Master Planning & P3 Financing the LA River

Jack Baylis: Barbara, share the Mayor and City’s current vision for the LA River and the G2 parcel.

Barbara Romero: Before I joined the Mayor’s Office, I worked at the Santa Monica Mountains Recreation Authority. We were involved in projects all over the county: in Pacoima, the Tujunga Wash, Compton Creek, and the LA River. I loved my job, so I was torn about leaving to work for the city.

But the mayor said, “I want you to do what you are doing at the MRCA, but at a broader scale for the city and the river. I want you to use your perspective as a kid who grew up in Boyle Heights, and who thought the river was an infrastructure barrier. Help me elevate the vision of what the river could mean, both for connecting communities and for using our water resources in a different way to create value.”

Our vision at this point is to secure land along the river to provide opportunities to create the multi-layered value that cannot always be monetized. When I first arrived in the Mayor’s office, I was asked what our metrics for success would be. I said that unless we were able to secure this parcel of land that had been in the LA River vision for over 20 years, people would not think we were serious.

We have now secured the G2 land for $60 million from Union Pacific. It took more than four years to acquire, but it created the platform for a multi-benefit project that cleans and captures water, and most importantly, connects the community. For me, G2 is the exemplar of what we want to do across the entire 32 miles of the river in the City of Los Angeles.

We have a responsibility to get people to understand the value of our water system. The river is one vehicle to help people understand how we can become more sustainable as a city. We can use the river as a metaphor to achieve that goal.

Jack Baylis: Dan, is the county in alignment with Mayor of LA’s vision for the river?

Dan Lafferty: Many people don’t realize that housed within Public Works is the Los Angeles County Flood Control District. As Assistant Deputy Director of the county Department of Public Works, I’m also the Chief Planner for Flood Control.

Our agency, along with the U.S. Army Corps of Engineers, has the primary responsibility for operations and maintenance of the flood control right-of-way for the LA River. We did our last Master Plan in 1996 and are just beginning a revision to that process, which we expect to be completed by 2020.

This plan will be, not just a compilation of all the plans that have been done since 1996, but also a vision for the entire corridor—both the right-of-way and the adjacent land. We will be soliciting input from the city of LA and the lower LA River municipalities. That effort will require a lot of collaborative input, and we are excited to help shepherd in a shared vision for the river, whatever it may be.

LA River panelists at VX2018

Jack Baylis: Mia, Brian, and Zeynep, share your perspectives on the LA River.

Mia Lehrer: The LA River is an example of what I call “advocacy by design.”

The LA River Revitalization Plan was completed in 2007 and adopted unanimously by the Los Angeles City Council. It includes the 32 miles of river in the City of Los Angeles, and about 11 miles of river from Vernon to Long Beach.

The changing channel geometry creates tremendous challenges. From the San Fernando Valley to the Glendale Narrows to Downtown Los Angeles, there are many variations in topography, land use, and character.

There is a tremendous amount of activity at the river now. Over the last decade, non-profits and government agencies have created bikeways and kayaking opportunities. We are now a navigable river. These were accomplishments by the mayor and others.We also succeeded in creating positions for the River in both the Mayor’s Office and Planning Department. There is River LA, a full-time nonprofit, and Friends of the LA River, a community-based nonprofit.

Although the river had been accessible to previous generations, it had become more inaccessible due to train traffic and industrial uses. The River Revitalization plan mapped a vision to restore accessibility, capture community opportunities, and create value. We had a series of metrics and criteria that identified 240 potential projects for the River. This helped to crystalize all of the moving parts of river efforts.

Of the 240 proposed projects, roughly 60 are going on right now—including G2, major bikeways, Albion Park, and the Verdugo Wash study. There is a tremendous amount of work ongoing.

Brian Jordan: The draft Lower River Master Plan is now effectively complete. The process brought together about a dozen smaller cities and a couple dozen NGOs—so around 30-40 representatives altogether. They met a couple hundred times to come up with a framework for how to capture value from the lower river, with connectivity as the ultimate goal.

How do you make the river function as a river, as a watershed, and as a flood control facility? How do you make it a nice place to be? How do you connect the natural, built, and social environments? In the plan, there are a couple hundred recommended projects for the Lower River. Six signature projects will be implemented in the near term, and will hopefully motivate more of work to be completed on the Lower River.

