1 STAFF REPORT
DATE: April 11, 2023
TO: Justin Hess, City Manager
FROM: Elizabeth Goldman, Library Services Director
SUBJECT: Update on the Burbank Civic Center Project
RECOMMENDATION
Note and file.
BACKGROUND
Burbank’s Civic Center includes City Hall, the Community Services Building (CSB), the Administrative Services Building (ASB), the Police and Fire Headquarters (Police), the Central Library (Library), and parking. In 2003, City Council approved Planned Development 2002-02 (PD) and a Development Agreement (DA) establishing a Civic Center Master Plan to facilitate the development of CSB, ASB replacement, Library replacement, and open space. The only element that was completed was CSB, and the DA expired in 2018.
The Burbank Central Library was built in 1963, and the City first identified the need to renovate or replace it in 1989. Its only significant updates came in 1992, with new carpet and paint, along with some systems upgrades over the years. I n 2003, Measure L was approved by m ore than two -thirds of Burbank voters to fund Library renovations contingent on securing State matching funds, which were never successfully obtained.
ASB houses the Financial Services Department and Management Services Department in a former bank originally constructed in 1966. The building was seismically upgraded with interior improvements in 2014.
In 2018, Burbank voters passed Measure P, a local Transactions and Use Tax (TUT), along with an advisory measure that dedicates 50% of the TUT revenues to the Municipal
2 Infrastructure Fund (Fund 534) for general City (non -utility) infrastructure improvement and maintenance programs.
In 2020, the City engaged consultants in an updated study of options for the Library, including public input on priorities for use of space in a future building. In 2021, the City Council received the study, “A Vision for the New Burbank Central Library” (Library Vision Study), and directed staff to pursue explorations of a plan to finance construction of a replacement Library.
Also in 2020, the City initiated work on the Downtown Burbank Transit-Oriented Development Specific Plan ( Downtown TOD Specific Plan ), which covers 965 acres encompassing two existing adopted planning areas (the Burbank Center Plan and the North San Fernando Master Plan ), as well as downtown Burbank and the downtown Metrolink station. The Downtown TOD Specific Plan process analyzes land use, infrastructure, transportation, pedestrian and bicycle amenities, and opportunities for new housing and other infill development. Evaluation of redevelopment opportunities within the Burbank Civic Center project area is included in the Downtown TOD Specific Plan analysis.
In September 2022, the City Council adopted the 2021-2029 update to the Housing Element of the Burbank2035 General Plan (Housing Element). The Housing Element update includes an analysis of needs, constraints, and resources in developing a housing plan for the 8 -year period. The properties within the B urbank Civic Center Project area have been identified as housing opportunity sites in the Housing Element, which helps to facilitate new housing production to meet the City’s state -mandated Regional Housing Needs Assessment (RHNA) allocation of 8,772 units.
DISCUSSION
The proposed Burbank Civic Center Project (Project) represents a transformative opportunity to meet City Council goals and community needs while building a thriving downtown neighborhood in a sustainable and fiscally responsible way.
Project Overview and Financial Feasibility
The Project proposes construction of both public and private assets in the Civic Center area. This includes:
• Public assets
o A replacement Central Library of approximately 65,000 square feet o Open space of approximately 52,000 square feet
o Replacement office space for ASB of approximately 20,000 square feet o Parking spaces to support the public assets
3 o Associated infrastructure improvements supporting the public assets • Private development
o Development of opportunity sites (identified in the Downtown TOD Specific Plan and 2021 -29 Housing Element update) with approximately 475 units of new housing, of which 20 % are proposed to be affordable to lower income households
o Approximately 15,000 square feet of commercial space
o Parking spaces associated with the residential and commercial uses o Associated infrastructure improvements supporting the private assets
A conceptual site plan (Attachment 1) was developed as part of the feasibility analysis in 2022 to identify how the elements might fit on the available sites. This plan reflects only one option. Ultimately, the City will define the Project elements it requires, as well as parameters, specifications, and constraints to Project development. Within that, development partners may propose ways to achieve Project goals that arrange elements differently on the sites.
The Project is proposed to be developed using a public -private partnership (P3) model .
The P3 model provides the following benefits to the City, described in greater detail in a presentation at the August 9, 2022, City Council meeting:
• Transfers risk from the City. This includes construction -related risks, risks related to the long-term condition of the asset, and financial risks. • Optimizes costs by coordinating across the lifecycle of the assets from the earliest project stages.
• Creates incentives to build and maintain the assets on schedule and to established standards, ensuring assets remain in good condition over many decades. • Leverages public investment to initiate significant private development , with revenue from the private development offsetting public infrastructure costs, and spurs additional private investment in the area.
