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Opinion / Common Sense

What Is City Mgm't Trying To Hide From Council And Taxpayers On New Civic Center, And Why Are They Hiding It?

by Terry Jensen


(May 21, 2014) -- When Mayor Bob Foster and some City Council members began touting the Public Private Partnership (P3) used for building the new courthouse and suggested we had a "once in a lifetime opportunity" to build a new Civic Center using the same type of partnership, I began to worry. I worried because the Courthouse P3 project is a monumental fiscal disaster for the state (see Common Sense #19, here.)

After watching Michael Conway, the City's Business and Property Development Director, in a Council study session on seismically retrofitting City Hall and reviewing the public reports re building a new City Hall, it was clear to me that the cost and projections didn't remotely pass my smell test.

Understand, I don't oppose the redevelopment of the complex (on which I'll provide my thoughts in a future column) but I do resent the way Mayor Foster et al. are trying to cram this awful idea down our throats. After my review of the materials offered by city management, it was clear to me that Council members couldn't possibly have sufficient information on which to make an informed decision. In my view, our soon-to-be-former-Mayor is touting a project that is fiscally flawed with a conceptually flawed development plan that will leave us with long term costly consequences.

So, on April 13, 2014 I submitted a request for documents to the City Manager's office under the California Public Records Act. I asked for all records including cost projections, communications, reports, memoranda, e mails and other documents that related to study sessions and presentations to Council on Civic Center seismic retrofit cost, bonds or loans and maintenance cost. The nine item list was very specific and detailed and necessary in order for me to determine the accuracy of the assertions made to Council.

After thirty days, I hadn't received a single document and the Records Coordinator in the office of the City Manager informed me that staff (Mr. Conway) hadn't provided a single document...and the Records Coordinator said she didn't know when documents would be provided.

It was obvious to me that I was being stonewalled. I called the City Manager and indicated that it looked to me like his office was intentionally withholding documents. I also sent an email to the City Attorney's office outlining the events and my frustration.

On May 16, 2014, I finally received a response. It was insulting.

  • City management refused to provide a single document that shows how they determined City Hall seismic upgrades would cost $50 million.

  • City management refused to provide a single document that shows how they determined ADA, HVAC etc. will cost $30 million.

  • City management refused to provide a single document that shows how soft cost, FF&E and relocation will cost $39 million.

City management portrayed the documents as in "draft form" and in the "decision-making process." The justification is in my view without merit and frankly ludicrous. The City has publicly indicated that it came up with a cost figure of $119 million, added an annual escalator and "sold" the cost estimates as fact. It makes one wonder: what are they hiding?

City management didn't provide a single email, or letter, or correspondence to or from staff, nothing from consultants, architects, contractors or the office of one of the project's chief cheerleaders, Mayor Foster. How's that for open and transparent governance?

What I did receive could have been provided in a couple of hours without much of a strain, They sent me four items; a Civic Center cost budget, a list of the offsite leases that are "candidates" to relocate in a new City Hall, a 2010 Lease Agreement between the City and LB Bond Finance Authority and a "Self Contained Market Value" analysis of the old courthouse.

Here is what I found with the few documents I received.

  • City management doesn't seem to know the size of the current City Hall building. I found at least three different figures for usable square footage; one of them is almost 20% larger than another. Which is it?

  • The City says the current Civic Center maintenance expense is $7.84 million. I doubt it! The document they provided has insufficient detail to determine the accuracy of their claim with any certainty. But what I did find is troubling.

    • The current Civic Center property has a $31,500,000 encumbrance at 4.5% interest that has another 14 years until paid. The 2014 payment is $2,563,967.50 and it is not going to disappear. In my view the City has two options re this debt.
    • It can pledge other properties to replace the Civic Center as collateral, but if the City does this, it will be obligated to pay the debt service AND the additional cost of the new facility.
      OR
    • The P3 developer could pay off the debt...but then the City would be obligated to pay the debt service but at a HIGHER rate than the 4.5% the city is now paying. In my rough estimation, it could potentially cost the city approximately $500,000 more every year.

  • City management also tossed in items that, in my view, inflate the total cost figure: The City added in police security ($683,213), the cost of the City Information Desk labor etc. ($150,236), capital improvements ($625,000) which may be nonrecurring, questionable loading of engineering staff, janitorial costs, questionable building expenses. I believe the maintenance expense may be overstated by $2 million per annum. (I plan to ask for more detail on these items.)

