Don’t Give Too Much Away--Again
Marina del Rey, anchored by the world’s largest man-made small-craft harbor, really is owned by the people of Los Angeles County. It just doesn’t feel like it. That’s because the Los Angeles County officials who have negotiated with private business to develop the marina apparently forgot a basic concept of negotiation: Don’t give too much away.
The responsibility to adhere to that principle is that much greater for the county because it is charged with acting on behalf of taxpayers.
Times staff writer Jeffrey L. Rabin has reported in thorough detail how 804-acre Marina del Rey has become the sweetest of sweetheart deals for a handful of developers who lease the prime waterfront property from the county.
Under individually negotiated leases, the county collects a percentage of each leaseholder’s gross revenues. Back in the 1960s, when the property was nothing more than swampland, it may have made sense for the county to encourage the then-new public/private partnership by giving developers multi-decade leases and requiring that they pay the county only a small fraction of gross revenues generated by the marina’s apartments, restaurants, hotels, boat slips and shopping centers.
Now the county is considering extending some old leases. At stake is whether the county, as public owner, increases its share of the millions of dollars of marina profits or the developers’ advantage is perpetuated well into the next century.
The first extension to come up before the Los Angeles County Board of Supervisors, perhaps next week, is for an 18-acre property called Dolphin Marina, leased by developer Jona Goldrich.
Among the problems in the deal as it is now structured is something fundamental--there has been no appraisal of this property, or most marina properties, since the mid-1980s. Experts consulted by The Times estimate that Dolphin Marina is worth $20 million to $25 million. In 1990, based on a reasonable 8% return on the value, it should have produced at least $1.6 million for the county; the county collected $942,000 in rents. Yet county officials estimate the property generated a pretax profit of $3 million for Goldrich. This is a partnership?
No wonder another developer calls Marina del Rey “the greatest real estate investment in Southern California.” No doubt it is--but not for the “owner” taxpayer.
Each of the marina’s 56 commercial properties must be formally appraised. The county can’t know what to fairly charge in rents when it doesn’t even know the value of what it owns. The county must have such basic information before it can hope to secure the best and fairest deal for the taxpayer.
