Council Moves Ahead on Financing to Purchase Building for a City Hall

• Contract with Design Firm Vetted

BY BILL KOENEKER

Malibu’s local government moved two steps closer to its own city hall this week when members approved a financing plan and hired consultants to ready the building for its opening.
Council members were told it might take up to a year before the building is ready for use. The council approved an agreement with LPA, Inc. for architectural design services for its newly acquired City Hall building purchased for $15 million.
LPA, the firm hired to redesign the Malibu Library, has been directed by city officials to determine how to best allocate available office space for a city hall, while maintaining space that can serve community, theater and multi-media functions.
City officials say the building has adequate space for city staff, council chambers, a senior center, space for community uses and can also be rented out as a state-of-the-art media facility.
Municipal officials had already decided to use LPA for the entire design process through final construction documents and bidding.
LPA has designed 10 city halls, numerous performing arts centers and 10 community centers. LPA has over 140 LEED-accredited professionals at the firm, LPA’s resume states.
Rick D’Amato, an LPA spokesperson, said it is an opportunity to make the new city hall the civic heart of the community.
He also explored how the building could be accessed and changes that could be made to alter the outdoor spaces because currently the building sits in a sea of parking lots. “We can extend the building spaces,” he said.
The designer also talked about opening the building up to the outside by creating operable windows and operable skylights. “We want to bring air through the building,” he said.
The LPA spokesperson said his team would be meeting with department heads, staff and each council member to get their input.
The other order of business was setting up the certificates of participation that will be used for financing the acquisition. The city will issue COPs not to exceed $22 million that will generate about $15 million in proceeds, which is the cost of the building.These funds, together with about $1.7 million appropriated from the City Hall Reserve Fund, will be used to reimburse the city for the acquisition of the property and fund necessary costs to convert the building, according to city officials. Certificate proceeds will also fund a debt service reserve fund capitalized interest with respect to the certificate for three years and to pay the costs of issuing the certificates.
City Attorney Christi Hogin said the financing was structured so that the city would never be paying for both the current and the future city halls. The city’s lease for its current space is for another three years.
In a somewhat complicated scheme, the city’s Malibu Public Financing Corporation, made up of the city council, approved the lease purchase agreement between the city and the public financing operation. That meeting took place in a special session when the council recessed and the financing corporation convened. Shortly thereafter, the council resumed its regular session.
Council members were told the city leases the building to the finance corporation and the corporation leases it back to the city for lease payments.
Council members were also told the city has an outstanding credit rating of AA+.
It was also explained that the financing structure is the same as the one used to acquire Legacy Park. In that case, the debt service is paid back by the collection of rents from the buildings acquired by the city in the purchase and the construction of the Malibu Lumber Yard.
In the case of the new city hall, the rental payments currently paid, close to $1 million per month, will be used for the lease payments. That amount is estimated to be about $1.45 million based on current interest rate assumptions. The first annual lease payment that the city will be required to make from the general fund will be due on Dec. 15, 2012. If the city were to remain as a renter in the existing city hall facility, annual rent in 2013 would be about $1 million. It is anticipated that the additional $450,000 needed will be generated by the rental of the performance and recording areas of the new building.
In other action, Mayor Andy Stern had a new name for a boondoggle project forced upon the city. Previous council members had called it the ghost shuttle. “This is the nuthead ghost shuttle,” he said. The mayor was referring to the $54,600 contract for the upcoming year for what is called the “ghost shuttle,” so named because it goes from the Westward Beach parking lot to the Point Dume headlands with very few, and often no, passengers.
Stern said the city has unsuccessfully attempted to modify the agreement. The mayor indicated that there are so few riders that the average ride costs the taxpayers $60 each.
Nevertheless, an agreement the city entered into in 2000 with the California Coastal Commission and the state Department of Park and Recreation requires the city to provide the shuttle service, even though it has proven to be ineffective. The agreement was reached to end the litigation over access issues at the headlands