(Nov. 20, 2015) -- As seen LIVE and reported in summary form on our front page, the City Council voted In view of the long-term significance of this item, LBREPORT.com provides direct access the text of management's agendizing memo and on-demand access to audio of the entire proceeding below. [Scroll down for further.] |
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For on-demand, quick launch audio (MP3), click here. The Council approved the long-term lease without seeing (or showing the public) its full text (city management provided an agendizing memo that it says contained the proposed lease's major points) and without questioning the new long-term lessee itself about what it plans to do with the City's property. (Councilwoman Price made a generalized inquiry and received a vague generalized response from city management, transcript below.) The Council also declined to pursue Tidelands/taxpayer revenue issues about the lease raised in Council testimony by retired Deputy City Attorney Jim McCabe (who oversaw the Queen Mary leases when he worked for the city) and didn't respond to an inquiry by open-space advocate Ann Cantrell about what the lease may or may not say about the future of adjacent Harry Bridges Event Park next to the ship.
The company's website describes Urban Commons, LLC as follows: Urban Commons, a Los Angeles-based real estate investment firm, specializes in hospitality and residential income generating assets. Urban Commons targets value-add property acquisitions in highly populated, predictable markets. With decades of cumulative real estate investment, development, and management experience, the company has a proven ability to thrive in the US real estate market throughout all market cycles. Urban Commons owns, manages and invests in a variety of assets including land, apartment buildings, condominium projects, hotels, retail and commercial properties... The company website indicates that in addition to a Los Angeles office, lessee Urban Commons also has a Hong Kong office. Press releases on the firm's website indicate it purchased the Sheraton in Pasadena, Ramada Hialeah Miami Airport Hotel, Comfort Inn & 110-room Holiday Inn in San Mateo; Embassy Suites Palm Desert; Radisson Plaza San Jose; and Land for Hotel Development in Grover Beach, CA. Scroll down for further
[Mr. McCabe]...[T]he City, the Tidelands, beaches, recreation will receive nothing from this lease. There is $300,000 in purported rent that goes right back into the ship that we're giving away for 66 years, a new 66 year period. We'll never get the 10% of gross revenue rent because obviously this is a net profits situation in which you'll never get any rent until Urban [lessee] gets a whopping 9% of its return every year for the next 66 years...This is a very sweet deal for Urban, entered into with almost no public notice... Mr. McCabe offered to answer any questions if any Councilmembers had some; Mayor Garcia responded: "Thank you. Next speaker please." Mayor Garcia later posed that Brown Act issue to City Attorney Charles Parkin, who cited CA Government Code section 54954.2 (requires "a brief general description of each item of business to be transacted or discussed at the meeting...[and] generally need not exceed 20 words) and said the city's agenda notice was legally sufficient in referencing the lease and providing the exact lease number. [The agenda notice text was: "Recommendation to authorize City Manager, or designee, to execute any and all documents necessary for an Amended and Restated Lease and Operations Agreement No. 22697 and concurrent assignment to Urban Commons, LLC, as Successor Lessee to Garrison Investment Group, LLC. (District 2)"]
In keeping with current Long Beach practice, city management didn't provide the Council or the public with the proposed lease text on which the Council would be voting. On November 12, LBREPORT.com requested a copy of the proposed lease; within 90 minutes, our request was declined by LB's Director of Dept. of Economic and Property Development, Mike Conway, who replied by email that "[t]he major terms and conditions of the Restated Lease are included in the City Council letter [agendizing memo.] The Restated Lease remains in draft form. When completed, it will conform with the major terms and conditions included in the City Council letter and will then become a public document." [Without waiving our objections to the City's response, LBREPORT.com has requested a copy of the lease; our request is currently pending.] The terms of what the actual lease text says or doesn't say became a matter of public inquiry during the Council item. Open-space advocate Ann Cantrell noted that Harry Bridges Events Park (adjacent to the Queen Mary) was created as open space mitigation for construction of the Aquarium complex, and the mitigation made part of the city's Local Coastal Plan approved by the Coastal Commission. Accordingly, Ms. Cantrell asked if the new lease would let the new lessee put some type of development on what is now open space. Mayor Garcia declined to seek a response to Ms. Cantrell's this question and no Councilmembers pursued the issue on their own. During the agenda item, it was disclosed that an advisory "task force," chosen by Mayor Garcia and approved by the Council in June 2015 to offer suggestions on developing the surrounding land hasn't met to date...and isn't scheduled to meet until early January 2016 [after the lease is presumably signed.] Mayor Garcia indicated the "task force" would seek public participation and input. Councilwoman Suzie Price acknowledged the creation of the Task Force but sought further information. She asked Development Manager Conway: "In terms of development plans, development desire, given your knowledge of the project and the partners we're going to be working with?" Mr. Conway replied: "There has been some considerable discussion as to potential uses on the site, and as demand analyses indicated it will likely be entertainment oriented...We expect that given the constraints of the site and the Tidelands restrictions, that entertainment uses are likely going to be predominant on that land but the actual elements we would like to get more feedback from the community and the task force on that." No representative of the lessee spoke. Vice Mayor Suja Lowenthal said she has had deep interest in the Queen Mary, which has been part of her Council district during her now-nearly-ten year incumbency. She said she was looking forward to an exciting future for the ship and praised exiting lessee Garrison (a lender which acquired the lease in a foreclosure) for making investments in the ship. Prior to Garrison, the lease was held by Save the Queen which acquired the lease in a bankruptcy proceeding (triggered by City Hall's position on rent credits) involving Queens Seaport Development Inc,/QSDI) which sought and received a 66 year lease from the City in the mid-1990s under Mayor O'Neill's administration. Wrapping up the Council discussion before the ultimately unanimous vote, Mayor Garcia voiced enthusiasm for the new lessee and the future of the ship and surrounding property. "This is an opportunity to build something spectacular adjacent to the Queen Mary...that respects the fact the Queen Mary is and will be the centerpiece of this development" and said "we're going to engage in a very open and transparent process for the community can come in and be able to comment..." blog comments powered by Disqus Recommend LBREPORT.com to your Facebook friends:
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In public testimony, retired Deputy City Attorney Jim McCabe said the agenda item "is pretty glaringly in violation of the Brown [open meetings] Act in not even mentioning the Queen Mary." Mr. McCabe said, "This is a clear violation of the Brown Act and should be of concern to all of you, because if it's found to not be sufficient, what you do tonight will be null and void." He continued:
