Long Beach Strives to Salvage Troubled Waterfront Project

Plans for the Queensway Bay redevelopment project on the Long Beach waterfront have stalled again, threatening to unravel efforts by city officials to remake their downtown into one of the hottest tourist destinations in Southern California.

In recent months, two major movie theater chains that were considered anchor tenants have had to bow out or face serious questions about financial viability because they are in bankruptcy court.

That has city officials scrambling to salvage their hopes for a $100-million entertainment and retail complex, the final phase of the Queensway Bay plan. They have canceled a November groundbreaking and are considering other uses for the proposed 18-acre complex that is already 1 1/2 years behind schedule.

“This is a major problem. Theaters are a big portion of the project,” said Bob Paternoster, a city employee and director of the Queensway Bay development. “Other leases could fall because they are dependent on a theater being there. We have major work to do.”

Of particular concern is the Aquarium of the Pacific, a $120-million facility whose success officials say partly depends on the sharing of visitors with the entertainment and retail component. The aquarium, which opened in June 1998, is across the street from the site.

As it now stands, Queensway Bay is a massive waterfront project that includes the Queen Mary, the aquarium, the Rainbow Harbor marina and the proposed entertainment complex.

Planners envisioned 12 buildings with theaters, more than a dozen restaurants, banquet facilities, retail outlets and a Ferris wheel. The idea was to recapture Long Beach’s former reputation as a West Coast Coney Island, drawing people to the waterfront as it did in its heyday from the 1930s through the ‘50s.

The site is south of Ocean Boulevard between the aquarium and the Long Beach Convention Center.

At first, officials said Edwards Theaters Circuit Inc. would be the anchor tenant. But in August, the city announced that Edwards was in bankruptcy court seeking Chapter 11 protection from creditors. After weeks of speculation and official reassurances, Edwards pulled out of Queensway Bay.

Then on Oct. 13, problems surfaced with Edwards’ replacement. City officials announced that the Los Angeles-based Resort Theaters of America filed a Chapter 11 bankruptcy action as well, jeopardizing its lease with Developers Diversified Realty Corp. of Ohio, the builder of the entertainment center.

Under terms of its lease, Developers Diversified can cancel the agreement if Resort Theaters’ finances come into question.

“DDR has the right to reject the lease,” said Jeff Adler, a spokesman for the developer. “No one has officially pulled out yet, but the theater’s status in the project is a question mark.”

Richard Lawrence, the chief executive officer for Resort Theaters, said his company still has a signed agreement with the developer, and the firm’s bankruptcy shouldn’t affect its involvement in Queensway Bay.

“We executed a lease, and we are working to get the theater done and operating,” Lawrence said. “This is a great project. Everything is in place. No one has informed me otherwise.”

Resort, like Edwards before its departure, wants to open an IMAX theater and a 15-screen multiplex cinema with stadium-style seating and the latest sound equipment.

Project supporters contend the entertainment complex might be the most important piece of the city’s waterfront ambitions because it would help lure more visitors to the area’s attractions, including the 2-year-old Aquarium of the Pacific.

“The projects are mutually supportive,” Paternoster said. “The aquarium was counting on the entertainment complex being opened by now. It all becomes a great attraction when everything is there.”

The aquarium has suffered a steady decline in attendance and revenue since its strong opening in 1998. Aquarium officials predict the attraction will have about 1.1 million visitors for fiscal year 2000, slightly more than half of its initial projections of almost 2 million visitors a year.

The latest financial reports show that the aquarium lost $2.2 million for the nine-month period ending in June. The figures do not include receipts for the summer months, which are the facility’s busiest.

Now, the problems of both companies, which have been hit hard by the downturn in the theater industry, have raised questions about whether Queensway Bay should depend on such entertainment businesses to draw people, officials say.

“It is time to reevaluate the entire thing,” said Vice Mayor Dan Baker. “The City Council has been very patient with the builder, but the plan with a theater is very much in doubt. . . . This plan is just not working.”

City and aquarium officials partly blame the declining attendance on the fact that Queensway Bay is well behind schedule. The new delay “certainly doesn’t help the aquarium,” Baker said.

City officials say the new delay may provide a chance to reopen the planning process and allow more input from community members who have been interested in the vacant site across the street from the aquarium. Queensway Bay was supposed to open this summer, but the new completion date is April 2002.

“We now have a golden opportunity to include more people in what Queensway Bay might be,” said Councilman Ray Grabinski, who represents the 7th District. “There are some pretty good ideas out there. We need to listen to them.”

Some of the proposals include more open space, an international marketplace, museums and an amusement park reminiscent of the Pike, a tourist draw that lapsed into a dangerous slum before it was torn down in 1991.

Baker said city officials will meet to discuss the alternatives with representatives of Developers Diversified this month. They may consider scaling back the Queensway Bay project or changing its nature entirely.

Critics of waterfront redevelopment dispute the city’s predictions that Queensway Bay eventually will attract 10 million visitors a year and reverse the aquarium’s declining attendance.

“At least the public is safe for the time being from the City Council’s misadventures,” said Marc Wilder, a former council member who opposes the project. “They better start looking for a real solution to the aquarium mess.”

Aquarium officials say they expect to break even by the end of the fiscal year by cutting expenses, developing new exhibits and seeking alternative sources of revenue.

“When it is done, we believe Queensway Bay will help drive our attendance,” said Tammy Brailsford, the aquarium’s chief operating officer. “We’ve decided not to wait anymore. We’re developing business strategies so we can operate independent of Queensway Bay.”

Wilder and others have taken their concerns about the entertainment complex to the State Lands Commission, which oversees the use of tidelands by cities and counties entrusted by the state with their management and development.

Commissioners must decide whether the uses proposed for Queensway Bay are allowable under the state Tidelands Trust, which allows for some developments consistent with maritime commerce, navigation, recreation and fisheries.

Project opponents contend that movie theaters, retail shops and restaurants are not marine-related and therefore prohibited by the trust. City officials say that the uses are legal and that similar uses have been approved in the past. The State Lands Commission is scheduled to release its conclusions in November.