BB&K In the News Jul 11, 2016

Long Beach's New City Hall Will be Privately Owned Under Complex Deal

BB&K Partner Seth Merewitz Discusses Public-Private Partnerships with Southern California Public Radio KPCC

Long Beach city officials broke ground for the construction of a new city hall and extensive new civic center Friday, one that will be designed, built, maintained and even owned by a private company.

With its $530 million price tag, Long Beach's new Civic Center is one of the largest of a growing number of major public construction projects in Southern California created via a public private partnership, or P3, deal.

 Putting so much fiscal, design and long-term management in the hands of private companies is seen by advocates as shifting the financial uncertainties of big construction projects to the private sector, even though they don't necessarily reduce the cost of building.

 Plenary-Edgemoor Civic Partners will front the money to build City Hall, a new library and a headquarters for the Port of Long Beach on property near the existing city hall. The project will remake the adjacent downtown Lincoln Park, and include parcels for profit-making enterprises including homes, shops and restaurants.

 "Los Angeles has become the hub for public-private partnerships," said Los Angeles attorney Seth Merewitz, a partner with Best Best & Krieger whose practice represents developers and governments in P3 deals. Big agencies like the Los Angeles Metropolitan Transportation Authority and the city of Los Angeles are considering projects.

"The upside opportunity for the developer is monetizing the land that's in the deal for future development."

These P3 deals can help cities provide public buildings and important structures like convention centers, roads and water treatment plants without actually having to be in the business of operating buildings or complicated plants. That function is hired out to a for-profit entity.

Merewitz said a new wastewater treatment plant in Santa Paula in Ventura County was an example of a P3 that worked well. "That project was delivered ahead of schedule, below budget and was operated very efficiently."

Read the entire article, originally published July 9, 2016 by 89.3KPCC, by clicking here.

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