Long Beach City Council
February 1, 2022

Civic Center Mid-Block Moderate-Income Housing Project
City Council Meeting – February 1, 2022
• On December 15, 2015, the City Council approved the
Civic Center Project:
o The Civic Block (complete)
o The Library-Lincoln Park Block (BJK Main Library
complete, park nearing completion)
o The Mid-Block, the site of the former City Hall currently under demolition
• On March 19, 2020, Planning Commission approved
the Mid-Block project entitlements; 580 residential
units and 40,000 sq. ft. of retail and restaurant space • In April 2021, Plenary Properties Long Beach, LLC
approached the City to participate in tax-exempt
bond financing for the construction and operation of
middle-income housing
Background
2 • 580 moderate-income residential
dwelling units
• Two eight-story buildings
• Two levels of subterranean parking
with 885 stalls, including partial above-
grade levels
• 40,000 sq. ft. of retail and restaurant
space, including an approximately
12,000 sq. ft. grocery store
• The buildings separated by a
pedestrian paseo aligning with the new
Civic Center plaza and extending into
the new Lincoln Park
• Both buildings feature a large interior
courtyard including a pool and
fitness/amenity space
Mid-Block Project Details
3 • Plenary (Sponsor) will partner with California Community Housing Agency (CalCHA), who will own and is the Joint Powers Authority (JPA), that will issue the tax-exempt bonds to finance the construction of the project • The Project will be governed by a Regulatory Agreement that will restrict tenant income and rents and will include a 55-year affordability term for the California Department of Housing and Community Development (HCD) units • JPA will enter into the Project Administration Agreement with Plenary who will serve as the project administrator and asset manager
• JPA will enter into a Property Management Agreement with Greystar Property Management for property management services
• The Public Benefit Agreement between the City and JPA ensures that the City will not be legally liable for construction, financing, or operations during the bond term, after the first 15 years, the City will have the option to force a sale of the property
Summary of Proposed Transaction
4 • The Project will be financed by
two 40-year tax-exempt
Essential Housing Revenue
“Series A Bond” and a
subordinate “Series B Bond”
• Total development costs are
estimated at $493,631,440
• The City shall have the ability to
force sale at any point after
year 15 of the A bond term
Financing Structure
5 • In California there are two
approaches to calculating Area
Median Income (AMI):
o State Income Limits prepared by the
HCD; and
o Tax Credit Allocation Committee
(TCAC) calculations prepared by the
U.S. Department of Housing and
Urban Development (HUD)
• The Plenary Project uses a
combination of both approaches
Housing Affordability Level – Income Limits
6 • The proposal uses a “Lesser of Two
Tests” methodology in setting the
affordable rents:
o A 5.0 percent discount to market rents,
or
o Respective rents from the State Income
Limits (HCD) and TCAC Limits (HUD)
• All units have a meaningful affordability
restriction
Housing Affordability Level – Rents
7 • The Proposal dedicates 120 units at
State Income Limits (“HCD” Units) and
460 units at TCAC Limits (“HUD” Units)
• The 120 HCD Units will be secured by
a 55-year deed restriction
• The Proposal applies a utility
allowance to all units which reduces
the total rent burden for tenants
Proposed Affordability and Unit Mix
8 • The City’s participation allows the JPA
to retain the same level of property
tax exemption, therefore the Project
would forgo paying ad valorem
property taxes during the term of the
bond
• The City will receive an annual “host
fee” to compensate the City for its
otherwise foregone property tax
payments for the residential
component
Property Tax Impacts
9 • New Housing Production and Regional Housing Needs Assessment (RHNA) Credits
• Deeper Housing Affordability
• Maintains City Property Tax Revenues
• Other Public Benefits
o New ground floor retail uses generating new City property tax revenue o Completes the Civic Center Redevelopment
o Potential net conveyance proceeds to the City if the City exercises the option to sell between years 15 and 40
Potential Benefits to the City
10 • Large total foregone public benefits to taxing entities • Complicated financial structure with fees not tied to performance • Public benefits are exposed to market risks
• Risks from lack of enforcement
• Potential risks from setting a precedent encouraging multiple future transactions
Potential Risks to the City
11 Adopt a Resolution authorizing the City to (i) approve the issuance of bonds by the California Community Housing Agency to finance the development of the Civic Center Mid-Block, and (ii) Authorize the execution of all documents necessary to effectuate the issuance of the bonds and the development of the Civic Center Mid-Block as described herein, including a Public Benefits Agreement with California Community Housing Agency (District 1) Recommendation
12 Thank you
13 Oscar Orci
Director of Development Services
[email protected]
Patrick Ure
Housing and Neighborhood Services Bureau Manager
[email protected]