A conceptual design of the proposed Belmont Beach and Aquatics Center submitted by the city to the California Coastal Commission in 2021. The project was estimated to cost $119 million and will no longer be pursued by the city.

The Belmont Beach and Aquatics Center that the city planned to start building in 2023 could be postponed or scaled down, as city officials say a new oil well setback law could deplete the project’s funding source.

The $119 million project, which has already been designed, could face a reduction of spectator seating and the elimination of some of the recreational swimming areas to bring down the cost.

City Manager Tom Modica said Friday that under the new bill, which could dramatically affect the city’s annual budget, a feasible project is likely in the $62 million to $75 million range.

“We’re potentially looking at a much different project,” Modica said.

California Coastal Commissioners granted the project a key approval in February 2021, and the city has maintained some hope that it could be built in time to potentially host an Olympic event in the 2028 games.

The design phase has already been completed, and the city was hoping to put the project out to bid and present a financing plan to the City Council this month, but that has been postponed.

Senate Bill 1137 was signed into law earlier this year and prohibits new oil wells from being established within 3,200 feet of sensitive areas like houses, schools and health care facilities. It’s unclear how many of the city’s oil wells this would affect, but a separate city memo anticipates that the law could ultimately cost the city about $122 million over the first five years of its implementation.

Long Beach was already projecting a budget deficit of about $40 million in the next fiscal year.

The bill would significantly impact the city’s Tidelands Fund, which is primarily funded by oil operations and is only allowed to pay for things in the Tidelands area, like lifeguards, police that patrol beaches and beach maintenance.

It has also been used to pay for one-time capital improvement projects like the Naples sea walls and was tapped to potentially pay for the pool. However, because of the potential for SB-1137 to reduce the amount of oil revenue coming in annually, it could prohibit the city from issuing bonds to help pay for the project, which currently has about a $58 million funding gap.

The city had planned for a phase-out of oil production by 2035, a point at which it believed it would have the roughly $154 million in funds it needs to abandon city-operated oil wells.

However, under SB-1137, that funding could dry up as soon as 2029, according to city estimates, and it could require the general fund to pick up the rest of the oil well abandonment costs. Other funding from Tidelands to pay for capital projects would be gone.

SB-1137, though, is the subject of a statewide referendum effort that could push its implementation date until after the November 2024 election, which would give oil operators about two more years to operate with fewer restrictions. But even then, projects like the pool, the replacement of the Belmont Veterans Pier and improvements to the Long Beach Convention Center could be put on hold until new funding mechanisms are identified.

Unlike the pool, Modica said the pier project, which the city hopes to be built by 2028 in time for the Olympics, could qualify for federal funding. But the pool project would likely need downsizing to move forward.

The pool’s design has already been revised once after the California Coastal Commission deemed the height of the domed structure to be too tall, among other objections it had with the original plan presented by the city.

Discussions of how the pool design could change are expected to happen in early 2023. The city will also have to file an extension with the Coastal Commission for the project by February and likely resubmit the plan for approval.

“Philosophically, we know that oil is not part of Long Beach’s future,” Modica said. “Now we’re in that mode of adapting and putting information out about the impacts so stakeholders understand.”

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Jason Ruiz covers City Hall and politics for the Long Beach Post. Reach him at [email protected] or @JasonRuiz_LB on Twitter.