City Staff Hasn't Appraised Former Courthouse Land, Ocean Blvd/Magnolia, It Wants Council To Convey To A Private Civic Center Developer/Operator, Will Let Proposed Developer/Operators Value It To Suit Their Desired Uses/Densities And "Bridge Any Financial Gaps" Between City Payments And Developer/Operator Costs
(Oct. 26, 2014, 7:55 p.m.) -- LBREPORT.com has learned that the City hasn't appraised the public property at Ocean Blvd./Magnolia Ave. (former courthouse) that it proposes that the City convey to one of two competing developer/operators as part of a "public private partnership" Civic Center rebuild transaction. A City Council vote on the proposed transaction could come as early as the upcoming holiday period (late November/early December.)
Instead of listing the property to seek a fair market sale price, or seeking arm's length third party appraisals, city staff is letting the two remaining/competing private developer/operators value the public property according to their desired private uses and densities...and their assigned "value" [which may or may not be different than an open market listed/sale price or an arm's length third party appraisal] is being used to bridge any financial gaps between the $12.6 million base annual amount that LB taxpayers would pay annually (plus an annual CPI escalator) compared to the developer/operator's cost to build the facilities.
[Scroll down for further below.]
The information comes via retired LB Deputy City Attorney Jim McCabe, a 3rd Council district constituent, who on Oct 13 met with his Councilmember, Suzie Price, to inquire about the proposed Civic Center transaction. Mr. McCabe posed questions to which Councilwoman Price's office obtained responses from city staff.
The response reported here isn't that of Councilwoman Price. It is the response of city staff.
City staff's answers were emailed to Mr. McCabe by 3rd Council district office Chief of Staff Julie Maleki on Oct. 15; Mr. McCabe shared the responses with LBREPORT.com and we publish the salient portion.
Mr. McCabe sought paperwork that provides assessment value of parcels that the developer/operator would receive in the transaction and whether the value was appraised accurately:
[city staff response] The City has not appraised the property that will be conveyed for private development. Instead, it is valued by the developers according to their proposed uses and densities. The value of the property is intended to bridge any financial gaps between the $12.6M annual payment and the cost to build the facilities.
City of LB graphic
Through the actions of a previous Council under now exited Mayor Bob Foster, the City Council (Schipske dissenting) approved spending and/or allocating over $1 million to request proposals from three pre-selected developer/operators (one of whom dropped out of the running.) A Council vote on whether to enter into a contract to proceed with the transaction had been expected as early as July 1 (under the former Council/former Mayor)...but city staff said the proposals required additional staff analysis.
In September 2014, the Council held a study session that presented information already publicly presented. On October 14, 2014 -- one day after Mr. McCabe's meeting with Councilwoman Price, and one day before city staff provided its response indicating it had no appraised value for the Ocean Blvd./Magnolia Ave. property -- the Council heard high visibility presentations from the two remaining competing developer/operators. [LBREPORT.com doesn't recall the issue of the valuation of the Ocean Blvd/Magnolia Ave. property being discussed or questioned by any Councilmembers on Oct. 14.]
The two dueling developer/operators both proposed to cut the Main Library's size, put a hotel/commercial/residential uses on what's now public land, and a new Port of LB HQ could also be part of the P3 transaction.
City staff has currently scheduled the following Civic Center related meetings:
10/27: Bidder presentations at Port Interim Headquarters (4801 Airport Plaza Drive Long Beach, CA 90815 ) beginning at 6PM
11/11: Study session at Houghton Park (6301 Myrtle Ave, Long Beach, CA 90805 ) starting at 4PM, seeking public comments
There will also be two "Open House" sessions where bidder models will be displayed:..although the Council WON'T be deciding on the models but rather on a preferred developer/operator team to pursue the public-private-partnership project transaction...with the actual design to be finalized later.
"Open House" 11/1 (9 am - 12 pm) Admiral Kidd Park (2125 Santa Fe Ave Long Beach, 90810)
"Open House": 11/8 (12 pm - 3 pm) Bruin's Den at Rec Park (4900 E. 7th St.).
Background
The revelation that a private developer/operator would end up with the prime located public land at Ocean Blvd/Magnolia for private development was made clear by city staff on February 1, 2014 and reported at the time by LBREPORT.com. Mike Conway, Director of the City's Department of Business and Property Development, fielded a floor question from Sara Myers, Exec. Dir. of the LB Public Library Foundation, at a public meeting organized by the City.
Mr. Conway, Feb. 1, 2014
Feb. 1, 2014 city organized meeting
Ms. Myers
Ms Myers: ...So I know we've been saying that [the cost to the City would be] $12.6 million [annually] with the CPI, no additional cost to the City. And then I know that [retired Councilwoman] Rae [Gabelich] seemed to raise that of the 15.8 acres [in the Civic Center project area] that there could be a portion of that, let's say for this discussion, 7 acres, that the developer puts private development on. After the 30 years, I need to clarify was all of it given back to the City or was only the parts with the park [Lincoln Park], the library [Main Library] and the City Hall given back to the City, and the part with the private development that they keep forever?
Mr. Conway: The expectation is that private development no longer is City property.
Ms Myers: OK, so in a sense, I thought I heard that right, so in a sense it's $12.6 million plus CPI plus in a sense we are selling a portion of that acreage to be determined by the developer to the developer.
Mr. Conway: That is correct.
Ms Myers: And we don't know for this meeting, and I'm wondering if Amy [Bodek] knows what the current value of the 15.8 acres is in today's [shakes her head "no"] OK so we don't know that yet...
