Harbor Panel Backs Marina Conversions
Over tenants’ objections, the county Department of Beaches and Harbors plans to recommend approval of the remaining key elements of a controversial plan to sell 81-year leases on 600 Marina City Club luxury apartments.
After a rancorous public meeting Wednesday, tenants’ attorney Robert J. Steele called the hearing “a charade” in which residents’ views were solicited, but the plan remained unchanged.
County officials said, however, that the plan had been negotiated over a period of years, with consideration given not only to the rights of tenants but also to the rights of taxpayers countywide.
The supervisors on Oct. 7 approved the concept of selling long-term prepaid leases as part of a plan that consultants said would generate $1.4 billion in revenues for the county over the term of the lease.
The Department of Beaches and Harbors will recommend that the supervisors also approve important details of the plan, including the proposed prices and the appointment of the J. H. Snyder Co. as the master leaseholder for the project, replacing Marina del Rey Properties Ltd., officials said.
Two Hearings
The prices and lease reassignment will be reviewed by the Small Craft Harbor Commission on Nov. 19 and the Board of Supervisors will hear these issues on Nov. 25.
Developers and county officials view the plan as a way to generate more income from Marina del Rey, one of the county’s most valuable assets.
The proposed prices for the 81-year leases are $85,000 for single apartments; $185,000 to $231,000 for one-bedroom units; $248,000 to $348,000 for two-bedroom units; $305,000 to $415,000 for three-bedroom units, and $575,000 to $725,000 for three- and four-bedroom penthouses.
A real estate consulting firm for the county said in a written report that the proposed prices at Marina City Club are “comparable” to prices of condominiums in other luxury and water-oriented projects.
At Wednesday’s meeting, consultant James A. Rabe said that by comparable he meant that the proposed prices fall between the highest and lowest sale prices for condominiums in competitive market areas.
However, his report states that in terms of average sale prices, the proposed Marina City Club prices are higher than those of 124 comparative condominiums. For example, the report found that the average proposed price for a two-bedroom unit at Marina City Club is $313,200, compared to $243,700 to $253,700 for the two-bedroom condominiums studied in other areas.
Suit Filed
The Marina City Club Residents Assn. has filed a lawsuit in Los Angeles Superior Court asking that the plan be overturned. The suit claims that the plan flouts an earlier grand jury warning that costly long-term leases would turn the marina into “a playground for the rich.” A hearing is scheduled for Dec. 2 in Los Angeles Superior Court.
At the meeting last week in Burton Chace Park, residents, including actress Florence Henderson, said they had only recently learned of the plan to sell long-term leases at Marina City Club. Henderson said the meeting was “a waste of everybody’s valuable time” because county officials and the developer refused to make changes in the plan.
In their lawsuit, residents claim that they were not given adequate say in the plan. They have asked the court to overturn the plan and give residents 45 days to prepare for a new hearing with the county.
Protests at the hearings came both from residents who will be forced to move because they cannot afford the lease prices, and from potential buyers who questioned the wisdom of investing in such an unconventional arrangement.
One resident said she had called six lending institutions and was told that none of them would finance such an investment.
Afraid to Buy
Another Marina City Club resident said she could afford the proposed prices, but had decided not to buy because she is afraid that resale would become increasingly difficult as the time remaining on the lease dwindles.
Some tenants said they would be happier if the towers were being converted to condominiums rather than the unusual long-term leases, which they expect to be greeted skeptically by lenders, future buyers and the Internal Revenue Service.
What the county is proposing “walks like a condominium, talks like a condominium . . . but it is not a condominium,” exploded one tenant.
County officials said the county does not wish to offer condominiums because it wants to retain ownership of the marina.
Snyder, citing his track record as a developer of major projects including the 10-tower, 1,500-unit Coronado Shores near San Diego, said he has assurances from major lenders that financing will be available for the Marina City Club leases.
He said he has “a tremendous waiting list” of potential buyers, and that he expects the project to be sold out in 18 months.
Asked to provide proof that the Internal Revenue Service will allow financing costs to be deductible as is mortgage interest, Snyder told residents to consult their own tax attorneys or the IRS for an opinion.
