Experts Explain Huge P3 Project For Long Beach Civic Center

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Jeff Fullerton and Pat West worked together to complete what is believed to be the largest municipal infrastructure public-private partnership on the West Coast, the Long Beach Civic Center, and they came to the Sunstone Stage recently to explain how it worked as part of the Sunstone P3 Education Series.

West was the Long Beach city manager from 2007 to his retirement in 2019. Fullerton was the project director for Plenary-Edgemoor during the Long Beach Civic Center project from 2014 to its opening in July 2019. The project cost $520 million, including construction of a new City Hall, a new Main Library, a new Lincoln Park and HVAC infrastructure for the entire complex. A complementary port headquarters building was constructed at the same time, but is in addition to the $520 million price tag because the Port of Long Beach purchased the building when it was complete.

Fullerton has been part of $6 billion worth of public-private partnerships and now is principal of his own consulting company, Fullerton Partners LLC. West also has a consulting business, Pat West LLC.

Earlier this year, Fullerton and Sunstone Cities CEO John Keisler formed P3 Partners LLC. A separate consulting company, it maintains a relationship with Sunstone Cities.

"Our challenge was the city asked us to find a cost-neutral equation," Fullerton said. "They wanted to find a way to build a new City Hall for no more than what they were paying to maintain the old city hall."

Long Beach's budget was already strained, West said. But the City Hall and the main library had been deemed hazardous if a major earthquake hit, and needed to be replaced.

"Our elected officials had no taste for a bond issue at that time," West told the audience. "We had to find a way to build without raising taxes or going to the ballot."

Fullerton said Plenary-Edgemoor found a way to raise private money for the construction, partially by taking the property where the old city hall sat in exchange, and partially by agreeing to a 40-year commitment to maintain the new buildings.

"It was essentially a DBFOM, Design-Build-Finance-Operate-Maintain, deal," West said. "That made it possible, and transferred a lot of the risk from the city."

Fullerton explained that there is a "risk continuum" for public-private projects that allows a public entity certainty while providing private investors with a fair return. In the Long Beach Civic Center case, Plenary Edgemoor agreed to maintain the buildings and return them to the city in at least 85% of new condition after the 40-year lease agreement was completed.

Other facets of the agreement included allowing the city to move only once, with the new buildings completed before the old buildings closed, and contingencies in case there was significant damage.

The Civic Center is six years old now, and both sides remain satisfied with the agreement, officials say. It could not have happened without the P3 concept, West and Fullerton agreed.

The entire session was captured on video, which will be available soon.

This session is the second in the P3 Strategy Series being presented by Sunstone Cities every other Friday at the Sunstone Stage in Irvine. The next speaker is Irvine Chamber President & CEO Dave Coffaro. Coffaro will appear at 1 p.m. Friday, June 27.

To find out more about this and other events, check out our calendar for upcoming events. Also be sure to sign up for the Sunstone Cities newsletter, and follow us on LinkedIn for more updates.