State Lands Comm'n Approves QW Bay Land Swap, Adding Conditions Sparked by LB Activist
Hearing attended by LB officialdom & grassroots LB activists
State Att'y Gen'l office says land swap could withstand legal challenge
(Sept. 17, 2001, updated Sept. 19, 9:00 p.m. w/ transcript excerpts) -- In a high visibility session telecast statewide from a Sacramento Capitol hearing room, the CA State Lands Commission (SLC) has voted 3-0 to approve a City Hall sought tidelands trust exchange that will remove roughly three acres of certain QW Bay retail/entertainment use footprints from tidelands trust protection in exchange for putting tidelands trust designation on roughly 10 acres of L.A. river area parcels (including part of a current freeway median) west and northerly of Cesar Chavez Park.
However, LB activists claimed a victory when the Commission, in response to hearing testimony, attached conditions to the swap including a May 31, 2002 "drop dead" date in effect requiring City Hall to be moving foward on delivering what's now promised or have the QW Bay tidelands areas being swapped revert back to state tidelands protection.
Following testimony by LB activist Bry Myown, the Commission (per motion by Commission member and State Controller Kathleen Connell) attached four conditions to the motion approving the tidelands trust exchange:
(1) State Lands Commission approval includes a "drop dead" date of May 31, 2002 for local agreements to be in place;
(2)The developer must be moving forward without phasing on the project;
(3)The development must reflect the existing plan without changes; and
(4) If the May 31/2002 deadline isn't met, the State Lands Commission's approval of the land swap expires and the QW Bay parcels revert back to state tidelands designation.
Several prominent LB area activists trekked over 400 miles (each way) to testify against the tidelands swap including Bry Myown, Traci Wilson-Kleekamp, Ann Cantrell, Norm Ryan, Lester Denevan, Diana Mann and Don May.
LB City Hall sent a high level delegation to support the exchange. LB Mayor Beverly O'Neill, appearing uncharacteristically nervous, her voice quaking at times, spoke briefly. City Manager Henry Taboada fielded sometimes pointed questions Commission member Connell. Also attending from City Hall was Deputy LB City Attorney Jim McCabe.
Long Beach activists sounded several themes, variously criticizing the tidelands swap, its appraisal values and use of a currently inaccessible freeway median (labeled "Asthma Park" by Traci Wilson-Kleekamp) as new tidelands trust land. Pressed on the issue of accessibility by Commissioner Connell, City Manager Henry Taboada said the city plans to make the area accessible but conceded he could not presently commit to the funding to do so, lacking Council approval.
Several activists cited reasons they felt LB City Hall's claims should not be believed, and Ms. Myown explicitly mentioned City Manager Taboada's statements at the September 13 Council meeting to the effect that QW Bay parcels being removed from tidelands trust protection could theoretically be sold at some future time (not now because the property is leased to developer DDR).
The net effect prompted Commissioner Connell to insist on attaching conditions (referenced above) to the Commission's motion approving the tidelands swap.
California Earth Corps chairman Don May's testimony included reference to a letter from an attorney retained by the group to the State Lands Commission regarding alleged CEQA issues. A representative of the CA Attorney General's office responded that he believed the tidelands swap could withstand legal scrutiny.
After testimony by environmentalist and California Earth Corps chairman Don May referenced a letter from its attorney sent to the State Lands Commission, a representative of the CA Attorney General's office said he believes the tidelands swap could withstand legal scrutiny.
Most of the hearing was televised statewide on the California Channel (shown locally Charter Cable channel 21), thanks to a letter to the Assembly Rules Committee (which handles access to the room) from LB Assemblyman Alan Lowenthal, consistent with his position favoring local access to state agency proceedings of this nature. (About 40 minutes of the nearly three hour hearing was preempted by another Sacramento event.)
