...This matter was originally agendized for the Sept. 11 meeting which was canceled due to the events that afflicted our nation that day. This week is the only opportunity for a full and open discussion of the land exchange agreement in advance of Monday's [Sept. 17] State Lands Commission meeting in Sacramento. It would not be appropriate to present something to the State Lands Committee [sic] that did not reflect the direction of the Council...Some have questioned the appropriateness of this special meeting, given the somber mood of the city and the nation. If there were another way to address this issue, I assure you we would have opted for it. But as the President himself has said "the nation must go on with the nation's business." The Congress is back is session. The state legislature has met virtually continuously since Wednesday. So addressing this issue of local importance is not inconsistent with the behavior of other bodies of state and national government...

...The exchange agreement before you represents the culmination of several months of intensive discussion between our staff and the staff of the State Lands Commission. As you will recall, the basis for the proposed action before you was discussed with the City Council in open session on August 28, 2001...I believe that State Lands Commission own staff report provides a proper perspective on this transaction where it notes, and I quote, "The Queensway Bay parcels have been rendered useless for commerce, navigation and fisheries and the L.A. river parcels may be used more effectively for public trust purposes than the Queensway Bay parcels." Their staff report goes on to note, "The three acres of the Queensway Bay parcels are relatively small in area when compared to the thousands of acres of filled and unfilled trust lands held by the city, and the L.A. river parcels have greater public trust value than the Queensway Bay parcels."...Accordingly, "the staff believes that the facts support the proposed exchange is consistent with the public trust needs in the area."...

...Madam Mayor, I have a motion to make before we hear the audience...[H]ow we conduct business is far more important than the business that we conduct...Tomorrow is a national day of mourning. I think our picking this time, or even tomorrow, would be inappropriate...I'm making a motion that we lay this issue over until next Tuesday [Sept. 18] because no matter how it turns out, we will be extremely criticized for moving forward at a very sensitive time...

[The motion died for lack of a second]...

I don't think that us having this meeting tonight is any more disrespectful than myself going back to work today...We can pay our respects in the proper way, but we still have the business of government, not just here in Long Beach, the state of California and our federal government. As our President made clear yesterday, the business of government must go on.

And I strongly suspect that even had this incident not occurred, this tragedy in New York, most of you still would not want this hearing tonight for other reasons. That's why I strongly support, we need to do it, we need to do it now.

...Tonight I'm wearing the Chief Financial Officer's hat of the [LB Area] Convention and Visitors Bureau. The Convention and Visitors Bureau polled their board today on just the issue that's before you, that is the and swap.

And the land swap was significantly supported by the majority of the board of the Convention and Visitors Bureau. [Yes, 17; No, 1; Abstain, 1, Absent, 4 Info provided Sept. 14 per Exec Dir. Steve Goodling]. On a personal note, I think that it is a very well structured transaction. The property we're giving up is going to be used the same way it was planned by the city, and ultimately will come back to it. And no matter what the total final configuration of Queensway Bay looks like, having the ability to move ahead on these parcels without some of the restrictions, I think is going to be very positive for the city in the long run.

...I was former chairman of the Queensway Bay project [advisory committee] and it surprises me to hear some of the comments I'm hearing today. They were a lot different than the comments that were made to me by individuals as I was chairing that particular committee....The Queensway Bay project should have been built four years ago. A lot of things came into its way. I still believe it's a viable project. I still believe that it will bring to the city of Long Beach what we envisioned that it would bring four or five years ago. It must be built. We can't leave that land fallow the way it is right now. We had a park there. It did no good. We must have something there that will be a benefit to the city and to the Aquarium...I believe that this land swap is something that is necessary. We're not losing anything as our City Manager tells us, as a matter of fact, I think we will eventually gain. This project must go ahead and I'm all for the land swap.
...

For several reasons, I'm beyond angry that you've called for this special meeting...