On September 13, 2022, staff presented an analysis of the Project’s financial feasibility to the City Council based on the Project elements described and the use of the P3 model.
The estimated cost of the public assets is $132.8 million in 2023 dollars , reflecting a
13.7% increase in the California Construction Cost Index between the first quarter of 2022 and the first quarter of 2023. All financial forecasting assumes inflationary increases.
In the P3 model, the City’s development partner (Developer) would most likely obtain the financing. In addition to constructing the public assets for the City, the Developer would have responsibility for maintaining the public assets for a 30 -year period, returning them to the City at the end in a condition that supports another several decades of use. The 4 exact elements of this maintenance contract – which can span from major systems replacements only to being inclusive of routin e maintenance operations – are still under analysis.
Over this 30-year time period, the City would pay the Developer an annual sum to cover the initial capital costs, maintenance, and equity payments. This commitment is proposed to be funded primarily by use of 25 % or less of the annual revenue from Fund 534 over this 30-year period. The Project is consistent with the City’s intended use of Fund 534 to improve the condition of Burbank’s public buildings like libraries , while preserving a healthy portion of Fund 534 for other maintenance and infrastructure needs.
Payments wou ld be made as a combination of a single milestone payment of approximately $34 million at completion of construction of the public assets, plus annual payments over the following 30 years. The estimated annual payments will be approximately $7.8 million, including both debt and equity payments, and operations and maintenance. This will be partially offset by the ground rent on the public property on which the private residential units are built. Once all housing is complete, ground rents are anticipated to total $2 million annually.
The City is actively seeking grants and other funding to offset construction costs. In September 2022, the City Council created a reserve account and allocate d an initial amount of $10 million. These funds demonstrate City Council commitment to provide matching funds for a library infrastructure grant currently available at the State level. The City was not successful in obtaining funding in the first round of t hat grant, which prioritized renovations over new construction, but staff will submit an application under round 2 in spring 2023.
Community Engagement and Planning Progress
Since September 2022, staff ha s continued to develop the Civic Center plan, incl uding work in the following areas.
Community Engagement
In order to obtain input from the general public as well as key stakeholders, staff held three public meetings in December 2022 : two in-person at the Central Library and one online. Sessions requested feedback on Project elements (library, open space, housing, parking/transit, and sustainability). Staff created a website, www.burbankciviccenter.com, which has Project information and invites residents to complete a survey regarding the same areas of focus.
5 In addition, staff has solicited community input through presentations to representatives from numerous City Boards and Commissions, as well as nonprofit organizat ions and community groups. This work is ongoing.
Space programming
The Developer will eventually be identified through a competitive procurement process.
To develop robust procurement documents, staff from across City departments have worked to identify specifications for space requirements. This includes analysis of public and staff spaces within the library; office space needs for the Finance and Management Services Departments; and consideration of the open space. Along with public and staff use, IT and building maintenance considerations are part of this workstream.
Sustainability
Staff and consultants are evaluating a range of sustainability and resilience considerations for the project. These were assessed based on a combination of factors including cost -benefit, City leadership , and community benefits. While the Project sustainability strategy, like other work being presented, is still being refined, work to-date has identified areas of focus and some potential measurement programs to consider.
Project sustainability and resilience is being assessed in the following areas:
• Use of on-site renewable energy (e.g., solar panels)
• Battery storage (to allow the library to maintain partial power during an outage while serving as a cooling center or supporting emergency operations) • Reduced operational carbon (energy from carbon-emitting sources used in operations)
• Use of sustainable materials with reduced embodied carbon (emissions produced by the manufacture, transport, maintenance, and disposal of materials) • Reduced potable water use ; onsite stormwater management; use of native or drought-tolerant plants
• Improved health and well-being features such as natural light and green spaces
Potential sustainability tracking systems include Leadership in Environmental and Energy Design (LEED) v4 Platinum, the most recent version of a widely recognized system for assessing the sustainability of a building’s design and construction; and the International Living Future Institute (ILFI) Core Green Building Certification, which considers construction and operations.
Generally, staff recommends aiming for sustainability goals above the baseline required by the Califor nia Energy Code, the California Building Code with Burbank local 6 amendments, and other code and legislation, while maintaining a focus on strategies that create clear benefit to the City and community relative to their cost.
Historic Considerations
Staff engaged consultants in a review of historic considerations related to the current Burbank Central Library, constructed in 1963, and Burbank City Hall, which is listed on the National Register of Historic Places.
Consultants identified a number of features that make the Central Library potentially eligible for listing as a historic asset on local, state, or national levels. The building has been used as a library continuously through its history and maintains architectural features – primarily on the exterior walls adjacent to Olive Avenue and Glenoaks Boulevard – that distinguish it as an example of Midcentury Modern style. These elements will be considered as the Project description is refined and potential Project alternatives are identified with a Developer.
