View Original Notice ? Long Beach could take next step to turn old City Hall grounds into moderate-income housing
Long Beach could take another step toward eventually converting the old City Hall grounds into a mixed-use development next week by OKing a complex financing structure that would see a state housing agency essentially pay up front to build an apartment project meant for those with moderate incomes, including 100 units for teachers.
The Long Beach City Council on Tuesday, Feb. 1, will consider approving bonds costing nearly $500 million to be issued to fund two 8-story buildings with 290 dwelling units each — 580 in total — all for moderate-income renters.
But the city or its taxpayers wouldn’t foot the bill — at least initially.
Rather, the California Community Housing Agency would issue the bonds to Plenary Properties, which would eventually pay the agency back with the money it makes from the project, said city spokesman Richard De La Torre.
It’s all part of a plan, spanning years, to rebuild the portion of downtown Long Beach that houses the city government.
After a seismic study in 2013 showed the old 14-story City Hall was at risk of damage from a moderate earthquake, talks began in 2014 to use a public-private partnership to build a new Civic Center. That complex, which includes City Hall and Port of Long Beach headquarters, opened in 2019. Another portion of land nearby saw the Billie Jean King Library rise up.
The site of the former Brutalist City Hall, meanwhile, is slated for a mixed-use development.
Plenary, the private part of that partnership, built the new City Hall in exchange for the old building’s land.
Plenary began demolishing the old City Hall building in October, and has proposed the two new residential buildings, which would also have ground-floor space for retail stores and restaurants, a city staff report said. The housing project, which the city’s Planning Commission approved in 2020, will also have a mixture of below- and above-ground parking structures, totaling 885 stalls.
Between the two buildings, as proposed, there would be four retail spaces and one grocery store space, the staff report said.
And all the dwelling units, as proposed by Plenary, would be meant for those making a middle or moderate income, from 81% to 120% of the median area income.
More than three-quarters of the units — 460 — would be for households with incomes up to 120% of the AMI based on state calculations. The other 120 units would be for those at 110% of AMI based on state income limits.
The developer has also proposed other benefits to help those who will live or shop in the building, the staff report said, including public transit credits for teachers, providing on-site security, and a free space for public, educational, art, or nonprofit use.
The council, however, has yet to approve a bond-funded new moderate income housing project, bouncing such a proposal back to City Manager Tom Modica and his staff at a recent meeting.
Council members at that meeting wanted more clarity on how the city could acquire developments for moderate-income housing, but were satisfied with the approach for newly built projects, like the Plenary one, De La Torre said.
Plenary wants to use the program that was drafted and pitched that idea to the council at its Tuesday, Jan. 18, meeting.
The financing plan is complex.
First, the California Community Housing Agency, a joint powers authority, would issue the bonds, paying for construction, land acquisition and other costs.
Plenary would then sell the property to the agency and the two would work with a property manager to run the housing complex.
Plenary would also pay back the bonds with the money it makes from the developments, once its up-and-running, De La Torre said.
The bonds would be tax-exempt and would run about 30 to 40 years, according to an analysis from the city’s consultants, HR&A Advisors.
And after 15 years, the city would have the option to buy the property at a price that could pay off the remaining bond debt, dues, fees and transaction costs, the analysis said.
The city, however, is unlikely to do so as early as year 15 because most of the bond principal would still be outstanding and require repayment, De La Torre said. But if the city did choose to do so, it could use any available local, state, federal or borrowed funding, he said.