...[T]he many people who are so opposed to the [developer] DDR plan for our public property are not your enemies. We just represent the thousands of your Long Beach constituents who love our city and want it to be a special place for us and visitors to enjoy...Week after week we have tried to explain all the legal reasons why the present Queensway Bay plan is a bad idea. Now I'd like to give the common sense ideas about why it should be dumped. Using our ocean front property for a movie theater and a mall type, large stores doesn't make sense. Who will pay for parking to sit in a darkened building when there would be a beautiful view of the waterfront we're so blessed with to see movies they can see anywhere else?...Please don't destroy the potential we so fortunately have for making the Queensway Bay area a very special place for us and visitors to enjoy. Please dump, pull the plug, on the DDR plan. This so-called land swap would not only not benefit the public but it would take away precious waterfront possibilities...

...Returning to business as usual is something I appreciate...Tonight's meeting is not business as usual. Business as usual would be going on with our regularly scheduled meeting next Tuesday night. This is an extraordinary measure you are taking. Please do not tell the world that business as usual in Long Beach is at all cost, cramming a real estate deal down peoples' throats...

...In creating Queensway Bay, you eliminated downtown's beach. No surfer would tell you that it was a good beach; it has no waves. But it was wet and at that time it was clean and the children who lived downtown did go down there...We have had no mitigation of that. There is no pool in the downtown area, and yet we've got a pool over in Belmont Shore right next to the beach, and they've still got their beach. Then we get Chavez Park, and we're told that the part between the freeway [median] will be part of the park as soon as they can get a bridge put in, because we don't allow our children to play on the freeway, and we're going to have volleyball courts, soccer fields and tennis courts...Now, you're going to trade it off and we're going to get picnic tables and a hiking trail...

Here I am, yet again, telling you to stop taking our parks...You answer to us, ladies and gentlemen, not the other way around. And until and unless you get that in your heads before you make decisions like this and stop alluding to that you know what we're already going to say, because you don't, you have the obligation if we say it a million times to listen, but you refuse, and you make up your minds before you get behind the rail...Do you know how hard it is for us to be here?...Don't make these decisions in haste, and if we are angry, so be it. Listen to us.

...We are going to anchor one end of Pine Ave. with WalMart. We are going to anchor the other end of Pine Avenue by "Towne Center by the Sea." [Towne Center is large shopping center in ELB on Carson St. near the 605 freeway]. What you've got is almost a duplication of what's up on Carson, and it is average, just average by any city standards and we're going to take the best property in our city and build another average project, with paid parking. Now I want to know who's going to come. It just doesn't seem to me, I don't think anybody in my district, [Councilmember] Jackie Kell, is going to come. I think we're getting pretty P.O.'d about this city spending our money the way that you're spending it and we'll never see a return on it...That's just not good business and you are elected to make good business decisions...

I'm Vice President of Government Affairs for the LB Area Chamber of Commerce. I'm here this evening to provide the Chamber's support for the City of LB's proposed land exchange with the State Lands Commission.

The retail and entertainment component of the Queensway Bay project is an integral part of the continued revitalization of what is to become one of California's more unique downtown areas. The completion of the Queenway Bay project is important not only for downtown, but for the city as a whole, providing entertainment and services to be used by tourists and residents alike.

The Chamber believes this proposal will boost this project over one of its final hurdles, moving us toward a groundbreaking. Further, the proposed land swap would make available open space along the Los Angeles river in exchange for what is now a parking lot, long slated for commercial development.

The Chamber urges the City Council to approve the land exchange this evening...

...The map that you have in your [agenda] packet does not show the same thing that the map from the State Lands Commission shows, which is that the whole wetlands area by the Shoemaker bridge, the 6th St. bridge, belongs to the railroad. And when I asked Paul Thayer about this, I said is this part of the land swap? He said no. I said well, how are they going to make a wetlands with just one little area where the water can come in? All the rest belongs to the railroad...His answer well, that's up to the city to acquire that land, maybe the railroad will give it to them.

