The California Lottery Commission today approved plans to award a contract not to exceed $53.7 million to Otto Construction. It will build a new six-story 155,500 square foot home for the commission on Richards Boulevard in Sacramento.
Commissioners also set aside an extra $9.1 million for unexpected contingencies and another $1 million for potential cost escalation during the life of the project.
To see a lottery commission report about the headquarters project, click here.
Building the new headquarters may create as many as 900 construction jobs, offering some badly needed good news for the capital's battered economy.
Yet some may wonder how the commission secured a new headquarters when most other state agencies and departments are laying off workers and slashing budgets?
Lottery commission spokesman Bill Ainsworth has the answer.
The commission was created by a voter-approved state law in 1984. It operates like a business - and its money is kept separate from the state's general fund revenue.
The law requires that at least 34% percent of the lottery's revenue go to public education.
Because it is costing more and more to maintain the old building, lottery officials decided they'd save money - and have more to return to education over the long term - by building a new headquarters that is far more energy efficient, Ainsworth added.
Officials explored renovating the old building, but its foundation is literally sinking.
"After careful analysis, we decided we just couldn't do nothing," Ainsworth said. "If you're running a business like we do, you look at investing over the long-term. Over the long term, we'll have more money to return to public education by lowering costs."
"It's also a good time to be building. You can negotiate better deals with builders because there's not a lot of work going on out there right now," Ainsworth added.
If the commission and Otto Construction cannot reach a deal on a final contract, the commission also approved a back-up list of three other builders.