Long Beach Civic Center Reaches Financial Close
SAN FRANCISCO, CA Arup, the global interdisciplinary consulting and design services firm, announces that the city of Long Beach, California, and Port of Long Beach has reached financial close for the $520-million Long Beach Civic Center Project. This pioneering project in the U.S. public-private partnership (P3) market demonstrates the capabilities of the public and private sectors to develop innovative solutions. The project's unique combination of public infrastructure and private mixed-use real estate development under one integrated design-build-finance-operate-maintain procurement is a first in the U.S.
Arup served as lead advisor to the city and Port of Long Beach, providing comprehensive advisory services integrating financial, commercial, real estate, design, engineering, and cost consulting. The Arup team included HOK for architecture consulting, BAE for real estate economics, and MBI Media for outreach. Sheppard Mullin provided legal advice to the owners and worked closely with Arup.
"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 Mayor 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."
Plenary Group is the lead P3 developer, sole equity provider and financial arranger for the consortium. Other consortium members include Clark Construction, Edgemoor, Johnson Controls and SOM. Allianz, in a private placement, is providing $237 million in long-term financing. Sumitomo Mitsui Banking Corp. is providing a $213-million-loan. Long Beach would contribute $11.8 million in cash and land valued at nearly $30 million. Plenary is contributing $21 million in equity.
"Arup has been a real force behind our success with this project, helping us move it from a hunch to reality in such a short timeframe," said Michael Conway, Director of Economic and Property Development for the city of Long Beach. "They have shown great skill in helping the city and port navigate a very complex transaction, managing the entire process from the RFP to the end of negotiations. We picked the right advisor."
"A significant value added for the city is how the P3 model accelerated what would more conventionally have been a three to five year project development process using traditional project delivery methods to a two year process," said Orion Fulton, Arup's Project Team Leader. Arup was recently retained to manage the design and construction process for the city and the design for the Port. Now construction begins and the next phase of this exciting project is being launched.
According to Ignacio Barandiaran, Arup's leader of transaction advice team, "We congratulate the City and the Port of Long Beach in achieving this notable milestone. The project is an investment in Long Beach's downtown that will generate jobs, attract new residents, and generate new tax revenues."