LONG BEACH, Calif., April 20, 2016 /PRNewswire/ -- The City of Long Beach, CA reached commercial and financial close today on it's $513 million Long Beach Civic Center P3 Project (www.lbciviccenter.com). This is the second large social infrastructure P3 project to reach financial close in the U.S. and potentially sets the stage and model for more P3 municipal facilities in the U.S.
"We are excited to see this deal move forward and to meet the goals set by the City three years ago when it embarked on the Civic Center P3 procurement," said Long Beach Mayor Dr. Robert Garcia. "I'd like to congratulate and thank our City Council, City staff, our partners, and the Plenary led consortium that helped us to reach this important milestone."
The Project delivers a new civic center designed with a high seismic resiliency (<5% PML, 30 day re-occupancy and no loss of life) targeted to achieve a LEED gold or better certification and facilitates a reinvigorated downtown Long Beach including:
- An 11 story 270,000 sqft City Hall
- An 11 story 237,000 sqft Port Headquarters Building
- A two story 92,000 sqft Main Library
- A 73,000 sqft Civic Plaza
- New underground parking with 469 spaces
- Central utility plant
- A three rooftop solar array system to provide up to 25% of the Civic Center energy needs
- Revitalized City park of 4.9 acres.
- Plans for future mixed use development with up to 580 residential units, retail space and up to 200 hotel rooms
"The P3 method was selected because it enabled the City to procure a new Civic Center without any bond issues, tax measures or voter approvals, and included over 100 outreach sessions," noted Michael P. Conway, Director of Economic and Property Development and City lead for the Project. "This method also facilitated design and operational innovation from the P3 developers; provided a high level of 40-year life cycle maintenance for the new Civic Center; and integrated significantly increased private real estate development of the downtown area through the City's contribution of land."
The $513 million financing package arranged by the developer Plenary and it's bankers HSBC, consists of:
- $239 million approximately 43 year term private placement with Allianz
- $213 million approximately 3 year term construction loan from Sumitomo Mitsui Banking Corporation
- $21 million equity investment by Plenary, and
- Contributions of cash and land from the City of Long Beach totaling approximately $40 million in value.
Michael Palmieri, President of p3point, the lead P3 financial advisor to the City on the Project, noted "we achieved a financing that was less than the annual limits approved by City Council in December 2015, while providing additional risk protection during construction. While market conditions helped in part to gain savings, p3point, working closely with the City, helped develop multiple financial structuring elements that saved the City up to $3 million."
The Plenary led consortium included co-developer Edgemoor Infrastructure and Real Estate, operating service provider Johnston Controls, general contractor Clark Construction, and lead designer Skidmore Owings & Merrill, and the City's advisors included p3point, Arup, HOK, BAE Urban Economics, MBI, Sheppard Mullins, KNN and Kutak Rock.
p3point (www.p3point.com) served as lead P3 financial advisor to the City of Long Beach on the $513 million Long Beach Civic Center Project. p3point provides public and private sector clients with experience-based analysis and advice on strategy, feasibility, value for money, procurement/bids, transaction support, structuring, negotiation, financing, valuation, market analysis and restructuring, including for developers and financing sources (banks, infrastructure funds, pension funds, insurance companies). p3point staff are MSRB Registered Municipal Advisors.