I also asked about the part of Cesar Chavez Park which most of us think of as the freeway median, since there's no public access to this, I asked Paul Thayer does this affect the appraisal value of this median. He said yeah, we've been having a lot of trouble with our state appraiser, convincing him that this is going to be an equal swap.

I said how are they going to get access? Well, that's for the city to do. They can either put a bridge across there or they can move the freeway.

Now it doesn't matter whether the public trust allows volleyball, soccer or whatever out here. This is not going to be accessible, and if it were accessible, do you want children playing in the middle of the freeway, with all that pollution that's going on?...I would beg you to please, I think it's in your power to ask the State Lands Commission, to take this off of their agenda for Monday, so that there can be a better study of all that's going on.

...For the last ten years we have been making it clear that an entertainment use is not a permissible land use under public trust doctrine. Didn't go for Disney Sea, won't go for this, and we've consistently said that at least for the last decade...

...It's not really a land swap, what it is is a swap in land use. And that really changes things, obviously, under CEQA. This is, as the staff report points out, covered by CEQA. I would say beyond that it does require an Environmental Impact Report. That's what's supposed to be in front of you so that you can make those decisions...

...Unlike the Camden Property, which was a legitimate land swap...this is not that case, and I urge you to do the math...That shows that the Camden Property was looked at at $3,361,111 per acre. Also, if you look at what this intended use is as wetland, that's $34,000 an acre. We're off by a factor of 10 both comin' and goin'. And just use $605,000 for .18 acres obviously multiplies out. That means if you add that up, we should get 334 acres of wetland for that swap.

It's not equitable, it's not legal...

...I can't really talk to the legal issues or the economics of land values, but we are very, very supportive of your proceeding with the Queensway Bay project. We think you've done a wonderful job all the way along in this process.

I had very little to do with the original plans for the Aquarium. I think that they were incredibly far sighted and we have an Aquarium that I think our citizens and our volunteers certainly and all of our employees are very proud of...

I think that what you did with the Rainbow Harbor is fabulous. People that decry that we don't have, talk about parks and how wonderful it is to have parks, which I certainly agree with, but I never hear anybody say anything about how beautiful Rainbow Harbor is, and how beautiful the park is that surrounds Rainbow Harbor, and how beautiful the lighthouse is. And I think we're very, very fortunate to have that amenity next to the Aquarium.

I think that the support you've given to the Aquarium when it has had the financial stress that it's had has been exemplary. I mean, you've not wavered, you've taken risks, obviously the Aquarium was a risk to begin with, but it's a risk that, I think all of you...deserve credit for having taken that risk and done something that's exemplary and has led the city to the next level of how it can develop.

Even back to the Pine Avenue developments, they truly are wonderful, and you should all be very proud of that...

...Let me say this, the Aquarium isn't perfect, and we're doing lots of things to make it even better...And I think Queensway Bay is an example that needs more work. We need to make it as good as we can possibly make it, and I think all of you agree with that.

But we need to proceed. But we need to think positively, we need to have creativity. There are things we could do in Queensway Bay that will make it a wonderful, wonderful project and I'd urge you to not only continue but don't lessen in your efforts to make it as good as it possibly can be, and we at the Aquarium thank you very much for the tremendous support you've given us.

I chair an organization in Long Beach called ECO-link, which is a coalition of environmental organizations...

...After listening to some very intelligent, articulate people with some facts that need to be considered, I think it would be pretty frightening if you go ahead and pass this without all those considerations...

...This City Council and the Mayor entrusted me enough to appoint me to the Marine Advisory Commission some years ago. I was also trusted enough to serve on the Queensway Bay Citizens Advisory Committee, which Mr. Infelise chaired, and I trust all of you the same way you trusted me.

Let me tell you that that Committee approved the plan that is the same plan that's before us now...We worked very very hard to come up with a plan that does not look like a mall.