Following the vote, City Hall issued a press release quoting LB Mayor Beverly O'Neill as follows:
"We are pleased with the State Lands Commission's decision to approve the land exchange between the City and the State which clears the way for our City to move forward with this vital component to our economic development. We have no doubt that DDR will meet its May 31, 2002 deadline. We appreciate the efforts of the Commission and its staff. We are particularly grateful to the leadership of Lieutenant Governor Cruz Bustamante for guiding this issue to a successful conclusion.
The new project, approximately 450,000 square feet of shops, restaurants and entertainment facilities, will provide a much-needed pedestrian and visual linkage between Pine Avenue and the new public waterfront. We are anxiously awaiting DDR's long-anticipated groundbreaking"
The release quoted City Manager Henry Taboada as follows:
Our goal has always been to bring the waterfront closer to downtown. The strength of the original plan was in the creation of a critical mass of activity at the foot of Pine Avenue, within walking distance of the expanded Convention Center and Pine Avenue; the proposed commercial development further knits these areas together as one."
Reached for comment after the State Lands Commission vote, Phil Hampton, LB based spokesman for developer DDR told LBReport.com:
"DDR has been following the City's discussions with the State Lands Commission and is pleased to see they have been resolved. We continue to work on leasing and moving toward a groundbreaking."
DDR, which is not a party to the tidelands exchange agreement, has previously said the tidelands matter was an issue between the City and the State Lands Commission, and it was for the City to resolve.
City Hall sought the tidelands exchange to help facilitate (operationally, not as a legal matter) the QW Bay retail and entertainment project after two of the three State Lands Commissioners indicated at their April meeting (in a non voted action) unease with some of the project's proposed uses in the tidelands.
Prior to the State Lands Commission vote, City Hall repeatedly said publicly that the project is legally entitled to proceed even without the tidelands exchange. City Manager Taboada told the City Council at its August 28 and September 13 meetings that the project has all necessary legal entitlements.
The State Lands Commission does not have permit authority over the QW Bay project. The CA Coastal Commission, which has project permit authority, has previously granted the QW Bay project a coastal permit.
Transcript excerpts of the Sept. 17 State Lands Commission meeting follow. They are unofficial transcripts, prepared by us. Not all speakers are indicated; not all statements by speakers are transcribed; ellipses indicate deletions.
Roughly 40 minutes of the hearing, not televised, will be separately excerpted, transcribed and added to the material below.
...My name is Norm Ryan, I am a resident of Long Beach. I also make my living in the public finance sector...
I just want to sort of warn you that if you have had any promises and those promises have been made part and parcel to any assessment of the land that you are about to get, or the land that you are about to give away, the city, as a resident, has made tons of promises to us and has no problem in breaking them.
To you, they'll take a different form. They will most likely say, gosh, funds are scarce and we really had planned on doing this but you know how it is. This is what you can expect.
If you go forward and accept this swap, I would think that..."aiding and abetting pretend" [is the right term]. It is pretend that the Aquarium and this project, as you said they were complementary, will create the synergy that will attract nine million people to that facility. It is pretend to stand in the middle of a median and say, well this is worth the ocean view property that we're about to swap out of.
And from a resident of Long Beach, it's almost pretend to say that some of the property that won't be expanded for freeway usage or Port usage won't in fact happen, and you'll have traded off recreational land for basically industrial purposes.
The appraisal, it seems to me, to be the ultimate pretend. We have had to scratch and beg for every piece of information that we've gotten...If the staff is concurring with R.P. Laurain and Associates' appraisal, then I love the way that they arrive at the $16 million...
Commission Chair Bustamante (interrupting): Well since you've asked that question, is [State Lands Commission] staff agreeing with the appraisal?
State Lands Exec. Dir. Paul Thayer: Absolutely not, and our staff appraisal came up with different figures, particularly for the Queensway Bay parcel and valued them more highly than the city did. As a result, the surplus that we've identified, over half a million dollars, is less than the surplus that the city came up with, so we in essence sharpened our pencils and decided that the values were not what the city had represented.
Mr. Ryan: It is unfortunate that we were not allowed to scrutinize that report as we were the city's report. And I'd love to be able to find out how, for instance, if they'd used the same residual value formulas that this appraiser used and figured $175 per square foot, and then said well this is what it costs to actually build it, plus the profit margin, what's left must be the $16 million dollar value, or whatever $15 or $20 or whatever you came up.
