Spokeswoman Nora Castro.
"Right now, it's so preliminary, we just had the vote to put them out there, so that hasn't been determined or anything," Castro said.
Castro said the properties could be sold in a package deal or individually, "All options are on the table."
CPS Energy has hired CBRE to broker the deal or deals. The entire process is expected to take two years.