The latest design concept for Laguna Beach’s long-awaited downtown village entrance as well as how to finance the estimated $42 million project goes under review tonight in a special 6 p.m. meeting of the City Council.
The concept envisions a park with pedestrian pathways replacing the current asphalt parking lot at the town’s gateway on Forest Avenue at Laguna Canyon Road as well as a multi-level parking structure tucked behind City Hall and a flood control channel. The elephant in the room is the project’s $42 million price tag, which could be paid in part by $29 million in borrowing, according to a staff report. The proposed funding strategy and design concepts by Long Beach’s Studio One Eleven will both be reviewed at the meeting,
Having collaborated on the project intermittently since 2004, Mayor Pro Tem Elizabeth Pearson and Council member Toni Iseman diverged in March when they publicly presented two different plans.
In a 4-1 vote with Iseman dissenting, the council favored Pearson’s option of a public park wrapping around the corner and a four-level, 500-space parking structure estimated to cost between $33 and $55 million.
Iseman’s proposal called for a smaller “greenway” sharing the space west of the flood channel with 90 surface parking spots, and a smaller, three-level, 372-space parking structure, for a price of $30 million.
Both concepts maintained 79 of the outdoor parking spaces east of the flood channel currently used by City Hall workers.
Pearson has since fine-tuned her concept in a subcommittee with a new collaborator, Council member Bob Whalen, a municipal finance expert professionally, who advocated completing the entrance during his campaign last November. He previously served on the Laguna Beach school board where he championed a 2001 bond measure for renovating local schools.
The team has narrowed cost projections to $42 million, based on a $36 million construction estimate and allowing a 20 percent contingency. The parking structure alone accounts for about two thirds of the cost, with the remainder funding street modifications, a park, renovating the historic sewage digester tower and excising odor from the sewer lift station.
To pay for the project, Pearson and Whalen propose tapping the city budget for $13.3 million and raising the remaining $29 million with bond debt. The city portion includes $7.8 million from a parking fund, $5 million from a capital improvement fund and $500,000 from the sewer fund.
Mayor Kelly Boyd supports the project, but has said debt financing of that magnitude should have the consent of voters.
The proposed revenue bond would be sold to investors and would require $2.3 million in annual debt service, with repayments generated from designated revenue sources such as parking meters rather than local taxes, the staff report says.
About $2 million annually would be generated by meter rate-hikes and another $300,000 a year could be gleaned from the new parking structure, the staff report forecasts. The latter figure assumes each of the 200 new parking spaces generate $1,500 a year, the same per-space revenue earned by the existing surface spaces in the Forest and Laguna Canyon lot, according to City Manager John Pietig.
The proposal also assumes bond repayments would begin by 2016 when hourly street parking rates throughout town would have escalated by $1. Rate hikes require Coastal Commission approval, though city staff does not anticipate an objection.
In the event that the initial funding strategy falls short, the staff report identified other potential revenue sources: increasing the $2 per hour rate in public parking lots; charging $1 for a trolley day pass; increasing the hotel tax by 1 percent; adding a $1 surcharge to Festival of Arts tickets; increasing the sales tax from 8 to 8.5 percent; and halting a $700,000 annual infusion of parking revenue into the city’s general fund, which would require spending cuts elsewhere.