I would suggest and make a recommendation to you that the best way of doing a comp on this property is to look at the adjacent piece of property that the city is already trying to bond. There is currently a $43 million bond authorization for 75,000 square feet. Now, if you use the same formulation that these people did, a residual value, you come up with about $560, $570 a square foot.
But now the documents say a substantial portion of that money will be used for that; OK, let's say it's half. That still comes up to $286 a square foot, as opposed to the $175 they started out with, clearly a substantial increase over $16 million and would put it somewhere in the neighborhood of $24-25. I don't know if your appraisal concurs with that number, but I'm just simply giving you an alternate method using the city's same logic.
I am strongly opposed to this project. When the [Queensway] Bay was promised to us, that it would not use one dime of taxpayer dollars, and now we are committed to a million and a half a year for what I consider to be a fiasco. I live in Long Beach. I'm almost getting used to the fiascoes. And if this is going to be your first one, welcome.
Commission colloquy: the median west of Chavez Park
...[Discussion of property that would receive tidelands designation west of Cesar Chavez Park]
Commissioner Connell: Is this property completely surrounded by freeways?...So how are we getting access to our property?...How do I get across to this land?
State Lands Commission Exec. Dir. Paul Thayer: You cannot get across now. The only way to get across is to either build the pedestrian bridge that we're talking about, which is why the $1.3 million deduction was made, or to drive there and construct...a turning lane on the northbound...but all of these would have to be improved before the public could use that property.
Commissioner Connell: ...My question is, how do people safely access the site? Where do they park? I mean, there's no point in our getting land that we cannot use ever. I'm trying to answer this question in my own mind today.
Commission Chair Bustamante: There's access but there's no improvements.
Exec. Dir. Thayer: That's correct. There's legal access but there aren't the improvements that the Controller has identified would be necessary for intensive public use here, and that's why we made the deduction on the valuation.
Commissioner Connell: So we have legal access but that doesn't help me as a citizen of Long Beach or as a potential user of the site. I mean, I'm not looking at a piece of paper if I'm trying to get over to that piece of land, I need to know how I do that...I am supportive of what Long Beach as a city wants to do but I, on the other hand, do not wish to accept as a trade property that we cannot get to, so I need to have an understanding today that we are going to be accepting a piece of property that can be accessed, not [just] legally but physically, and I need to have a sense of what it costs to access that site and who's going to pay for that...
I am concerned that we have some advocacy here on the board about a timetable for making this site available for public use.
Commission Chair Bustamante: If you'd like, we can bring the city up. Mayor, why don't you and the Deputy City Attorney...
Mayor Beverly O'Neill
May I make my presentation and then the City Manager and then we can answer some of the questions that have been raised? Lt. Governor and Commissioners, thank you very much for the opportunity to appear before you again on this issue.
After the last State Lands meeting, oh, I'm Mayor Beverly O'Neill, Mayor of the City of Long Beach. After the State Lands meeting on April 24, some of the Commissioners expressed concern about some of the uses proposed for Queensway Bay project. The City Manager and I met with Lt. Gov. Bustamante to get some guidance on the objectives of the city and how the concerns of the Commissioners might be reconciled.
We received valuable direction and the Lt. Gov. was very helpful in arranging a follow-up session with his staff and that of the Commission staff. There has been a long and complex negotiating process since that time. However, the fact is that our two staffs were able to come up with a final agreement on the terms of this transaction.
And I must say we're very grateful to Paul Thayer and his staff who have worked long and diligently to get us to this point, and I know that the Long Beach project has been very time consuming.
I was also happy to note that the Commission's own staff report provided historical background that in 1992, the city started a major citizens planning process to create the Queensway Bay development plan. At that time, the Mayor and the City Council appointed 23 citizens as representatives from all areas of the city to work on this development plan.
