1 STAFF REPORT
DATE: November 19, 2024
TO: Justin Hess, City Manager
FROM: Ken Berkman, Public Works Director
SUBJECT: Update on the New Burbank Central Library and Civic Center Project
RECOMMENDATION
Note and file.
BACKGROUND
The City of Burbank’s Civic Center includes the Community Services Building (CSB), Administrative Services Building (ASB), Police and Fire Headquarters (P olice/Fire HQ), Central Library (Library), City Hall, and associated parking areas. In 2003, City Council (Council) approved a Planned Development (PD) for the Civic Center, which included the construction of CSB, replacement of ASB, replacement of the Library, and the addition of new open space. However, the only element of the PD completed was CSB, and the PD expired in 2018.
The Library, built in 1963, was first identified as needing renovation or replacement by the City in 1989. The building’s only significant updates occurred in 1992, which included new carpet and paint, followed by additional systems upgrades throughout the years. In 2003, Measure L was approved by m ore than two -thirds of Burbank voters to fund a replacement l ibrary, contingent on securing a State Library Grant , which w as never successfully obtained.
The ASB houses the Financial Services Department and Management Services Department in a former bank building constructed in 1966. The departments moved into the building in 2001, which was intended to be a temporary location until the new ASB and replacement Library were constructed , neither of which were ever completed . The building was seismically upgraded with interior improvements in 2014.
2 In 2018, Burbank voters passed Measure P, a local Transactions and Use Tax (TUT), along with an advisory measure dedicating 50% of TUT revenues to the Municipal Infrastructure Fund (Fund 534) for general City (non -utility) infrastructure improvements and maintenance programs. In 2020, the City engaged with consultants to complete an updated study of options for the Library, including gathering public input on space-use priorities for a future building. In 2021, Council received the study, A Vision for the New Burbank Central Library (Vision Study) and directed staff to explore 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 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 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 Civic Center area is included in the Downtown Specific Plan analysis.
In Fall 2021, the City contracted with the engineering consulting firm ARUP to assess the proposed project, explore potential alternatives, and evaluate housing opportunity sites in coordination with a Library/Civic Center Steering Committee. The committee consists of staff from the City Attorney’s Office, Community Development Department, Financial Services Department, Library Services Department, and Public Works Department .
ARUP developed financial model s, estimated costs, and assessed procurement and project delivery strategies to identify options to complete the project.
In September 2022, Council adopted the 2021 -2029 update to the Housing Element of the Burbank2035 General Plan (Housing Element). The Housing Element includes an analysis of needs, constraints, and resources for developing a housing plan for the eight- year period. Properties within the Civic Center area have been identified as housing opportunity sites in the Housing Element.
DISCUSSION
The proposed Civic Center Project (Project) represents a transformative opportunity to meet Council goals and community needs while creating a critical downtown neighborhood asset in a sustainable and fiscally responsible manner.
Project Overview and Delivery
The Project proposes construction of the following public assets within the Project area:
• A replacement Central Library of approximately 65,000 square feet (SF); • Functional open space of approximately 52,000 SF;
3 • Replacement office space for ASB staff/tenants of approximately 20,000 SF; • Replacement of eliminated public parking spaces; and
• Associated infrastructure improvements.
Consideration of Public-Private Partnership
Since Fall 202 1, staff has been considering delivering the Project via a Public-Private Partnership (P3) method . In general, a P3 is a collaborative arrangement between a public sector entity and a team of private sector companies to deliver public infrastructure or services . For this Project, various P3 models were evaluated and initially the P3- DBFOM model (which stands for design, build, finance, operate, and maintain) appeared to offer the City with various benefits , including potential transfer of risk to the private sector, flexibility in evaluating construction costs, and incentivized performance . This model involves partnering with a private sector team comprised of a designer, contractor, financier, and potentially a maintenance firm.
Under the P3-DBFOM model , the private partner (Developer) would construct and operate public assets on City-owned land, as well as private housing and commercial space on housing opportunity sites identified in the Downtown Specific Plan and Housing Element. Revenues generated through lease payments from the private development would benefit both the Developer and the City of Burbank, offsetting the City’s long-term financing and construction for the public assets , with the City making payments upon project completion and annual payments to cover capital and maintenance costs.
Challenges with the P3-DBFOM Model
Initially, staff considered the P3-DBFOM delivery model a favorable approach due to its ability to bring civil infrastructure and housing construction together, attracting substantial private investment and delaying the City’s capital outlay. This would allow the City to fund the Project over time and in part through long-term revenues from the private housing and commercial development on the City-owned land.
However, since the last update provided to Council in April 2023, several key economic factors have diminished private sector interest in the Project, including:
1. Rising construction costs due to inflation;
2. Increased borrowing costs from higher interest rates;
3. Higher operating expenses per housing unit; and
4. Inability for rents to keep pace with these increased costs.
With private construction no longer viable within the Project scope, a P3-DBFOM project is considered unlikely to attract a developer team as there is no long-term revenue source to justify the necessary upfront financing.