It is a plan that features open spaces. It is a plan that features pedestrian walkways. It is a plan that was carefully looked at from the perspective of how can we do small public festivals, how can we do art shows, how can we do music things in the center of this wonderful project.

And it was planned to have all of the amenities and all the infrastructure that we need to do that. This plan gives us an opportunity to put something truly unique and exciting. I suggest to you that this is not an extension of "Towne Centers" in Long Beach that seem to be cropping up all over the place. That's not what this is. This is something very, very different, very special, very unique, designed to serve not only our visitors but also the residents, to bring all of us in.

I suggest it doesn't matter whether any of us think we need another movie theater in downtown or not. It's a moot point. The key tenants who we do need to ensure that our visitors and our residents can have lots of activities and lots of reasons to attend this particular destination, they all insist on a movie theater. Without it they won't come, so there will be a movie theater. It's not a question of debate any more. It has to be in order for this project to come to fruition.

And I suggest that it must come to fruition. We've been working on it for so many years, and people who absolutely want to leave it as open grass area keep stalling it. We need to move it forward. It needs to happen. Our downtown needs it. Our city needs it. Tourism, trade, technology, and the residents, we all need it, and I'm trusting you to make the right decision...

...I'm the spokesperson for the Sierra Club. The Sierra Club has as a mission to explore, enjoy and to protect wild places. And when we were formed 100 years ago there was a beach at Long Beach and there was a quality of life in that beach town that was very much to be protected and it was protected for a time.

...[T]here's been over 2,000 coastal mitigation projects like this land swap...What number of those swaps have been successful in terms of restoring and conserving and preserving the natural resource. Is the land healthier, is it cleaner, is public health better in those areas, is property values better or worse?

And the answer is that 17% of those land swaps have succeeded, and the bad news is that 83% of those, in retrospect, after 20 years of study, have not met their objectives, the projects are not successful, the quality of life is not improved, the economics are not better...

...Why are you pursuing a project that, while it might be commercially valuable in the short term and it might help the Aquarium which we want to help, we're asking you to take a century long perspective that the Sierra Club has, and look at the fact that 90% of your beaches and parks and coastal wetlands are gone, forever destroyed and can't be restored, and the remaining 10% is being squandered in stupid projects.

...I am the General Manager of the Long Beach Convention Center. I am for the land swap presented by the City Council. I think it's imperative that we move forward with the development of the Queensway Bay.

I think it's important that we finish what we start. We've been promising our clients at the Convention Center the development of Queensway Bay for several years. This will provide critical mass for the Queensway Bay and give those attending events at the Convention Center along with their families, retail, dining and entertainment to enhance their experience in our community...

With the development of Queensway Bay, the Aquarium, the Queen Mary, Shoreline Village, the expanded Convention Center and Pine Ave., we'll be able to present meeting planners with a complete package to entice them to come to Long Beach.

...I have a business at 144 Pine Ave, Mum's Restaurant, which has been there since February of 1988...I'm going to wear two hats...I am on the Executive Board of DLBA [Downtown Long Beach Associates]. The DLBA's position is they don't agree with the use of the tidelands site, using movie theaters on the tidelands site. That is their position.

Now, John Morris' [personal] position, which has been this way from day one, you've been using numbers of nine million people that you're going to attract to the Queensway Bay. That is about as bogus as you can get. Those numbers are full of it.

...David Gordon just...said you know, we should finish what we started, which we started in 1994. Well guess what, I started my project in 1986, and we're still waiting for all the elements that are needed to support the core of the downtown that were started back in 1986, that we've been promised and promised and promised...

[W]hat you're building on that tidelands site is not the "wow" that when Mr. [Alan] Lowenthal sat in the seat where Mr. Baker is today, they promised us a "wow."...

Your priorities are screwed up...Why are we doing what we're doing? We need the critical mass to support what we started back in 1988. We're not against development. We want the right development.

The Queensway Bay as it is today does not have any "wow" whatsoever.

