Building up a downtown
Long Beach’s $900-million project could be model for other cities
Long Beach City Hall is not long for this world.
The concrete-winged tower looks stout enough, but it’s not someplace you’d choose to be in an earthquake. Dedicated in the bicentennial year of 1976, the high-rise is the centerpiece of an obsolete civic center that the coastal city is busy erasing.
Just a few paces from the old City Hall, a new one is rising as part of a nearly $900-million innovative makeover of the public heart of Long Beach that will also introduce apartments, stores, restaurants and perhaps a hotel.
“A city is emerging within a city,” said Long Beach administrator Sergio Ramirez, who expects the new neighborhood will draw even more people to a reviving downtown.
But the mega project is notable for more than reconceiving the notion of what constitutes a civic center. It is the largest public-private development of its kind on the West Coast and is expected to serve as a model for other cities in the United States.
Officials from other cities including Charlotte, N.C., have visited Long Beach to see the project and learn how it is being financed without raising taxes or biting into the city budget, Ramirez said.
In simple terms, private real estate developers agreed to build $520 million worth of public buildings and a city park in exchange for land where they will build their own profit-making apartments, condominiums and stores. A hotel may be added if there is demand for one.
The private development is valued at more than $350 million.
“Some version of the Long Beach public-private partnership is the future of how public facilities should be built,” said Larry Kosmont, a Manhattan Beachbased development consultant who is not involved with the project. “We expect this model to expand and proliferate in California.”
The first phase of the transformation is underway. A City Hall, Port of Long Beach headquarters and main public library are under construction by development consortium Plenary-Edgemoor Civic Partners on city land that fronts scenic Ocean Boulevard.
Each of the three new structures would have been considered a major undertaking by itself in years past, when public buildings were typically funded by selling bonds, drawing from a city’s general fund or raising taxes.
When those building are complete in 2019, the old City Hall and library will be razed to make way for private development that will bring around-the-clock activity to the government blocks.
“It’s always been our intention to make the civic center feel like it is part of the fabric of downtown, and not isolated from the rest of the community,” Mayor Robert Garcia said.
Steering the civic center makeover is Jeffrey Fullerton, project director for developer Plenary-Edgemoor, a partnership of multiple companies that won a competition held by the city in 2014 to find a builder.
The public-private development model is common in the United Kingdom and Canada, he said, and growing in popularity here as cash-strapped governments scramble to fund needed infrastructure such as civic buildings, utilities and roads. The financial challenges involved can be long term.
“We can usually find the money to build them, but we seem to have trouble finding the money to maintain them,” Fullerton said.
Under the agreement the city negotiated with the developer, Plenary-Edgemoor will design, finance, build, operate and maintain the new civic center for 40 years. The annual cost to Long Beach will be about the same as it was to operate the old civic center and service its debt — $13.5 million. The money will come mostly from the city’s tax-supported general fund and fees such as filming permits.
Long Beach got a big taste of public-private development when the state used the mechanism to build the Gov. George Deukmejian Courthouse by the civic center.
It was the first courthouse in the United States to be built under a then-new public-private partnership system meant to take advantage of the private sector’s access to financing, technological expertise and management efficiency.
The civic center development is more complex, with nine partners and 13 separate agreements. The city will take full control of the civic center in 2059.
“This sets a new standard,” Fullerton said, “for elected officials to think creatively and take risks.”
Plenary-Edgmoor has funded development of the new civic center with private capital, he said, including its own equity and money borrowed from lenders such as large insurance companies and other financial institutions. The city’s annual payments will pay down the debt and cover operating and maintenance costs for the civic center.
Plenary-Edgmoor will also be responsible for the costs of the private development to follow using similar conventional sources. Developers typically pool funding from multiple sources that could include real estate investment trusts, banks and the sale of commercial mortgagebacked securities.
Long Beach’s civic center project is “very ambitious,” said Kosmont, who noted it’s different from the more broad-based infrastructure spending proposal recently released by the Trump administration.
That plan calls for the federal government providing 20% of the funding for projects, with the rest financed by private companies and local and state governments.
The tension in a publicprivate program such as the one in Long Beach, he said, is whether the public entity gets the quality of building and maintenance it expected when it made its deal with a developer.
“The city must make sure it doesn’t accept anything but what it bargained for and paid for,” Kosmont said.
The model makes sense, though, he added, as many cities are increasingly weighed down with pension fund obligations and have difficulty finding money for big-ticket items like infrastructure.
Indeed, in a state routinely subject to earthquakes, it may provide a way to finance critically important seismic retrofits or new construction.
Garcia said a prime motivation for proceeding with a new Long Beach civic center is that the current City Hall and Main Library have outlived their usefulness and are unsafe. Temblors are a special concern to Long Beach, which was near the epicenter of a devastating earthquake that slammed Southern California in 1933.
“The worst part of it is the buildings are not earthquake ready,” he said.
The civic center project is an extension of a years-long building boom in Long Beach. Another $3.5 billion worth of development including the civic center is underway or in the pipeline, the city said.
Zoning regulations adopted five years ago to speed rehabilitation of the historic downtown helped spur renovations of old buildings and encouraged construction of new ones. That includes a 35-story residential tower slated to break ground soon on Ocean Boulevard that will become the city’s tallest skyscraper.
The project also is giving the city the chance to reopen streets that were closed in the 1970s to create the current government campus.
“The former civic center really closed itself off from the city,” Garcia said. “We want folks to feel welcome, not intimidated.”
Chestnut and Cedar avenues, which run north and south perpendicular to the ocean, will be opened to auto traffic again. First Street will pass through the civic center east and west as a pedestrian walkway and plaza.
Offices for the Port of Long Beach, a city department, have been in temporary quarters near Long Beach Airport since 2014.
“Basically, we are a port city,” and port offices belong in the civic center, said Mario Cordero, executive director of the port. More than 400 port employees will move to the civic center when the new headquarters is complete next year.
Lincoln Park, the city’s oldest park, deteriorated in recent years and will be remade as a public gathering spot with planned events, said architect Paul Danna of SOM, the firm that designed the new civic center.
The reinvention of the Long Beach civic center marks a new chapter in the evolution of the city as a resurgent tourist destination, said professor Gary Hytrek of Cal State Long Beach.
“In the 1970s, Long Beach was ranked as having one of the worst central cities in the country,” he said.
Major businesses had left, and big regional chain department stores were closing their doors. Downtown was dotted with dive bars, tattoo parlors and abandoned storefronts.
New housing built in recent years has helped elevate downtown, Hytrek said, though he noted it has come at the expense of “a lot of working poor who can’t afford $2,000 for a one-bedroom apartment.”
Whatever the challenges of the new development, Garcia said he hopes the building boom and new city hall development will contribute to civic pride.
“Long Beach has begun to step out of the shadow of Los Angeles,” the mayor said. “We are a big, independent city.”