  • The City says it spends $2.13 million in offsite lease expenses that may be "Candidates for Civic Center Relocation," implying the City could save money if it consolidates the "Candidates" in the new building. Nonsense! The eight "Candidate" leases have an average cost of $1.39 per square foot. That's substantially lower than the cost for a new building. From my experience, Class A building rent exceeds $2.50 per square foot or more. If all the "Candidates for Relocation" were move to the new building, it may cost the City approximately $1.1 million MORE than the City is now paying. One of the largest leases is in an industrial building with 26,100 square feet. The City only pays $.50 per square foot now...so the City moves, the cost would increase by 400% AND the lease doesn't expire until 2022. They are not moving!

  • Most of the departments housed in the leases have no business relocating in the Civic Center because they're currently located closer to the people who use their services.

As someone who has reviewed hundreds of project pro formas and more budgets then I can remember, the reports and agenda items presented to Council and the public provided little detail, questionable cost estimates and appeared to me to be custom crafted to support one conclusion.

In mid-July, Long Beach will have five new Council members and a new Mayor. In my opinion, it is arrogantly scornful for Mayor Foster and the currently seated Council majority to impose a fiscally irresponsible plan on those who will succeed them. Each one of the incoming Council members -- Price, Uranga, Richardson and either Kemp or Mungo and Gonzalez or Tagaloa -- should speak up now and urge a sensible slowdown in the process until they are seated.

If Mayor Foster cared more about fiscal responsibility than a vainglorious "legacy" development, he would make sure this issue is held over until the new Council and Mayor are in place.


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Previously on LBReport.com: Common Sense by Terry Jensen (continuing series):

  • No. 22: Double Standard Accepts Defeat As Victory

  • No. 21: March of the Lemmings: Public-Private Partnership Proposed For New Civic Center

  • No. 20: Long Beach: Why Are Stupidities Tolerated, Mediocrities Applauded And Priorities Bewildering?

  • No. 19: Public Private Partnership Isn't Panacea, May Invite Higher Cost To Rebuild Long Beach Civic Center

  • No. 18: Accountability

  • No. 17: Good Or Bad Deal For Taxpayers? Info & Answers Needed Before Council Leases Parking Spaces To 6th/Pine Owner

  • No. 16: New Taxes? Get Serious First

  • No. 15: Important Questions Not Asked, Answers Needed Re Uncollected Parking Ticket Revenue

  • No. 14: Using Bad Technology To Excuse Bad Management

  • No. 13: Ruling By Obfuscation, Enabled By Mayor & Council

  • No. 12: Mystery Holiday Moves Mayor To Propose Canceling Jan. 3 Council Meeting

  • No. 11: Public Officials Shrugging Public Costs Of Project Labor Agreements

  • No. 10: Outsourcing City Hall

  • No. 9: Lack of City Hall Credibility, Not Residents' Complaints, Deters Quality LB Developments; Restoring Trust Requires Accurate Information & Respectful Partnership b/w Residents & Officials

  • No. 8: Council Grants Permit With Conditions Requiring What City Hall Already Basically Requires & Residents Deserve

  • No. 7: Facing A De Facto Precedent Proposed at 2nd/PCH

  • No. 6: Put Redevelopment In Council's Hands, Make LB Elected Officials Accountable (For A Change)

  • No. 5: Suppose Our City Officials Had Applied These Efforts To Assure World Class Kroc Center Instead Of For This, This & This

  • No. 4: Council Majority Either Didn't Know, Or Knew But Didn't Disclose, Amount Of Taxpayer Dollars Potentially Up In Smoke On Med MJ Vote

  • No. 3: City Hall & Its Boosters Created Budget Mess (Quit Blaming Recession); Proposed Proportional Cuts Don't Prioritize; Council Needs To Define Core Items & Cut Others

  • No. 2: Costs vs. Benefits: Council's Costlier-Than-Necessary Seawall Fix = Decaying Belmont Pier & Other Shoreline Assets

  • No. 1: Santa, Call LB City Hall: Taxpayer Leased Vacant Bldg. (New Home To Daisy Lane Xmas Displays) Invites Annual Public Review of All City Owned/Leased Properties And Zero-Based Budget



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