Deal Makers Huddle to Salvage Developments : Culver City: At stake are the controversial Marina Place mall and the Channel Gateway residential and office project. They are worth half a billion dollars.
A back-room deal is in the works to settle a bitter border battle between Culver City and Los Angeles that has threatened to stop the massive Marina Place shopping mall and the Channel Gateway developments dead in their tracks.
At stake in the border fight is more than half a billion dollars worth of real estate development that could transform the look and feel of Venice neighborhoods and worsen traffic on congested Lincoln Boulevard.
The package deal, being negotiated out of public view by developers of both projects and representatives of both cities, is aimed at avoiding a courtroom confrontation that could tie up the two developments for years.
According to a typewritten outline of the possible settlement, it would provide for developers of the $160-million Marina Place mall, proposed for a site at Culver City’s western tip, to eliminate a traffic-generating six-screen theater complex, to reduce the number of liquor licenses, to pay for additional street and traffic signal improvements, and to finance a beach shuttle to reduce prospects for gridlock on neighboring streets.
But none of those concessions would take place unless the city of Los Angeles agrees to to drop a lawsuit against the shopping center project and Culver City promises not to file suit against the $400-million Channel Gateway residential and office project.
The settlement talks, which negotiators say are not final, dramatically illustrate the steadfast determination of developers to move ahead with their projects before the remaining traffic capacity in the Venice-Marina del Rey area is used up.
One important player was apparently not a party to the negotiations: Los Angeles City Councilwoman Ruth Galanter, who represents the Los Angeles neighborhoods that virtually surround the Marina Place site and whose strident opposition to the 1-million-square-foot project prompted Los Angeles’ decision to file suit to block its construction.
Galanter said in an interview Wednesday that the outline of a settlement is unacceptable to her.
“A regional shopping center is not what the Westside needs, particularly close to Lincoln Boulevard and to the beach,” Galanter said. “It’s the wrong land use in the wrong place. . . . I think it’s a bad idea and will continue to object to it.”
Although she is a strong supporter of the Channel Gateway project and a key participant in winning its approval at the city and state levels, Galanter claimed not to know that settlement talks were under way between the developers and the two cities.
In fact, Galanter said she had not seen the outline of the settlement until she was given a copy Tuesday by Los Angeles City Council President John Ferraro.
The push for negotiations came from politically well-connected Los Angeles developer Jerome Snyder, whose Channel Gateway project was likely to become the next pawn in the chess match between cities.
“I put this package together and I negotiated it,” Snyder said in a telephone interview Wednesday while on vacation in France.
Although delays are costly on any large project, Snyder said he feels added urgency with respect to Channel Gateway because the project is designed to contain 544 apartment units financed by $67 million in tax-exempt bonds. The bond financing, made available because Snyder has agreed to set aside 20% of the apartments for rental to low-income tenants, is contingent on the apartments being completed by August, 1992, a deadline that would be all but impossible to meet if Culver City sues to block the project.
Only days after the California Coastal Commission granted final approval of the project earlier this month, bulldozers and earthmovers began working to ready the 16-acre site on Lincoln Boulevard for construction crews. In addition to the apartments, the development at the western end of the Marina Expressway also includes 512 luxury condominiums in two 16-story high-rises, a 300,000-square-foot office tower and parking for 3,460 cars.
Snyder said he began searching for a solution to the legal brinkmanship after a meeting in June in Los Angeles Mayor Tom Bradley’s office in which Culver City Councilman Paul Jacobs warned that Channel Gateway would be held hostage if Los Angeles failed to drop its lawsuit against Marina Place.
For weeks, Snyder said he has been working behind the scenes, talking to Los Angeles and Culver City officials, and representatives of Melvin Simon & Associates, who are the developers of the Marina Place project along with the Prudential Insurance Co. of America.
Ironically, Snyder said it was Galanter who provided the framework of the settlement.
“All the objections to the project, I heard from her, chapter and verse--the theaters, traffic mitigation, liquor licenses, the height of the buildings,” Snyder said. “She also complained to me that they were not doing anything for low-cost housing.”
Snyder said he took Galanter’s objections to Melvin Simon. He recalled that Simon’s representatives asked him, “What the hell can we do to get this crazy woman off our back?” Snyder said he replied, “Try being a goddamn responsible developer.”
Although his account of the wording of the conversation differed, Barry Lindsey, senior vice president of Melvin Simon & Associates, confirmed Wednesday that the agreement is “something we worked out jointly with Jerry Snyder.”
In accord with Galanter’s demands, the draft calls for major changes in Marina Place: eliminating the movie theaters entirely, reducing to 12 from 16 the number of liquor licenses and spending an additional $1 million in improvements to ease traffic congestion, including the establishment of a shuttle bus for use in the Venice and Marina del Rey areas. The pact also includes $210,000 to landscape Venice and Washington boulevards from Lincoln Boulevard to the beach.
“If that’s what it’s going to take, we can take that sacrifice,” Lindsey said. “We have an investment in a piece of property. We’re not going to go away. . . . We would like to start building.”
Both Snyder and Lindsey say they do not know where the deal stands, but they indicated that the disclosure of the proposed terms this week through distribution of the typewritten outline had muddied the picture considerably.
Snyder said he wants Bradley--who earlier this year took part in a protest demonstration at the Marina Place site--to take the lead on settling the conflict.
“This is something I wanted to see the mayor carry,” Snyder said. “I’ve kept him abreast of what’s going on from the very beginning.”
A spokesman for Bradley said Wednesday that the mayor has not endorsed the plan.
However, Galanter’s support is deemed crucial. Snyder said he doubts that the Los Angeles City Council would “overrule Ruth in her own district.”
Snyder said he “kept her out of it” during the negotiations “so she could say she didn’t know anything about it. . . . I didn’t want her to be in the middle of it.”
He said his hope is to “get her on board by getting her constituents to agree it’s a good deal.”
Of particular concern in this regard is a group of Venice community activists who have filed their own suit against Marina Place.
Debra Bowen, attorney for the community group, expressed little enthusiasm for the proposed compromise in an interview this week. If anything, she said, the private deal will probably stiffen the Venice community’s resolve to fight the shopping mall in their back yards.
“It will generate a tremendous amount of anger, and people tend to act when they are angry,” Bowen said.
Intense development pressure along Lincoln Boulevard near Marina del Rey has sparked a race between Los Angeles and Culver City to approve large-scale projects in the congested area before the boulevard’s remaining capacity to handle traffic there is gone. When Culver City approved plans early this year for Marina Place, a large shopping mall at the city’s western tip that threatened to inundate adjoining neighborhoods with traffic and air pollution, Los Angeles sued to stop construction. In retaliation, Culver City has threatened a suit to stymie Channel Gateway, a major high-rise development three blocks away. Faced with the prospect of legal gridlock that could hold up both projects for years, the developers are trying to negotiate a compromise.