4 Shift to Design/Build (DB) Approach
While the P3-DBFOM model is no longer the recommended Project delivery method, the underlying DB approach retains similar advantages to the City , such as transferring design and construction risk to the design/builder and promoting close collaboration between the design and construction teams. This method also offers flexibility during the design process, enabling continuous cost -benefit analysis and ensuring that the most efficient solutions are included in the construction plans with input from staff, stakeholders, and the community. Without the P3 delivery, the intrinsic private financing elements are no longer available due to the private (housing) assets and corollary long- term revenue streams not being part of the Project. Subsequently, the operations and maintenance (OM) elements and incentives are removed as well.
Next Steps
Prior to soliciting proposals for a design /builder through a Request for Qualifications/Request for Proposals (RFQ/ RFP) process, the City will need to hire a consultant project management firm to assist in refining the Project scope , taking into consideration local building and development standards, environmental regulations, and the upcoming Downtown Specific Plan . The firm will also prepare the RFQ/ RFP for the design/build services.
Based on the most recent consultant estimates from February 2024, the current Project cost estimate in 2027 dollars is approximately $147 million. The costs of the various project components are broken down as follows:
ASB Site Demolition $1,000,000
New Central Library $65,000,000
City Offices (ASB Departments) $15,000,000
Subterranean Parking $28,000,000
Plaza/Open Space $18,000,000
TOTAL $127,000,000
Total Forecasted Construction Costs (5%/Yr Escalation) $147,000,000
These estimates are preliminary and subject to change as the scope and design of the Project are further developed.
Project Funding and Financing
It is expected that a combination of one-time capital funding and financing would be required to complete the Project. Given the City’s strong credit rating, dedicated revenue stream from Measure P, and substantial borrowing capacity due to a lack of other general City debt , the City is well positioned to finance a project of this scale. As the project advances through the preliminary design phase and forecasted costs become more established, staff will work with a municipal advisor to evaluate funding sources and 5 financing options. A financial plan will be developed that can support a project of this magnitude while remaining cognizant of the City’s other future capital needs.
Housing Unit Construction
Unbundling the housing component from the rest of the Project will not impact the City’s ability to facilitate housing construction in the downtown area. The Downtown Specific Plan will still provide clearance for housing opportunities, along with the potential for long- term revenue from the same housing opportunity sites considered as part of the Project’s original P3 delivery plan. If Council chooses to develop housing on these sites, t he resulting revenue will help offset future recurring financing costs for the construction of the civic assets and provide the Cit y with a permanent revenue stream once the debt service is completed.
Additionally, removing housing from the Project allows the design and construction of the new Central Library to proceed on schedule and in compliance with the $9.95 million grant requirement to complete a significant portion of the construction by June 30, 2027 . The “Building Forward Library Facilities Improvement Program” grant was awarded in October 2023 and is dedicated to building features that support the new library’s sustainability, accessibility, and resilience.
Other Project Considerations
Space programming has already been completed with staff from across City departments.
Analyses included public and staff needs within the Library, office space needs for the Financial Services and Management Services Departments , and consideration of the open space. Along with public and staff use, information technology and building maintenance considerations are part of this workstream.
Project sustainability and resilience will be prioritized, with preferred elements to be included in the minimum Project requirements, such as:
• Use of on-site renewable energy (e.g., solar panels); • Reduced operational carbon (energy from carbon-emitting sources used in operations);
• Battery storage (to maintain power during outages, allowing the Library to serve as a cooling center and/or supporting emergency operations); • Reduced potable water use , onsite stormwater management, and use of native or drought-tolerant plants;
• Use of sustainable materials with reduced embodied carbon (emissions produced by manufacturing, transport, maintenance, and disposal of materials); and • Improved health and well-being features such as natural light and green spaces.
6 The Downtown Specific Plan and its Environmental Impact Report (EIR) are currently under development and include the Project as a key element. Staff expects to present the Plan and EIR to the Council in mid-2025. The Council will have the opportunity to consider Project alternatives being studied as part of the Downtown Specific Plan’s EIR. Following Council’s input, staff will collaborate with the Project Management consultant team to develop the design/build RFQ/RFP in accordance with the Council’s direction.
ENVIRONMENTAL REVIEW
Receiving 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. This report is for informational purposes only. The final Civic Center Project will be separately evaluated in accordance with CEQA prior to Council’s approval of the Project.
FISCAL IMPACT
There is no fiscal impact associated with this report . The Project funding necessary to proceed with executing the contract for the Project Management consultant was previously approved by Council as part of the City’s 2024-25 Fiscal Year budget.
CONCLUSION
The proposed Civic Center Project represents a unique opportunity to replace outdated facilities with modern, sustainable infrastructure that will serve the community and City for generations to come. In addition to the new and updated civic amenities, the Project will provide much needed multi-functional open space and transform the downtown area as a vibrant, contemporary downtown neighborhood.
Staff will proceed with the project management procurement and anticipates returning to the Council to award a contract in mid-2025. As the Project evolves, staff will also seek Council approval to award a design/build contract, or a suitable variation, estimated by Summer of 2026.
ATTACHMENT
Attachment 1 – Conceptual Site Plan