Your staff report goes on to describe a planning effort that from my experience was the most sustained and broad based and inclusive of any development proposal that we have formulated in the City of Long Beach. Today's elements of the Queensway Bay plan development are fully consistent with the objectives of that plan approved in 1994.
After a series of delays, we were advised last week that the developer is scheduling a groundbreaking on this long, overdue project. Your authorization of this exchange will effectively remove the last remaining impediment to the long awaited groundbreaking and I request your support of this transaction.
And I'd like to just end by saying we work with the State Lands Commission on many issues, because we are a coastal city we have a very active California Port and we have a Dept. of Oil Properties, and so I value highly the cordial and productive working relationship that the city has enjoyed with this Commission and staff during my time of office.
And I believe the action before you provides testimony to the strength of that relationship. And I do appreciate your stewardship in being thorough, in making sure that we have followed all of the requirements required by the State Lands Committee [sic].
There have been many issues brought up and questions about access, and I think they are included in the City Manager's report and then we would like to have any questions that you might have.
City Manager Henry Taboada
I'll forego my presentation because I think that the issues before us are of more importance than simply restating what is already on the record...
With regard to access, it is an important issue and it's one that we struggled with as a city with how we would utilize that particular park land effectively...
..Everything here, along both sides of Cesar Chavez Park, is really city owned streets that can be signalized if necessary for providing access. We don't think that's the superior option but it's one that we can certainly take a look at...[also discusses turnaround south of the parcel]
...With a pedestrian overpass from Cesar Chavez across to there, with a bike trail that would connect along the bike trail system along the L.A. river, certainly that would be one way to access that parcel for passive recreation. There is also sufficient parking at Chavez Park and it's just a short walk across to where an overpass could be constructed.
With regard to the city's commitment to that structure, we have always contemplated that that parcel of land, that is now basically bound by what we call city streets, that we would have to deal with that, as I've suggested, either with a turnaround, or the use of a pedestrian bike trail bridge, which we would fund, not at the state's obligation but certainly as the city's obligation as part of our capital program, we commit to you that that is in fact part of our work plan and that we would commit to do that in a reasonable time period...
Commissioner Connell questions City Manager
...Commissioner Connell: Why would anyone want to sit there and have a picnic? What is the view from that location?
City Manager Taboada: Commissioner, again I state that while it may look like a freeway...there was a real consideration right here as to how people would access onto the two sides of the park that are now divided by a street that becomes an onramp up here to the 710 freeway. We constructed a signal [at 3d St.], and we now have a signalized intersection that connects this part of the park [south] with this part of the park [north]. So it is something that is not the most ideal situation but it's one that works well. Both sides of the park are equally used and people travel back and forth safely from one end to the other. We envision that this would be the third part of the park that would be similarly configured, either through a signalized intersection, through an overpass, even a tunnel perhaps, that's another aspect that we haven't considered, or as I pointed out before, a turnaround like we have here could be constructed up here as well.
Commissioner Connell: ...It seems to me that we ought to hear some sense of timing of the city's willingness to put forth whatever you're going to do to grant access to the site. Whether it's a tunnel, as you just expressed, whether it's a bridge, whether it's signalizing your local streets. I'm really not in a position to define what you may choose to do; that's your local option. My question is, are there resources, are they identified clearly in your budget? If we were to go back to Long Beach and hold a Commission meeting, would we find that residents of Long Beach feel that there has been adequate consideration of eventually being able to transform this property which will now be available to you for greater public use? That's my question.
City Manager Taboada: I cannot commit to you that there is a capital project for this specific purpose, but as part of our planning for the overall development of the entire area, we don't have specific capital projects to develop much of it. We don't have specific funding to acquire some of the property that we're looking to acquire up in this area and along here, but certainly that is part of our work plan and something that we're committed to as a city.
If you need that kind of guarantee, I can't give you that because I'm not empowered by my City Council to do that. But certainly they have seriously looked at in the development of Cesar Chavez Park that eventually it would be a much larger facility than is currently there now. And it would make no sense to leave this property isolated and not part of the total complex.
