Plenary-Edgemoor Civic Partners (PECP) team has plans to close project financing for the new civic center in downtown Long Beach (California) in late January. The team recently signed an agreement to develop the PPP project at a fixed price of about US$520 million.
PECP team is is composed by Plenary Group, Edgemoor Infrastructure & Real Estate, Clark Construction Group, Skidmore, Owings & Merrill and Johnson Controls. The team will design, build, finance, operate and maintain a new civic center for a period of 40 years.
The City’s advisors included p3point as lead P3 financial advisor, Arup as lead advisor (including their team of HOK, BAE Urban Economics and MBI), Sheppard Mullins and KNN as municipal finance advisor.
According to sources, Allianz, in a private placement, would provide US$237 million in long-term financing. Sumitomo Mitsui Banking Corp. would will provide a US$213 million load. Long Beach is contributing US$11.8 million in cash, Plenary would provide US$21 million in equity and Edgemoor would also provide equity for the project.
The $513 million financing arranged by Plenary and it’s bankers HSBC and Barclays, consists of:
• $239 million approximately 43 year term private placement with Allianz
• $213 million approximately 3 year term construction loan from Sumitomo Mitsui Banking Corporation
• $21 million equity investment by Plenary, and
• Contributions of cash and land from the City of Long Beach totaling approximately $40 million in value.
Long Beach and the Port are taking benchmark interest-rate risk up to financial close.
The PECP proposal involves the development of 200-room hotel, 594 to 612 residential units, up to 47,838 square feet of retail space, 11-story City Hall, and 93,500 square feet of library space. The proposal placed separate-but-connected city and port administrative buildings. The new buildings will be located at the corner of Ocean Boulevard and Magnolia Avenue in the city of Long Beach.
PECP was named the city’s exclusive negotiation partner in December of 2014. Since that time, the team has held or participated in over 100 community meetings, hosted countless discussions with various city departments and the port, and sought ways to improve upon the original proposal.
On 12 February 2013 the Long Beach City Council initiated the process when it released a Request for Qualifications (RFQ). Out of seven teams that responded to the RFQ, the City shortlisted three to respond to a more detailed Request for Proposals (RFP) issued on 28 February 2014.