...I'm the president of the West End Community Association. I'm here today representing the Board of Directors of the West End Community Association which in fact represents a majority of the downtown residential area...

...We are in full support of the DLBA regarding their decision to vote against DDR's movie theater plans at Queensway Bay and the lack of creativity, especially with the current problems with the movie industry today.

Secondly, with this development going in, this would essentially take away from Pine Avenue...which has stood firm as a major downtown attraction for convention attendees and tourism.

...WECA would like to let you know that we no longer support the current project. We have great concerns and you should too...We need to rethink things and see what the community not only wants but what the community needs, and a movie theater and more restaurants is not one of those needs.

...I live in Seal Beach...You are heading for a potential train wreck and you should be ashamed for doing what you're doing as usual.

You had two years of planning supposedly with all kinds of public meetings and those people didn't even think about the fact that this was protected by tidelands trust. They didn't even consider it. That's supposed to be planning? Who contributed to that? They didn't even see that it was supposed to be tidelands trust.

Now this is just a bad idea. If this goes through, this mechanism can be used elsewhere, so it's not going to go through. There's going to be massive opposition. Whatever it takes, we're going to fight it. Everybody's going to fight it. You're not going to go. It's a stupid idea.

The only thing that saved Huntington Beach, as I talked with a reporter today, was the fact that they had tidelands trust on their beach and they were not able to go forward with a stupid project like this, with staff to staff, just the same sort of thing...

We will battle this tooth and nail. The only people that support this project are those who have crashed Long Beach and caused us to have the current train wreck. When you destroyed the downtown to build that stupid mall, you didn't support the small businesses and you went through all the redevelopment money and all the tidelands trust by destroying our existing downtown.

We heard testimony here that the downtown was dying in 1958. That's not true. Long Beach was a beacon of where everybody used to come because it had a beach and it had entertainment and it was lively. Now, it's dead, and it's getting deader...

Anybody who votes for this project not only should be ashamed of themselves, you should be taken to task...

...On behalf of Washington Square Neighborhood Association, we're opposing this project...

...What is the hurry? This land swap involves the 6th St. wetlands parcel...[O]n August 21, Mr. Taboada assured you it would be a park whether or not Queensway Bay happened or whether or not the land swap happened.

So we don't gain any new park, and the state doesn't get any new park from this land swap. The land swap also involves a park that is nothing more than a letter of intention from the city.

The grant funding hasn't been approved. The CH2M Hill feasibility study is not due until April. In order to work as described, the city still has to figure out how to purchase and remediate the Union Pacific parcel that separates the 6th St. wetlands. The remainder of the land support is a freeway median. You don't have the money to move the traffic lanes...

And all this time, the city has been telling the 1st district Cesar Chavez Park is 23 acres. It includes 10 acres of freeway median. Today, we learned the 1st district children will lose their soccer and tennis and volleyball.

...Please ask the State Lands Commission to postpone this...

[Baker asks City Manager to discuss financing of the QW Bay]

City Manager Taboada: ...Regarding the development project now currently undertaken by DDR, we have a project where we are leasing to DDR approximately 18 acres of land on which they will build a $100+ million project, approximately 500,000 square feet of development.

And the city is obligated as part of that project to do the public improvements...that includes a parking structure, a 2600 car parking structure, and other parking lots and other public improvements, and those will be financed on the basis of $43 million Mello-Roos bond.

Now that bond is to be paid for from the proceeds of the project, and again much like the Aquarium, the city is backing it financially but is not obligated to make the debt service on that particular project.

The only investment that the city has in the rest of the project is that we will forego rent from the project for approximately 14 years until the return on investment is made by the developer and at that point they begin paying rent and the city starts to realize direct revenue.

Indirectly, we'll receive sales tax revenue and, if a hotel is built, transient occupancy tax, and other indirect revenues from the total development of the project...

