The Long Beach City Council at its meeting on Tuesday, December 15 unanimously approved entering into a public-private partnership (P3) to rebuild the city’s civic center, a project that involves constructing a new city hall, port headquarters, main library and Lincoln Park, and clearing the way for new commercial and residential development.
During the meeting, City Manager Pat West indicated that the city’s negotiated agreement with project development team Plenary-Edgemoor Civic Partners (PECP), which is providing private financing to make the project work, achieves the “lowest costs” for the project, adding that costs to the city would be “manageable.”
Through the financial agreement, which closes at the end of January and covers a 40-year term with PECP, the city’s annual “service fee” payment, which pays for operating and maintenance costs, debt service, project company overhead, insurance and remunerate equity, is estimated to be $14.71 million, which includes a contingency. The service fee is expected to increase to $17.28 million in 2020.
City staff has stated that the estimated annual fee has been increased by nearly 17 percent over the city’s initial estimate of $12.6 million, which is how much the city is already paying to maintain the current city hall and other city buildings, to account for “enhancements, escalations and reallocations.”
While some councilmembers brought up the estimated cost increase to the city given projected shortfalls from higher pension costs, West and financial management assured that the city would be able to manage the extra costs without cutting core city services.
“This is a big project, there is no question,” said Mayor Robert Garcia. “This is a project that is also transformational and will reinforce the excitement that’s happening across the city when it comes to building and thinking big when it comes to development.”