The Lower River Plan uses a framework for balancing engineering requirements with the interests of the community stakeholders. The governance structure to implement Lower River projects is greatly detailed in the plan, as well as a roadmap to make that governance structure permanent.

Dr. Zeynep Erdal: Recently, AECOM did an internal study looking at the LA River Revitalization Plan and trying to find tangible solutions based on the current state of the river. AECOM’s unsolicited proposal takes a triple-bottom line approach to the river, looking at how to improve the environment, the social situation, and the economy.

That brought us to the question of how to make it happen. The City of LA currently has nearly $1 billion in matched funding. But this will require a lot more money. Looking at solutions other jurisdictions have used, we saw two main options: public-private partnerships and integrated public funding strategies. P3s are popular for infrastructure and public spaces. For the LA River, we recommend combining a P3 with a public governance scheme—an EIFD—to create a strong tool for river communities. As a result of SB 628 that was passed in 2014, and EIFD allows the local government to invest tax dollars and revenue in areas that are of importance to them. This special district would have a special interest, with a set aside for river causes. Most importantly, an EIFD is a public entity that can get into P3 relationships with private partners. So a P3 could be between an EIFD, a public agency, and a private entity. It could be a catalyst that could drive public interest and investment.

The other solution is the joint development of underutilized assets. Examples of these types of projects are LA Union Station, transforming it into a six million square feet transit oriented community, and the LA Civic Center.

The other funding opportunity is the integrated public funding strategy. These are shared interests that are put together by the public agencies. Funds are allocated for shared interests are funneled into specific projects. A good example is the state’s Cap-and-Trade program. The auction proceeds now exceed one billon dollars.

We also need to look at aligning our water goals, such as healthy watershed, stormwater capture, and improving water quality. We need to align these efforts with the LA River so we can tap into a broader pot of money.

Jack Baylis: Yuval, speaking from your experience as a community-builder, how can we make sure the city does not repeat what happened in Chavez Ravine?

Yuval Bar-Zemer: The P3 was basically invented to accelerate large infrastructure projects. By subbing in a large enough qualified entity that could take on part of the investment, and benefit from part of the revenue stream down the line, P3s have found success in toll roads and bridges. I think municipalities know how to create these P3s very well.

The difference with the LA River is that the vision and the plan are not there. There are as many opinions as experts on what the river should be. From an engineering background, hydrology, flood control, or social equity—there are lots of ways to look at the River. As a citizen, I sit on the board of the non-profit Friends of the LA River. I’m interested in how we can get this natural resource back to a state where everybody can benefit from it.

I recognize that tearing down concrete and maintaining safety for the city is an expensive exercise for the city. We need a consensus on what the river should look like. There’s a good chance that the river will be a heavily government-funded exercise, because there is no revenue stream down the road. The real-estate tax next to the river is the value.

But I think we need to be very careful about developing along the river. If real estate values go up and generate higher property taxes—which was the model of the Redevelopment Agency and the first Master Plan—there needs to be a clear agreement about what should be funded with that money.

The other problem is that our land use regulation—which came along with the LA River Master Plan—was half-baked, and never implemented to its full potential. There’s a designation called Rio, which is an overlay zone for real estate next to the river. It tells you what plants you can plan in your landscaping, and it doesn’t say much more than that. The efforts of the Planning Department over the last 10 years resulted in nothing more than that.

There is a vacuum of ideas about what should guide development alongside the river. That is cause for sensitivity and frustration for many communities. They see the potential for a major project on the river to turn their lives upside down. Sure, they’d love to go and play in the new park. But they wonder if it will leave a neighborhood for them, because they probably won’t be able to afford rent there anymore.

All of these things are happening in the context of a lack of serious planning and a commitment to focusing on the restoration of the ecosystem.

Jack Baylis: Barbara, how are improvements to the LA River being financed? Are there enough public funds? Is the city of Los Angeles issuing bonds?

Barbara Romero: Good projects attract money. Part of our challenge in implementing our vision for the river is looking at an integrated approach to these projects.

The new frontier is Downtown Los Angeles. In Frogtown (Elysian Valley), we’ve done a lot of parks; there is a lot of tension and skepticism. There has been a lot of development. I think if we’re going to do the right thing, we need to focus in Downtown LA where we can try some of this development.

