Council targets Mile center

  1. Newport Beach city officials hope a buyer emerges for a vacant Mariners Mile shopping center that has attracted vandals and vagrants, or else it could take legal action to take control of the blighted area.

City Atty. David Hunt announced this week that a buyer has emerged who is interested in purchasing at least some of the vacant shopping area near West Coast Highway and Dover Drive.

The owner, developer Mariners Mile Gateway LLC, could enter into escrow with the potential buyer within the next two weeks, he said.

The City Council has made cleaning up the vacant stretch of storefronts on Mariners Mile one of its top priorities this year.

The row of aging shops with broken windows on a weedy lot has generated numerous complaints from residents over the past few years, Assistant City Manager Sharon Wood said.

Those complaints have subsided somewhat since Mariners Mile Gateway gave the buildings a coat of paint and put up a new fence late last year, she said.

On Thursday, Wood said she could not comment on what a city cleanup in the area might entail, except to say that it might include taking legal action.

In August, Newport Beach sent Mariners Mile Gateway a notice that the city could sue to take control of the land to speed up its development, Hunt said earlier this week at a council meeting.

Mariners Mile Gateway has not been able to clean up the property because of a heated legal battle over what was to be an upscale shopping center on the site, Doug Beiswenger, a partner in the firm, said Thursday.

Mariners Mile Gateway acquired the property in 2004 with the intention of building Bel Mare, a 56,000-square-foot shopping center with a Mediterranean theme.

Rite Aid was to be the anchor tenant, but Mariners was unable to secure the necessary California Department of Transportation approvals to develop the center as originally planned.

Rite Aid sued Mariners for $30 million, alleging the developer did not have the right to terminate its lease after Caltrans would not grant the proper approvals.

Rite Aid obtained a court order that halted any development on the property.

The injunction barred Mariners Mile Gateway from doing anything with the property other than what was spelled out in Rite Aid’s lease, which was a city-entitled development.

Since then, the empty storefronts have attracted graffiti artists and transients.

Rite Aid’s lawsuit was dismissed in September 2008 after the judge ruled Mariners Mile Gateway had the right to terminate Rite Aid’s lease and an injunction that prevented Mariners Mile Gateway from doing anything with the vacant shopping center was lifted.

The court ordered Rite Aid to put up a $5-million bond to cover the Mariners Mile Gateway’s damages and to pay out roughly $1 million for the developer’s legal costs.

Mariners Mile Gateway put the property up for sale about six months ago and has plans to fix it up, because the court order blocking any work has been lifted, Beiswenger said.

The developer would not disclose Thursday what price it is asking for the property.

“Now that we have prevailed in the litigation and the injunction has been lifted, we look forward to cleaning up the property,” Beiswenger said. “That litigation is what has caused the delays in doing anything with that property. We were completely blocked from doing anything.”

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