The Escalating Price of LA’s Civic Center

LA WATCHDOG--The City of Los Angeles has very ambitious plans for the Civic Center, the area surrounding City Hall. According to the City’s Information Statement, the City is “considering major improvements to its Civic Center, with estimates ranging from $730 million to $760 million for the first of multiple phases of its Civic Center Master Development Plan.” 

The overall cost of the Civic Center Master Development Plan is anticipated to more than $2 billion, a considerable increase from the prior year’s estimates that ranged from $300 million to $500 million. 

The first phase of the Civic Center Master Development Plan is the controversial demolition of Parker Center, the former headquarters of the Police Department, and the construction of a 27 to 29 story, 750,000 square foot office building to house City departments that are not currently located within walking distance of City Hall.  

The cost of more than $700 million for this phase was disclosed by Dakota Smith of the Los Angeles Times, prompting the City to amend its Information Statement to comply with the Securities and Exchanges full disclosure requirements. 

Here's the new — and much higher — cost of replacing Parker Center with an office tower. 

The Civic Center Master Development Plan is an effort to consolidate the City’s departments in the Civic Center core so that the City departments can operate more efficiently.  However, more than a few have commented that departments are more efficient the farther they are away from City Hall. 

The City is also promoting the idea that it is more cost effective to own its buildings as opposed to paying rent to a corporate landlord.  Again, this assumption is debatable and needs to be analyzed in an objective manner. 

More to the point, this multibillion dollar development plan is an effort in monument building to feed the egos of our elected officials. 

The area surrounding City Hall and County Hall of Administration is worthy of development according the City as it contains “the largest concentration of public employees in the United States outside of Washington, DC,” a truly scary thought.  During recent years, this area has been a magnet for public funds, ranging from the construction of Grand Park, the rehabilitation of the County Hall of Justice, the construction of a new Federal Courthouse, and the development of a new two-acre park across the street from City Hall and the Los Angeles Times building.    

The Civic Center Master Development Plan also calls the development of a 675,000 square foot office building on the site of the Los Angeles Mall to house additional City departments.  

The Plan also includes the development of two mixed use residential towers with almost 1.1 million square feet of apartments and 180,000 feet of retail space as the City wants the Civic Center to be alive after office hours.   

Finally, the Civic Center Master Development Plan provides for the creation by 2027 of a park on the site of the James K. Hahn City Hall East Building.  This new green space would connect City Hall with the two new office buildings and the residential high rises.    

Overall, these projects will cost a minimum of $2 billion, but probably considerably more knowing the City’s propensity for cost overruns and delays.  

There has been no discussion about how to finance the grandiose Civic Center Master Development Plan other than to sell half of Figueroa Plaza (most likely to the Department of Water and Power at an inflated price) and the Public Works building at 1149 Broadway for an estimated $300 million.  The residential towers will most likely be developed by large real estate investors as the City has no expertise in owning and leasing residential real estate.  

However, this is not the only infrastructure project that requires money.  The City needs $3 billion to repair the one third of our streets that considered to be failed, $1.2 billion for the revitalization of an 11 mile stretch of the Los Angeles River, and over $2 billion over the next three to four years to comply with the Clean Water Act.  This does not include the $500 million expansion of the Convention Center as AEG has proposed to finance this long overdue project.  

The City’s plans for the Civic Center may well complement the massive public and private development that is consuming DTLA.  But at what cost?  Will Mayor Garcetti and the City Council want us to pay for their monuments by calling for yet another tax increase on the highest taxed people in the country?  

Or, better yet, are Mayor Garcetti and the City Council prepared to devote a small portion of the City’s $10 billion in annual revenues to finance the Civic Center Master Development Plan?  After all, Angelenos are not an ATM for the City’s pet projects.

 

(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council.  He is a Neighborhood Council Budget Advocate.  He can be reached at:  lajack@gmail.com.)

-cw