Conversion OKd for Subleases at Marina City Club
Tenants of the Marina City Club on Tuesday lost their bid to delay conversion of their luxury apartments to condo-like subleases, as the Board of Supervisors voted 4 to 1 to approve the unique arrangement with Marina del Rey Properties.
The agreement, the first of its kind in Los Angeles County, gives Marina del Rey Properties an 81-year master lease and the right to convert units in the waterfront towers to long-term subleases that can be resold by individual tenants. The land would be retained by the county, and the building would be operated by the private firm.
However, unlike residents of condominiums, which are illegal on county-owned land, tenants will have no control over common areas in the building. County officials also concede that it is unclear whether tenants could write off their sublease payments as they could a mortgage. The agreement will not affect tenants until details on the cost of individual units are worked out in a public hearing.
Delay Sought
An attorney for the tenants had asked that the board delay its vote two weeks to give tenants a chance to fight the proposal. Supervisor Kenneth Hahn, the dissenting vote, also sought a two-week delay.
However, attorneys for Marina del Rey Properties argued that the board should vote immediately, citing the possibility that bank interest rates could change, affecting financing for the subleases and for the company’s imminent sale of the complex to a second company.
Under the agreement, the county will receive a 40% increase in its land lease payments from Marina del Rey Properties and $2.5 million for granting the company the right to sell long-term subleases, according to Don Knabe, chief deputy for Supervisor Deane Dana. Marina del Rey Properties has agreed to sell its master lease to the J. H. Snyder Co., an outside firm that plans to take over the new sublease arrangement.
County consultants estimate that the deal will generate revenue of $1.4 billion for the county by 2067, when the new lease expires. But consultants for the tenants contend that the county would make an additional $500 million if it leaves the lease arrangement as is, retaining its ability to sell the building in 2028.
The tenants will be required to move out or agree to a down payment of about $63,000, and make monthly payments that steadily escalate beyond the current monthly rents, which average $1,500 to $2,000.
Steele said the tenants have initiated a legal defense fund and will meet with him this month to decide whether to sue the county. He said the county’s plan circumvents laws prohibiting condominiums on public land.
“Whatever you want to call it, sublease or condominium, the fact remains they are forcing people to buy their units . . . or get out,” Steele said. “We think that’s grossly unfair.”
About 500 of the 600 tenants have signed a petition protesting the conversion.
During Tuesday’s meeting, Supervisor Pete Schabarum conceded that the agreement leaves the current tenants in limbo.
“The people here today are concerned about what happens to their tenancy,” said Schabarum, who backed the new sublease agreement. “The answer that has to be given is, ‘I don’t know.’ ”
Schabarum said the tenants would have ample opportunity to hammer out details of the agreement--such as the price and conditions of the subleases--at a public meeting of the Small Craft Harbor Commission. No date has been set for the hearing.