Vice Mayor Baker: ...There have been tremendous, heartfelt and very interesting comments made by the public tonight, mostly dealing with the issue of whether Queensway Bay should proceed or not. Of course, that is not the issue before us this evening but it's certainly what a lot of the discussion has centered on. Please outline for me the contractual obligation of the city and what we can or cannot do as it relates to going forward with the Queensway Bay project, and if you feel the [City] Attorney should answer that...

City Manager Taboada: Well, I would attempt to answer that based on the issue of entitlements and I've said repeatedly that the project is fully entitled. We believe that to be true, legally and operationally.

The reason that we're even having this discussion with regard to the State Lands Commission and the land swap has to do with the fact that when we applied for the Coastal Permit from the Coastal Commission, a citizen raised the issue of whether or not the uses contemplated by the project met the state [tidelands] trust requirements.

And the Coastal Commission did in fact issue the permit and simply referred the matter to the State Lands Commission. The State Lands Commission took up the issue and held public meetings here in Long Beach, did a report to their Commission indicating that the uses contemplated in the project were in fact consistent with tidelands uses.

The report was then presented to the Commission, and the Commission had difficulty with some of the uses, not so much because I think of what was contemplated for Long Beach but perhaps on a statewide basis there were other communities that were contemplating projects that were similar but not identical to the Long Beach project.

And therefore they decided as a Commission to not approve or disapprove the staff recommendation but deferred it and in the interim, we were asked by the State Lands Commission to attempt to mitigate the objectionable uses, and that's their term not mine, that were contemplated for the project.

And therefore the birth of the land swap as a means of entitling the project from the state's point of view and allowing us to proceed with the project unencumbered with any cloud on its title.

Our position always has been that the land swap was not legally required, but because we have a long standing relationship with state tidelands, and because we need to continue that relationship with regard to the public trust, the oil operations and other issues that we have with them from time to time, that it was in our best interest to attempt to come to a successful and negotiated conclusion that would allow them to make a decision and not compromise their position on state trust uses.

That's why we find ourselves in this position. As far as we're concerned, the project is fully entitled and we have no reason not to go forward with it.

Vice Mayor Baker: Very good, thank you Mr. Taboada. Now let me hone in on the issue of the land swap, which is the only agenda item this evening...And now as it relates to this proposed land swap, we are proposing to move certain parcels of the property which is now a cement parking lot...

City Manager Taboada: That's correct.

Vice Mayor Baker: ...which is currently under the public trust...

City Manager Taboada: Correct.

Vice Mayor Baker: ...and taking that out of the public trust and putting a new set of parcels under greater public protection from development or different types of use in the future.

City Manager Taboada: That's correct.

Vice Mayor Baker: To me, that is, and correct me if I'm wrong, that is the only issue before us this evening.

City Manager Taboada: That's correct.

Vice Mayor Baker: Do we take that public protection and move it from what is now protected, and exchange it for a different set of parcels and give that protection to those parcels?

City Manager Taboada: That's correct.

Vice Mayor Baker: And the parcels that we're theoretically removing the protection from right now, years ago it was a beach, it was wonderful, we are not there right now. Right now it's a cement parking lot...

City Manager Taboada: That's correct.

Vice Mayor Baker: ...black top. In the future, the proposed parcels that will go under public protection, briefly summarize what those parcels are.

City Manager Taboada: Those are the parcels along the L.A. river bed which are contemplated for open space park land and wetlands restoration.

Vice Mayor Baker: Aside from, totally separate from the issue of whether or not what's proposed to be built, and I know there's tremendous disagreement and dissent on that issue, the issue before us is should we protect, give greater protection to an area of green space, and I know part of this proposed wetlands we authorized a million dollars a couple of weeks back...

City Manager Taboada: That was for a grant application.

Vice Mayor Baker: Right, grant application. Or, leave that protection on what is currently a black top parking lot. To me, that's a very simple decision to make and I am fully supportive of moving forward with this proposed land swap to grant that greater protection to green space and what may be wetlands in the future.