...This may be a good swap for the State Lands, maybe, maybe not, and it obviously is a good swap for the developer and the folks that we've elected as city officials, but for the public at large, this is not what we wanted. This is not a good deal...The Mayor spoke about the [Queensway Bay] Citizens Advisory Board. Lester Denevan [now a Queensway Bay critic] was on that advisory board...
Don May, California Earth Corps
...We get these parcels that are swapped around...and the public never gets the use. We have that situation here again.
What you have before you is not only outside the criteria in the statutes and case law, it's a spectacularly bad deal for both the state and for the citizens of Long Beach...We did point out back in 1992 and 93, when this was first considered, that there was a problem with the uses intended, that they were outside public trust doctrine.
...Disney Sea was going to do a similar kind of thing and ran into the similar kind of problems and Disney Sea did not go forward. And was pointed out back then that they were goin' down that same road. So this is not new. This has been known to the city, discussed by the city, for a long time...
It's really a travesty to try and excise out the footprints of the offending uses from sovereign land while developing the surrounding tidelands into legitimate public trust uses. It's insulting to all of us to declare inland public park already protected, already funded for restoration with state funds, as tideland uses and insist that some kind of public benefit has occurred.
It's impermissible to extend tideland status to land dedicated to non-public trust use. And here let me point out, that the intended use for that as an adjunct, in fact it's already been counted as the acreage in Cesar Chavez Park, is for schoolyard, soccer, active sports things, not public trust uses. You can't do a swap to land that's already planned for non-public trust uses. You're precluding the very benefit that the state's supposed to gain...
I would also point out that fundamentally, land swaps require legislative approval. That is the reason that you have Public Resources Code 6307. It points out only in rare cases may public trust be terminated and only where it's consistent with the purposes and needs of the original 1911 trust...
...The precedent, next door, with the old Pike property...that in fact was a small parcel where you in fact had a boundary problem that was resolved by that swap. That swap, $605,000 for .18 acres, set the price of this land. Do that math. $3.3 million back in 1992. That means you understated the value of the Queensway Bay project by a factor of ten at the same time you overestimated the value of the other lands.
...Long Beach indeed, more than any other California city, has lost tidelands. We've lost 99% of our tidelands. We originally had over 5,000 acres of trust land, submerged land, saltwater tidelands, in Long Beach. We have 65 acres left...
...The project...is subject to CEQA...It requires an Environmental Impact Report...You have the letter from our attorney regarding that, I won't go into that...I would strongly urge that you require that an EIR be performed now to come into conformance with CEQA. That will provide the information you need to make a good decision.
Response to Don May's testimony
...Commissioner Bustamante: ...Is there a concern that we could withstand any kind of a lawsuit on our decision here?
Lands Commission Exec. Dir Paul Thayer: We've heard for the last month that, well longer than that I think, that some of the opponents of the project are threatening litigation should the Commission approve this exchange. And so we've brought in the Attorney General's office to consult with them whether this project met the exchange requirements...and it's our belief that what we're recommending to the Commission could withstand that challenge.
...Representative of CA Att'y General office: We would agree. We believe that it is within the statutory provisions authorizing an exchange. And as to the CEQA matter, we think it comes with purview of section 21080.11 of the Public Resources Code which grants an exemption for these exchanges in matters that. and it's been the consistent practice of the Commission for any type of exchange like this to use that exemption and that has not been challenged in the past.
...I like to think of myself probably as as much of an environmentalist as I'm sure everyone in this room does, but it's not my area of expertise and I really appreciate all the education in public trust law you've provided.
I work more in the area of protecting urban neighborhoods, and in that realm, I think many of us familiar with redevelopment and its forerunner, urban renewal, have a noticed a disturbing trend where it seems like if you manage something badly enough and blight it enough, then you undervalue the land and it becomes really profitable to redevelopment according to a new plan.