Historic considerations for City Hall relate to the height, form, and orientation of any structure that may be buil t in its close proximity . Because the Project includes the possibility of development in the parking lot and parking structure behind City Hall, potential impacts to City Hall’s historic designation will be evaluated as the final Project design is developed.
Surplus Land Act
Staff engaged consultants in an analysis of the potential impact of the Surplus Land Act (SLA) on development options. This State law approved in 2019 requires public agencies to carry out a process to offer surplus property for the development of affordable housing before the property can be used for other purposes. In the case of the Civic Center Project area, land is not currently surplus; it currently houses structures that provide government functions and public use, including the Central Library, ASB, and related surface and structure parking . If the Project proceeds with a private development component, the private development portions of the Project may require the City to follow the SLA process.
An SLA process will be incorporated into the Project timeline to ensure compliance with State law, and staff will consult with the State Department of Housing and Community Development as plans progress.
7 Coordination with the Downtown TOD Specific Plan
The Project is being developed in alignment with the Downtown TOD Specific Plan , currently underway, which intersects with the Civic Center Project in several areas.
The Downtown TOD Specific Plan provides the opportunity for Project -related land use and infrastructure considerations to be considered in the context of anticipated development in the larger Downtown TOD Specific Plan area , which includes the Civic Center Project sites. The Downtown TOD Specific Plan identifies the potential for the development of up to 9,537 new housing units in the entire planning area and will evaluate the impacts of this development on City utility capacity (water, power, sewer) , parking, and traffic (vehicle miles traveled and circulation) . The Downtown TOD Specific Plan Program Environmental Impact Report (EIR) will analyze this information, assessing the impacts to the entire specific plan area, which includes the Civic Center Project area, thus minimizing additional environmental review required for the Civic Center Project under the California Environmental Quality Act (CEQA).
In addition, the Downtown TOD Specific Plan proposes changes to the Burbank2035 General Plan Land Use Designations and develops objective development standards to streamline the development of housing , including affordable and workforce housing, on properties within the Downtown TOD Specific Plan Area, especially those that have been identified as housing opportunity sites in the Housing Element. Currently, the General Plan land use designation and zoning for properties within the Civic Center Project site does not allow housing. Therefore, the changes envisioned in the Housing Element and proposed in the Downtown TOD Specific Plan are necessary to facilitate the Civic Center Project as currently envisioned.
As a result, staff has coordinated schedules with the Downtown TOD Specific Plan such that the Civic Center Project development partner procurement process will not start until such time as there is some clarity on land use designations and related updated development policies.
Next Steps and Procurement Process
Based on input from City Council and ongoing community engagement, staff will continue to refine plans with the goal of incorporating detail into procurement documents.
Staff anticipates returning to City Council later in 2023 with requests to initiate th e procurement process based on an updated Project financial feasibility analysis. Once a preferred development partner has been selected as the result of these processes, staff will enter into an exclusive negotiating period with that developer. During this time, there 8 will be an additional period of community engagement related to Project design. The resulting contract and related Project design, financial plan, and budgetary commitments will be returned to City Council for final approval before construction begins.
A potential timeline through construction is as follows, with all dates subject to change:
1. Spring and Summer 2023: Continue research, analysis and preparation of Project description, developer procurement documents, and SLA noticing
2. Fall 2023: Initiate Developer procurement process following release of Downtown Specific Plan draft EIR
3. 2024-25: Continue procurement; select a preferred partner and negotiate
4. 2025-27: Carry out financing, design, and construction
ENVIRONMENTAL REVIEW
This report is an informational update to Council only, and therefore receipt of this report has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and as such, is not a “project” subject to the requirements of the California Environmental Quality Act (CEQA) 14 Cal. Code Regs § 15378.
FISCAL IMPACT
There is no fiscal impact associated with this report.
CONCLUSION
The proposed Burbank Civic Center Project represents a transformative opportunity to meet City Council goals and community needs while building a thriving downtown neighborhood in a sustainable and fiscally responsible way.
Staff analysis continues to demonstrate the viability of the Project within the context of the Downtown TOD Specific Plan and other City planning efforts, and using the P3 model, with funding supported by Fund 534 and other sources. The Project elements allow the City to move long -delayed and much -needed improvements to public assets forward while preserving the availability of funding for other infrastructure needs. The Project’s housing component not only supports workforce and affordable housing production goals and creates a revenue stream but adds to the energy of the downtown ar ea, providing residents with desirable amenities and supporting local businesses through increased demand for services. Staff will return later in 2023 with recommendations for specific City Council actions related to the Project.
ATTACHMENTS
Attachment 1: Civic Center Project - Conceptual Site Plan