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Councilmembers Let Civic Ctr Operator Avoid Paying $1 Mil Firm Was Supposed To Pay City; City Mgm't-Negotiated Deal Cites Operator's Economic Development Setbacks But Fails To Reduce Escalating Annual Sums Operator Seeks From Budget-Strapped City...And No Councilmembers Question Or Discuss Taxpayer Impacts Of Deal


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(Feb. 21, 2021, 9:30 p.m.) -- Long Beach City Councilmembers voted 9-0 on Feb. 16, 2021 to let Plenary Properties Long Beach, LLC, the City contracted Civic Center operator/developer, avoid paying ther City $1,000,000 of roughly $7.3 million the firm was supposed to pay after it receives part of the Civic Center area ("mid-block parcel") for the firm's future private development, currently stalled by developer-unfriendly pandemic-related economic conditions.

The mid-block parcel is currently occupied by LB's former City Hall, which the operator/developer is required to demolish. In addition to asking the Council to reduce by $1 million the amount the developer/operator is supposed to pay the City after it receives the mid-block parcel (subject to multiple city conditions), the agenda item asked the Council to approve paying an additional $250,000 to a separate firm [ARUP] overseeing Civic Center work (for a total taxpayer impact of $1.25 million.)

As part of its agendizing memo, city management also discussed plans for a newly designed Lincoln Park (adjacent to City Hall) that the operator is also required to complete (subject to city management acknowledged delays.)

During the Feb. 16, 2021 Council agenda item, no Councilmembers or the Mayor discussed the $1.25 million taxpayer impact of the agenda item. After city management presented a PPT presentation that focused on Lincoln Park, Mayor Garcia moved swiftly to keep attention focused on the park and not the agenda item's $1 million taxpayer cost. Councilmember Cindy Allen (CD 2) and MNo Councilmembers mentioned the item's $1.25 million taxpayer cost. None questioned city management's failure to negotiate a corresponding reduction in the annual escalating sum (now believed to exceed $17 million) that LB taxpayers will now continue to pay the developer/operator despite the pandemic's acknowledged impacts on City budgets. In multiple study sessions, city management has indicated that the City faces COVID-19 City budget shortfalls estimated in the millions.

Ciy management's Feb, 16 agendizing memo describexd the $1 million sum as an "early" payment -- prior to City conveyance of the mid-block parcel to Penary -- based on the following reasoning:

Rather than wait for an undetermined amount of time for the transfer of the property to occur, City staff and Plenary have worked together on a plan to proceed with old City Hall demolition activities now. The unoccupied building, which remains a City asset, is a major liability concern and public health hazard. Plenary and City staff agree that demolishing the building early is a critical and necessary step to reduce risk and address public safety and health concerns associated with the vacant building, which is regularly vandalized even after City staff have increased its security presence at the building. If the City does not proceed with demolition of the old City Hall now, building code requires that utilities be reconnected at a significant unbudgeted cost. In addition, additional security and maintenance services will be required to meet code and operational requirements. If demolition is moved forward, construction-related impacts will be reduced if construction of the new Lincoln Park and demolition of the old City Hall occur concurrently. Proceeding with the demolition of the old City Hall now will not require any upfront City cash. The City's share of the early demolition cost will be an amount not to exceed $1,000,000, which will be deducted from the $7,375,000 million repayment owed to the City...

Councilwsoman Allen made a motion (seconded by Zendejas) to approve the management-agendized action and the Council did so 9-0.

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The Feb. 16, 2021 management memo refers in passing to a May 2020 Council voted action (reported by LBREPORT.com here, note no Councilmembers' discussion during 62 second item] that delayed for up to year the operator's payment of $7.3 million to the City by delaying the date for the City's conveyance of the mid-block parcel to the operator/developer. Under the 2016 Civic Center transaction, Plenary was supposed to pay the City $7.3 million when it receives the mid block parcel, supposed to occur in November 2020. In the May 2020 Council action, city management said issues related to delays in demolishing the old main library justified extending the time period to September 2021. (Economic conditions made private development of the mid block parcel less desirable than Plenary and a prospective developer originally anticipated.)

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City management's Feb. 16, 2021 agendizing memo describes the Fiscal Impact of its requested Council action as follows:

FISCAL IMPACT

The additional contingency budget needed at this time for the Lincoln Park activity and sustainability enhancements and the ARUP support is $1,250,000. This is funded by $1,250,000 in available funds from the Construction and Demolition program. An appropriations increase is requested in the Civic Center Fund Group in the Public Works Department in the amount of $1,250,000, offset by a transfer of Construction and Demolition program funds in the Development Services Fund in the Development Services Department.

The transfer would be funded by a requested appropriation increase in the Development Services Fund Group in the Development Services Department, offset by funds available.

As previously reported, the Lincoln Park annual operating costs are estimated at $450,000 for routine maintenance, $500,000 for security and management services, and up to $700,000 for programming, for a total of up to $1,650,000 annually beginning in FY 22. Potential funding and operating structures, including programming partnerships, are currently being explored.

City staff will return to the City Council with options and a recommendation to address the Park's long-term maintenance and operational needs.

The demolition of the old City Hall is estimated to cost about $8,000,000 and will be largely paid for by Plenary with the City's share of up to $1,000,000. The City's share of the cost is funded through a reduction to the receivable of $7,375,000 due from Plenary to the Civic Center Fund Group no later than September 2022 or earlier at the time the Civic Center Midblock is sold. No cash payment for the demolition will be required.

An appropriation is being requested for the City's share of $1,000,000. As previously discussed with the last Lincoln Park amendment [May 2020], the Civic Center Fund is in a substantial negative budgetary funds available position. This transaction will not change the negative position, but the budgetary funds available will be increased by $6,375,000 million when the Midblock is sold and not by the amount of the previous receivable of $7,375,000 million. When the Midblock sale occurs, the payment from Plenary may not be enough to restore the funds available to a positive status, but staff will be evaluating this along with potential increases to interdepartmental charges (primarily General Fund) to address the negative budgetary funds available status...

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Amnesia file


July 8, 2016: Mayor Garcia, Vice Mayor Suja Lowenthal, Councilwoman Lena Gonzalez and state Senator Ricardo visible. Present in the audience were Councilmembers Daryl Supernaw, Roberto Uranga and Dee Andrews. Also visible are Supervisor Don Knabe, former Mayor Bob Foster, City Manager Pat West, city management level staffers, LB Port officials and a rep from the Civic Center developer/operator The City described the event in a news release at this link.)

Support really independent news in Long Beach. No one in LBREPORT.com's ownership, reporting or editorial decision-making has ties to development interests, advocacy groups or other special interests; or is seeking or receiving benefits of City development-related decisions; or holds a City Hall appointive position; or has contributed sums to political campaigns for Long Beach incumbents or challengers. LBREPORT.com isn't part of an out of town corporate cluster and no one its ownership, editorial or publishing decisionmaking has been part of the governing board of any City government body or other entity on whose policies we report. LBREPORT.com is reader and advertiser supported. You can help keep really 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.

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