The days of the current Long Beach Civic Center are officially numbered, after the city council unanimously to approve the project plan for the public-private venture that will erect a newer, sleeker and earthquake-resilient compound.
The nearly 10-year process came to a close with the vote, eliciting a large round of applause, and will kick off roughly seven years of construction in downtown, bringing the project to life.
City Manager Pat West laid out the financial terms of the agreement that will see the city essentially lease the building from Plenary Edgemoor Civic Partners (PECP), the firm heading the design and construction of the project, before it takes ownership of it after 40 years.
The project will cost the city approximately $14.71 million annually, a 17 percent increase over the original estimate, which will necessitate allocations of about three percent from the city’s general fund. In total, the deal calls for $1.8 million in spending versus what the city already spends to inhabit it’s current buildings, and over $6 million less than it would cost to run the current structure if the city wasn’t operating it at a “bare minimum” maintenance level.
West reiterated the city’s hand was forced by the the seismic deficiencies discovered in 2006 and by a lack of viable alternatives outside the plan to demolish and rebuild a new civic center.
“We’re not here to get a pretty civic center or city hall, we’re here because we have to be here,” West said. “We have no alternative and we’re in a very dangerous building.”
The vote came after nearly four hours of discussion from behind the dais and from the public, and after nearly a year of outreach efforts and public meetings hosted by both the city and PECP. The firm was named the winner of the request for proposal process last December as it edged out Long Beach CiviCore Alliance for the bid.
While the decision wasn’t based purely on aesthetics, the project plans stand in stark contrast to the cold, severe building that the city currently calls home. Vice Mayor Suja Lowenthal, who was praised by West as being one of the driving forces behind the new civic center since 2006, said the common thread shared by cities that redesign their civic centers is the desire to exchange “foreboding, monolithic public buildings” for more lively and inviting places for the community.
“We’re poised here to today to approve buildings that have the potential to once again anchor our city, to once again anchor the downtown,” Lowenthal said. “We don’t know the multiplier effect but when the public sector invests in a city, ‘good money follows it.'”
The project will demo the current city hall, main library and old country courthouse and erect a joint Port-City Hall complex, new Main Library, redesigned Lincoln Park and plans for a private sector tower—to include 32,000 square feet of retail space, up to 580 residential units and a boutique hotel—to take the place of the current City Hall. There are also provisions for 10 percent of those residential units to be affordable housing, defined as 120 percent of the area median income, or roughly $60,000 per year.
Director of Economic and Property Management Mike Conway said that tax revenue expected to be generated from the private tower are expected to help lower the annual service fee to be paid to PECP. However, the availability of that tax revenue, both in expected dollar amount and timeframe, is unclear, as there is no set date for the construction of the tower and the $940,000 in annual revenue is based on projections for full-capacity for the retail space and at least a 100-room hotel, something that Conway said is hard to project a market for five years out.
However, the fact that the new civic center has been in talks for nearly a decade has helped spur real estate investment in the surrounding area. Toliver Morris, president of William Morris Commercial and chair-elect of the Downtown Long Beach Associates (DLBA) board, said that investors are continuing to arrive and the ongoing progress of the civic center will only help grow the economic investments in downtown that have totaled over $1 billion in the past few years.
“We’ve talked about 8,000 jobs being created by the civic center; I think there will be way more jobs created by development that happens in and around the civic center because it’s here,” Morris said. “That’s something that we can’t quantify. The tax dollars that come from that are going to be fantastic as well.”
Third District Councilwoman Suzie Price dug in on the financials of the deal, noting that the rising pension costs and projected surplus deficits in the coming years might be made worse than the rising costs of the civic center project. Some levels of shortfall are expected to hit in fiscal years 2019 and 2020, but Director of Financial Management John Gross said that those budget hits totaling about $5.3 million would be relegated to those first two years of occupancy.
She also pressed city staff to ensure that a vote to go forward with the plans would not risk future core services to the residents by reallocating general fund dollars to make payments to PECP.
“The legislative intent of my vote tonight is premised on the fact that our residents are not going to suffer core services as the result of us building a new civic center,” Price said. “I could not support a project that would result in us having to cut services down the road to support, even if it’s for one year, because that’s an entire year that our residents depend on those services and we need to be increasing, not reducing those services.”
A delay in a vote last night could’ve cost the city and the Port of Long Beach (POLB) roughly $600,000 per month in delay fees, and if for some reason the project is abandoned altogether, the city could be on the hook for a $4 million termination fee. While PECP and Johnson Controls Inc., the company the city outsourced daily maintenance, will be in charge of day-to-day upkeep of the building over the first 40 years, the city is responsible for any earthquake-related damage.
The council also approved a bond measure to help finance the demolition of the old courthouse and its related asbestos abatement costs along with one-time costs associated with the construction of the project. The bonds are capped at $14.5 million.
Not everyone was onboard with the project that mostly received praise from both community members and the business sector. There were concerns about mitigation measures being taken to protect neighbors of the “super block” that will be under constant construction over the next five to six years, and one union representative alleged there had been a violation in of the city’s duty to bargain in entering into labor agreements for the project.
Former Councilwoman Rae Gabelich chided the council for entertaining the approval of a project that will place the city in a position to spend money it doesn’t have, noting that the same discussion was held in 2006 when the deficiencies were discovered and several members of the council opposed digging a deeper financial ditch. She said placing the onus on preserving the safety of city employees and residents was unfounded.
“If we had felt that this building was in any way putting anybody in harm, we would’ve vacated it in 2006,” Gabelich said. “We certainly wouldn’t have continued to run businesses as it is today. If we had made investments in this building all along, maybe we wouldn’t have the problems that we have today.”
Commenting on the increased costs, partly attributed to the discovery of asbestos lining the top of the Lincoln Parking Garage, Gary Shelton reminded the council that element was known when the city looked into redesigning the park years ago.
“It’s a surprise to me why that’s a surprise to you,” Shelton said.
With the approval the contract is set to commence on January 1, 2016, and if construction runs to plan, will end with the demolition of the current City Hall in Spring of 2021. Mayor Robert Garcia said that in addition to providing the city with “the best library in the region,” the new civic center will go a long way toward ensuring the safety of the thousands of people that filter through its doors on a daily basis. He praised staff for being creative in the financing plan the new civic center, something he said wouldn’t have happened without the inclusion of private investment.
“This would not be possible without the private sector,” Garcia said. “There is no way we could go to Long Beach voters and residents and ask them to put out a multi-hundred million dollar bond to finance this project.”