Even though people say there’s not a lot of money, there is. In Metro’s Measure M, there’s more than $400 million for 32 miles of the LA River bike path that would essentially connect Canoga Park to Long Beach. That would create a 51-mile, seamless bike path. And that is a lot of money.

In SB 1, the water bond, there’s more than $100 million for the Los Angeles River. And the parks bond that will go on the ballot in June has another $100 million. There’s even the stormwater measure that we might have in the county.

There is public money. The question at this critical juncture is: How do we integrate all these different one-dimensional public funding sources to implement these projects? Then, how do we look to the private sector to help us—once we’ve done the public piece of investment—not just because you happen to have a project next to the river? What are the community benefits of that?

I am very sensitive to the negative impacts of development next to the Los Angeles River. How do you design it, and what kind of benefits do you include? The Sunkist project is a project in Sherman Oaks, where our office said, “We’ll support the project, but what are you going to do for the neighborhood?” Part of our job is to make sure we have consensus on those things, when a developer comes to us, we’re clear on what the public benefits are, how can they build some of our project?

Some of the other costs that we think are very expensive for G2, for example, are the cleanup costs. How do we work with the private sector to figure out solutions for remediation, to come up with money? The reason that took 20 years is because a public agency didn’t want the liability for a dirty site. How do we get those contaminated sites along the river cleaned up?

What’s another piece of leverage that the city has? We have underutilized land along the river. How do we consolidate our purposes and our uses? We have more than 13 yards along the Los Angeles River. How do we repurpose that and work with the private development, and indicate: If you want to work on this project, these are the five things that we need you to do on our behalf to ensure that we have those protections.

I’d like to change the conversation from “there’s not enough money” to “we have to be more creative about how we work together to make the river a reality.”

Jack Baylis: What is the City’s timeline for LA River improvements?

Barbara Romero: The River Master Plan was a 50-year plan, but I have a deadline from the mayor: the 2028 Olympics.

The mayor sees the Olympics as a framework for envisioning the river. How do we want people to see the river when they come here? We want it to be a destination site. We want to demonstrate that you can have affordable housing along the waterfront; we want to recreate and celebrate; and we want to showcase our water management. We have a unique opportunity to do that.

At the end of the day, my job is to try to find the money—and to do so in a responsible way that delivers community benefits. As yet, the city of Los Angeles doesn’t have a good portfolio of P3s. Why is that? Because the public doesn’t trust that there is going to be a benefit for them.

The river is personal to a lot of people. We have to show them that the only way we’re going to do this is with private investment.

We could be a global city with a global river. It has been done all over the world—we just have to get together and get it done now, because we have a deadline: 2028.

Jack Baylis: Mark, your reflections?

Mark Gold: We can’t lose sight of what’s between the banks, not just what’s alongside them. There is not enough focus right now on the flows, the water quality, and the biological resources of the river—all of which are highly degraded. This water body is listed as “impaired” under the Clean Water Act for everything from trash to nutrients to toxic metals. There is a lot that needs to be done.

We also have quite extraordinary goals on local water. We want to use all the water coming from our Inland water treatment plants for water supply—to recycle as much of that water as humanly possible. We want to do a much better job infiltrating stormwater to replenish our aquifers, which will reduce pollutants and add to our local water supply. But if we don’t do that in a very smart way, we could end up drying out the river.

I urge the Regional Water Board, working with the state, to take leadership on a planning process for what happens between the banks of the river. We need to plan for balancing beneficial uses, so that we can optimize the river for recreation and aesthetics as well as for the aquatic life that has suffered for decades.

It’s also important to look at the water set as a whole. The people working on the river are not the same people looking at the entire 850 square miles of the river watershed. But what happens in the Angeles Forest, in Tujunga, in Sunland and Pacoima and Canoga Park—all that matters to the entire LA River and its watershed. I’m fearful that unless we integrate our work on stormwater with our river planning, we’re going to have a major disconnect.

One thing that would help tremendously is the LA County stormwater parcel tax. It would bring dollars in for watershed management, stormwater, pollution reduction, and water supply capture. There is nothing more important for the Los Angeles River, or for our regional water management as a whole, than the passage of the LA County stormwater measure in November.

LA River panelists at VX2018