And having heard that, I am going to make the motion to authorize the City Manager to execute the exchange agreement.

Councilman Colonna: Second.

...I have several questions that were brought up to me this afternoon in a telephone call from Bry Myown, and that is about the Master Plan that is approved for Cesar Chavez Park. My understanding is, it seems that the Master Plan that was adopted was for the 13 acres of the park and not for the entirety of the area which includes portions that would be swapped with the cement parking lot...So my concern is, which part of the Master Plan was adopted, what does it cover and as somebody, I think Dan Pressburg brought up, the issue of eliminating the usage of tennis and volleyball...

City Manager Taboada: ...[I]t's contemplated in the Master Plan that there will be variations and if a certain parcel is not suitable, say, for a soccer field, it is suitable elsewhere within the project.

Councilwoman Lowenthal: My question is, is there a Master Plan that was adopted by the Recreation Commission covering this entire area and therefore would require public input if there was a change? And I don't know how much change one considers to be a substantial change.

...Phil Hester, Dir. of LB Parks, Recreation & Marine: ...When the Master Plan work started on Cesar Chavez, there was a committee, a task force that was appointed, that went through the process of looking at the total area. As you know, the primary area of interest was the area between the east side of the 710 freeway and Golden, there was about 13 acres there. Whenever the task force started looking at the whole Master Plan area, they looked at a number of areas adjacent to Edison School, a lot of areas that were not owned by the city at that particular time, with the concept of looking long term as to what the city would like to be able to do with the park and some of the surrounding areas.

What we ended up with was really two Master Plans, one was an ultimate master plan that looked at the broad area and incorporated some of the area in the center area, and it talked about moving the freeway, the 710 freeway, to be able to create a contiguous piece for the total park...That was what was called the ultimate plan, and incorporated a lot of the area again that wasn't city owned or city controlled at that particular time. And that plan, along with what was called the interim plan, which was to address just the 13 acres and any of the land that's city owned, was approved by the Recreation Commission also...

Councilwoman Lowenthal: ...[S]o there's no chance then that the Recreation Commission could come back and say you violated the trust that we put in you when we adopted this overall Master Plan?

Parks Dir. Hester: When the presentation was presented to the Recreation Commission, they were fully aware that there were parts of this particular project that were not under city control at that particular time, and the discussion was, is that at some point and time we would have to come back and make some adjustments to the Master Plan...

Councilwoman Lowenthal: Thank you, and may I continue Mayor? I'd like to know what our liability would be as a city if the land swap is not approved?

City Attorney Robert Shannon: Madam Mayor, Councilwoman Lowenthal. Just that fact, just the fact that the land swap would not be approved, would not cause the city to incur any liability, not in and of itself, no.

Councilwoman Lowenthal: So if this Council chose to vote against the land swap, then DDR could continue with the development?

City Attorney Shannon: That is our position, yes.

City Manager Taboada: Councilwoman, that is the legal position. The operational position is that we worked hard to unencumber ourselves from what would have been, I think, an arduous disengagement with DDR should they fail, or should the city elect to terminate the agreement with DDR. They in fact in proposing the extension of this development agreement [approved by Council vote, 6-1, in February, 2001] with DDR, gave us a disengagement strategy that really limits the city's liability.

My concern is that anything that would prevent the project from going forward on an operational basis, that is, that the lender would find that title was clouded as a result of not having this issue resolved, or that lessees on the project would not go forward with their leases if they thought that title was cleared on this project, that I think might cause some problems for us in the future.

I would want to avoid those kinds of issues and have the ability for this project to either go forward as is envisioned in the extension granted to DDR or to terminate that agreement when they fail to break ground within the required time line that is in this current agreement.

One or the other is, I think, a finite conclusion to this particular issue. I think the issue of the State Lands Commission approval, while not required legally, does in fact present some issues for us with the developer and ones that I would care not to have to work through...