Leases for Controversial City Club Range From $85,000 to $725,000
Marina City Club developers plan to offer 81-year leases on 600 luxury high-rise apartments that will cost residents anywhere from $85,000 for a single unit to $725,000 for a four-bedroom penthouse.
Residents, who strongly oppose the conversion, filed suit last week in Los Angeles Superior Court claiming the plan would turn the public’s marina into “a playground for the rich.”
The announcement of a detailed price list at a public meeting Thursday evening was the first solid indication of what the developers, Marina del Rey Properties (MDP) Ltd. and J. H. Snyder Co., plan to charge for the leases.
Another public meeting is scheduled at 7 p.m. Wednesday in the Burton Chace Park Community Room.
The proposed prices and a requested reassignment of the master lease from MDP to Snyder are subject to the approval of the county Small Craft Harbor Commission and the Board of Supervisors.
Asking Prices
At Thursday’s meeting at Marina City Club, developers said they plan to ask from $185,000 to $231,000 for one-bedroom units, $248,000 to $348,000 for two-bedroom units and $305,000 to $415,000 for three-bedroom units. Three- and four-bedroom penthouses are $575,000 to $725,000.
The price of each apartment in the three high-rise towers depends on the size of the unit and the view it offers, developers said.
In addition to a monthly mortgage-like payment that residents will have to pay to obtain an 81-year lease, they also will have to pay monthly fees ranging from $190 to $1,451 to cover maintenance and so-called “shadow rent,” or land rent that will be passed on from the developer to the county.
The average total monthly fee including maintenance and shadow rent will be $632, according to a real estate consulting firm that analyzed the plan for the county Department of Beaches and Harbors.
Price Comparisons
The consultants’ report, made public at Thursday’s meeting, said the proposed Marina City Club prices are “comparable” to other luxury high-rise projects in oceanfront areas and on Wilshire Boulevard’s “Golden Mile” between Westwood and Beverly Hills.
But the report goes on to say that the proposed Marina City Club lease prices are higher than the actual sale prices of comparable condominiums in other water-oriented or luxury areas.
Consultants said the average two-bedroom lease price in Marina City Club is $313,200, compared to average sale prices of $243,700 to $253,700 for two-bedroom condominiums. The proposed lease price for a three-bedroom unit in Marina City Club averages $378,900, compared to sale prices of $320,300 to $323,700 for three-bedroom condominiums, according to the research by Kotin, Regan & Mouchly Inc.
Residents, outraged at the proposed prices, said that even if the costs of the leases and the condominiums were equal they would not be comparable: Condominium buyers acquire an ownership interest in their units, but Marina City Club buyers would only be purchasing the right to occupy their units until their leases expire in 2067. After that, they could be evicted unless the county agrees to extend the leases.
A notice the county is giving prospective buyers states flatly: “The contemplated arrangement is simply payment for the right to occupy an apartment, not the purchase and sale of a fee interest in the apartment itself.”
The Marina City Club Residents Assn. has filed suit asking the court to overturn the county Board of Supervisors’ approval of the plan on Oct. 7.
A hearing is scheduled Dec. 2 in Los Angeles Superior Court on the suit, which asks the court to give the residents a 45-day reprieve to prepare their case. Residents claim in the suit that the county “railroaded” the plan and approved it without giving opponents adequate time to prepare a response to 600 pages of documents amending the ordinance.
The suit alleges that the county created “a new legal animal, known as a prepaid sublease . . . to circumvent well-established prohibitions against condominium conversion on this public property.”
$1-Billion Loss Asserted
Court documents prepared by residents’ attorney Robert J. Steele state, “Quite simply, the county and its master lessee are attempting to sell the property to private owners without having the transaction characterized as a ‘sale’ (which would be illegal).”
The suit claims that by adopting the plan the county will lose nearly $1 billion that it would have received from the sale of the complex at the end of the lease.
County attorneys responded that the supervisors gave residents the notice time specified by law for public hearings. They said the supervisors have analyzed the plan and approved it because it will provide the county with significantly greater revenues.
County consultants said the sale of prepaid leases would provide the county an estimated $1.4 billion in revenues by 2067 when the lease expires.
