With No Discussion, State Senate Passes -- And Sends To Assembly -- Bill That Would Extend Taxpayer Payments To LB Civic Center Deal's Private Developer/Operator Up To 50 Years
City Hall-desired measure placed on Senate's "consent calendar" after Senate Committee's two Repub Senators (Nguyen and Moorlach) vote in Committee to support the bill
LBREPORT.com is reader and advertiser supported. Support independent news in LB similar to the way people support NPR and PBS stations. We're not non-profit so it's not tax deductible but $49.95 (less than an annual dollar a week) helps keep us online.
(May 18, 2015) -- With no debate, Sacramento's state Senate today (May 18) passed and sent to the Assembly SB 562 that would extend taxpayer payments to the LB Civic Center deal's private developer/operator for up to 50 years.
The measure, carried for LB City Hall by state Senator Ricardo Lara (D, LB-Huntington Park) was placed on the state Senate's "consent calendar" (where it would receive no Senate floor discussion unless requested by an individual Senator) after it received 7-0 approval in the state Senate's Governance and Finance Committee -- with its only two Republicans (Senators Janet Nguyen (R., SE LB/western OC) and John Moorlach (R., Central OC) joining in.
The Civic Center transaction will let a private developer/operator finance, design, build, operate and maintain a new Civic Center in exchange for city payments of annual increasing sums (per CPI) and conveyance to the private developer/operator of the land under the former LB courthouse for the private firm's development and profit.
[Scroll down for further.]
Long Beach city management previously told the public and the Council that the lease to the private developer/operator would run for roughly 30 years, then 30+ years, and most recently, 40 years. The precise reasons for seeking state legislation to extend the previously indicated time period for city payments weren't explored in detail in the Committee hearing or discussed in any respect on the full Senate floor. The legislative analysis accompanying the bill in the full Senate stated in pertinent part:
SB 562's 50-year limit on a lease agreement for the Civic Center project is shorter than the limits that generally apply to leases on city property. However, 50 years far exceeds the 20 to 30 year terms of bonds or other debt instruments that local governments usually use to finance public infrastructure projects and extends the 35-year maximum lease term established by the 1996 Aguiar bill for local P3 agreements. While allowing for a longer lease term may help ensure that the annual General Fund impact of Long Beach's Civic Center project doesn't exceed budgeted amounts, longer financing periods typically result in higher overall borrowing
costs, which are ultimately paid by the City's taxpayers. It is unclear whether authorizing a maximum 50-year term for Long Beach's public-private infrastructure agreement makes it more difficult to ensure that the public's interest in the Civic Center project is protected for the duration of any agreement.
SUPPORT: (Verified5/7/15)
City of Long Beach
Downtown Long Beach Business Associates
Port of Long Beach
OPPOSITION: (Verified5/7/15)
None received.
Any Senator could have pulled the bill off the "consent calendar" for separate discussion. None did.
[Scroll down for further.]
Advertisement
Advertisement
During Council consideration of the Civic Center transaction, city management contended that LB's 1970's era City Hall had become "functionally obsolete" and argued that the building's seismic issues (known since 2007) gave the city an "opportunity" to create an new Civic Center that it said would provide a better use of public space. LB's current Civic Center includes a large Main Library, which under the new transaction will be replaced by a smaller size library. The new Civic Center will include an area for private development (possibly a hotel) on what is now publicly-owned land under the now-former LB courthouse.
The Port of LB (which operates on state Tidelands) agreed to participate financially in the transaction by agreeing to co-locate its new Port headquarters building as part of the new Civic Center.
The City organized multiple study sessions and public meetings describing the transaction's asserted benefits, but the decisionmaking Council held only one "study session" on the transaction's financial details (with Power Point slides, no accompanying text memo.) The Council invited no formal presentations from independent witnesses or experts regarding seismic retrofits or other alternatives...and during study sessions and Council sessions preceding the final vote, taxpayers were allowed 180 seconds per person at the public speaker's podium.
The Council's December 14, 2014 vote selected a city management-recommended developer/operator and authorized management to enter into an Exclusive Negotiating Agreement with a city management selected developer/operator to pursue final agreement on the public-private partnership transaction.
[Scroll down for further.]
Advertisement
Advertisement
From 2007 to the present, the City didn't seek or obtain bids for a seismic retrofit of its current City Hall (built less than 40 years ago) but cited the building's seismic deficiencies as its basis for pursuing an entire Civic Center rebuild. At least two separate sources -- a Long Beach architect experienced in adaptive reuse retrofits and a Columbia University graduate student -- independently indicated that a retrofit should cost significantly less than the sum city management estimated. The retrofit cost would likely have to be financed using some type of debt bond requiring taxpayer approval; city management said the public-private partnership wouldn't cost more than current operating costs plus a CPI escalator, and required no taxpayer approval.)
Under the Council-approved Civic Center transaction, which cited seismic safety, a new City Hall isn't expected to be completed [last stated city staff estimate] until late 2019.
Former LB Redevelopment Agency boardmember Terry Jensen authored detailed commentary pieces [published by LBREPORT.com] itemizing fiscal grounds for questioning the transaction...and Mr. Jensen says his salient fiscal points have been effectively acknowledged on numerical grounds by city staff.
In the state Senate's Governance and Finance Committee, vice-chair Senator Nguyen (elected in Nov. 2014 to represent a district that includes part of SE Long Beach) raised no substantive taxpayer issues. She stated, "I just want to thank Sen. Lara. This is a, you know, this is an excellent project, private-public partnership, stimulate the economy in the local area, bring jobs and also public benefits as well. I mean these aging buildings, are not, you know, are not safe and you're growing. Long Beach has done a phenomenal job and so I just want to thank, you know, the Mayor, the Council and the Senator for bringing this forweard and so I'll be very supportive of it."
"Thank you," Sen. Lara replied. "Excellent," chair Hertzberg added. The Committee vote was 7-0, which advanced it to the Senate floor where it passed without discussion today (May 18.)
