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Should Taxpayers Spend Up To $4 Million Upfront For Consultants/Outside Lawyers To Prepare Documents So Three Developer Groups Can Say How Much They'd Charge City To Build/Operate New Civic Center For Their Profit? City Hasn't Sought Bids/Offers For Less Costly City Hall Seismic Retrofit But Council Will Vote -- On Dec. 3 -- Whether To Bind Taxpayers Contractually To Arguably More Costly Course

Schipske was sole dissenter in October



(Nov. 30, 2013, 8:50 a.m.) -- In a critical vote that could trigger a long-term taxpayer course of events, city management has agendized an item for the December 3, 2013 City Council meeting seeking approval to enter into a contract (text not provided) to pay a consultant group (identified only by overall name) up to $3.25 million for up to three years to prepare a "Request for Proposals" (RFP) to enable three pre-selected, developer groups to submit proposals to tear down City Hall and build, operate and maintain a new City Hall/Civic Center for their profit for the next 30+ years.

Management's agendizing memo (text below signed by Mike Conway, Director of Business and Property Development) also informs the Council that an additional $750,000 will be separately requested at a future Council meeting to hire outside legal counsel to facilitate the transaction to occupancy.

And management's memo states the $4 million contractual sum may increase: "Issues may arise in the development of the RFP or analysis of submittals that require additional financial or other consulting assistance. If so, staff will come back to City Council with an additional funding request."

Management's memo says the contract to prepare the RFP would be with Arup North American Limited, of Los Angeles for a team whose unnamed members include WBE/DBE/SBE [Womens Business Enterprise, Disadvantaged Business Enterprise, Small Business Enterprise and Local]) for a first year payment of $987,798, with a 10% "contingency," for a total of $1,086,578, plus two optional one-year renewals "for financial, architectural and community outreach consultant services related to the preparation and issuance" of the RFP.

The upcoming Dec. 3 Council vote is a critical decision point because once the City pays out large sums upfront, current and/or future Councils would face a disincentive to pursue an arguably less costly retrofit of City Hall (whose seismic issues were initial asserted basis for now pursuing an entire Civic Center rebuild.)

Since 2005-2007, Long Beach city officials have had in their possession reports indicating City Hall seismic issues, but to date neither Mayor Bob Foster (who took office in mid-2006) nor past nor present City Councils have directed preparation of a Request for Proposals seeking bids from multiple firms to retrofit City Hall. (The City of Los Angeles seismically retrofitted its City Hall, which was built in the 1920's and many of Long Beach's prominent downtown buildings were likewise built decades ago.) Long Beach City Hall and Civic Center, built less than 40 years ago by acclaimed architects using a design then-hailed as progressive, is now portrayed by some Councilmembers as undesirable and city management calls City Hall "functionally and technically obsolete."

City officials have been vague on how much Long Beach taxpayers might be asked to pay a private operator to build/operate/maintain the new Civic Center; Mayor Foster and some supportive Councilmembers have previously described the sum as "not much more than we pay at present." The proposed financial arrangement parallels that used to produce and operate the new Long Beach courthouse, a visually striking project that has drawn criticism over costs that resulted in cut-backs to other judicial projects and services but has been defended as efficient and successful by state judicial officials.

Under "Fiscal Impact," city management's memo states in pertinent part:

Consultant costs for assistance in the preparation and issuance of an RFP, review and analysis of the submittals, selection of the preferred proposer and support to achieve financial close are $987,798. To address and quickly manage unanticipated costs, a contingency amount of 10 percent of the base contract amount, or $98,780, is requested for a total not to exceed $1,086,578. Funding for the contract expense is available in the Civic Center Fund (IS 380) and an appropriation increase is requested as part of the recommended action. Issues may arise in the development of the RFP or analysis of submittals that require additional financial or other consulting assistance. If so, staff will come back to City Council with an additional funding request. Legal assistance, estimated at $750,000, will be needed and separately requested by, the City Attorney...

Long Beach Civic Center RFP Consultant Agenda Item (Dec. 3, 2013)

On Oct. 22, 2013 the Council voted 8-1 (Schipske dissenting) directing management to prepare an RFP based on a city management memo that said the cost to so would be "significant" but didn't specify a dollar amount. Prior to the Council meeting, LBREPORT.com inquired about a general dollar figure or range and Deputy City Manager Tom Modica indicated that management expected costs to be approximately $500,000 to $700,000 although actual costs weren't then known.

City management's agendizing memo doesn't provide the proposed contract text [a practice routine in Long Beach although a number of other cities disclose proposed contract texts for large transactions, enabling transparency and contract modifications.] At present, it's unclear under what conditions, if at all, and at what costs the City might extricate itself from the now-proposed RFP project contract if a future Council were to seek a less costly alternative. By mid-July 2014, five current Councilmembers (Garcia, DeLong, Schipske, Johnson and Neal) will no longer be voting Councilmembers; six Council incumbents (includes O'Donnell and Lowenthal but excludes DeLong) are now seeking higher offices and after mid-July 2014 incumbent Mayor Foster will be out of office.

At the Oct. 22, 2013 Council meeting, multiple speakers urged retrofitting LB's current City Hall and nearly no public speakers directly supported tearing down/outsourcing the Civic Center.

On Dec. 3, city management will seek contractual approval to pay a consultant group $1.086 million for its first year; management says the sum would come from the Civic Center Fund, an internal service fund which collects revenue from each city operation that uses the Civic Center (and includes both General Fund and non-General Fund operations.) The agendizing memo doesn't indicate for what purposes the roughly $1 million proposed to pay the consultants is now being used, and doesn't indicate from what sources the roughly $1 million for the contract's renewable/optional second and third years would be paid.

The Council's Oct. 22 majority voted approval (8-1, Schipske dissenting) to prepare a Request for Proposals came on a motion by Councilwoman Suja Lowenthal, seconded by Vice Mayor Robert Garcia. Lowenthal said building a new Civic Center was a "once in a lifetime" opportunity. Vice Mayor Garcia said the new Civic Center would be a bold use of public space for multiple purposes.

In a power point presentation, city management acknowledged (consistent with its agendizing memo) that its most recent Seismic Report recommends either rebuilding or retrofitting LB's current City Hall. As in its agendizing memo, city management's power point slides listed cost estimates but without data sources cited or calculations explained to reach its conclusion that the current City Hall, build in the mid-1970's, should be rebuilt instead of retrofitted.

Several Councilmembers then cited the seismic figures as their basis for seeking to proceed rapidly. Garcia argued that delays might increase the ultimate cost. Asked by Councilman James Johnson where the Seismic Report is, city management said it's currently in draft form but may be finalized in about two weeks.

City management acknowledged that despite seismic reports dating back to 2005-07, no Request for Proposals to retrofit City Hall has been issued. A number of architects from local firms subsequently testified at the Council podium that they could retrofit City Hall and make improvements to the Main Library for less than City Management's memo estimated and wondered aloud why they hadn't been asked.

At the suggestion of Councilwoman Lowenthal, the Council motion added the offer of a stipend to have the prevailing applicant reimburse much of the costs incurred by the non-prevailing applicants of preparing and submitting materials in response to City Hall's Request for Proposals. Lowenthal said, and all three applicants echoed at the Council podium, that this would prompt more vigorous competition for the proposed project.

Councilwoman Lowenthal called building a new Civic Center a "once in a lifetime" opportunity. Vice Mayor Garcia said it would be a bold use of public space that could be used by multiple groups for multiple purposes.

Councilman Gary DeLong asked how much the stipend might be, and at one point inviting the three applicants to the podium to state how much they estimate their costs of responding to a City Hall RFP might be. When the representatives variously cited rough estimates of between $1-$2 million, DeLong proposed offering a stipend of up to $500,000 with the possibility of raising the amount with future Council approval.

Mayor Foster called on Councilwoman Gerrie Schipske last (after multiple Councilmembers had spoken in support of management's proposed tear down/rebuild.) Councilwoman Schipske had a lengthy list of questions for city management about the proposed transaction, seeking public responses regarding management's assertions, including its cost estimates and asserted figures used to justify a tear down/rebuild scenario instead of a retrofit.

Public comment followed.

Amid a vigorous emailed and in-person presence by the Long Beach Public Library Foundation, several Councilmembers and Mayor Foster publicly ruled out relocating the Main Library elsewhere and stated their support for rebuilding an enhanced, updated Main Library as part of a Civic Center rebuild. A representative testifying for the Long Beach Public Library Foundation said the group appreciates Council support for an upgraded Main Library but hasn't taken a position at this point on a City Hall rebuild versus a retrofit.

Representatives of Long Beach Heritage testified in opposition to a City Hall tear-down/rebuild and in favor of a retrofit...with one of its speakers noting that Los Angeles retrofitted its City Hall (which had been built in the late 1920's) and noting that Long Beach City Hall was built in the mid-1970s.

Retired Deputy City Att'y Jim McCabe urged caution on the proposal to rebuild City Hall citing a lack of transparency (including refusal to release Seismic Study's Executive Summary to LBREPORT.com) and also voiced the opinion that large sums involved in the transaction were in his view potentially problematic.

LBUSD Board President John McGuiness [incumbent who has endorsed Robert Garcia for Mayor] provided a written statement supporting the tear down/rebuild/outsourcing Civic Center scenario.

In a separate item which followed, agendized by Councilmembers Patrick O'Donnell, Al Austin and Steve Neal, a Council majority (8-1, DeLong dissenting) approved asking city management to incorporate a "Project Labor Agreement " into release of the Request for Proposals for the new Civic Center. The item brought testimony in support from members of several trade unions.

Further to follow on LBREPORT.com.



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