So I'm very disturbed reading the background section of the staff report which describes, and please understand I'm not speaking about any current administration, but describes about three quarters of a century of how the city of Long Beach, under the supervision of the State Lands Commission, everyone's predecessors, has pretty much squandered tidelands reserves, destroyed its entertainment resources, destroyed its historic resources in the tidelands, separated its downtown from its waterfront, removed the beach portion of the tidelands that it had, failed to reconnect the downtown back to the waterfront according to plan, spend the land and water conservation, our local park monies on the parks that were asked for, or implement significant portions of its LCP.
This is the rationale for why we're doing this deal.
And in order to approve this, you are going to have to make a finding that the lands entrusted to the people of the state no longer serve the purpose for which they were entrusted. How did this come to be?
Speaking as someone unfamiliar with the law, making that finding in a civil court would be grounds for damages. Make such a finding in a criminal court would be grounds for sentencing. Here it's grounds for making a deal that could be the beginning of what some people have told you they think will set a precedent across the state. Frankly, I think it will set a precedent for the rest of the tidelands in Long Beach.
So I'm very concerned about a condition of escrow that would undo this escrow if the current developer with the current plan does not go forward and complete all of it. Because our City Manager told us last Thursday night [Sept. 13] an option would be to sell the land and it would be infinitely more profitable without restrictions.
Now since, as Mr. May pointed out, it's really difficult to separate the footprint of one property and its usefulness from the immediately adjacent land footprint, this would be a chain of events that would alienate all of the tidelands from public ownership.
In that regard, I understand a lot of work has gone into doing this and I'm a realist. I suspect it's going to happen today so I would like to suggest some things that would, I think, make it more palatable to the public.
What we learned in [State Lands Comm'n agenda] item 88 [dealing with general public trust principles], about the interests which public lands can be put to, as my letter requests, my city plans to offer a $43 million bond offering to construct public improvements that would be largely parking facilities, roads and walkways, of which at least a third on a square footage basis of the lands you're trading out will be dedicated now not to bringing the public to enjoy public trust uses but to bringing the public to enjoy and use the movie theater, big box retail and so forth that you are proposing to swap out.
Therefore, I mean this is not a small or a temporary or an incidental part of the parking spaces and the public improvements, so I think they're going to have to be commensurately reduced because they know it would no longer be serving public trust uses.
So that is a condition that, I think the staff report we heard on item 88, would make necessary. Otherwise, it's just a financial inducement which exhibit B for that report I think would have argued against.
In addition, I also contest the appraisal...When Mr. Ryan was referring to an earlier appraisal the city had had only in connection with that POS for that bond offering, please understand that we have received no written information or even agendized items from our city of any local discussion of this item until a meeting last week which had three pages of background, and all the information we've seen has come from your staff in response to a Public Records Act request and we received it last Thursday...
But looking through the appraisal information, I have to note again, as a layperson, setting aside altogether what the city's appraiser did, I was very shocked to hear Mr. Porter [SLC staff appraiser] refer today to the process of finding comparables. The whole reason these are sovereign lands is that they're incomparable. You see there are literally no comparables because public lands don't get sold.
So the value that you find for these lands right now is not the value that these lands will be when my city contemplates selling or doing something else with them. They would then be the only land that would meet such a comparable standard.
...That [swap] which was done a decade ago averages out to $77 a square foot for what you are in this parcel saying is I believe $22. Now looking at similar transactions that have been made across the state, it appears to a layperson that there is no connection to any of these numbers. They're all over the map.
Why? Well, they're all politically motivated and publicly subsidized in I think every instance you make such a transaction. There is no correlation to the private market.
As Mr. May pointed out, the L.A. river parcels have already been funded. The funding has been obtained because they also, under your stewardship, been so degraded by the Port use that was is of interest to our city has always been the grant applications for their remediation and clean up and, since the neighborhood lacks any recreation, grants it has obtained for park use.
There is no assurance that the city will perform on creating that park for you any more than it has in its own LCP, so I'd like some kind of performance guarantee or performance bond as a condition of escrow so that the state knows this land will be a park when you get it. So far, it is not.
Finally, and I mentioned this earlier, I just really want to be sure that this transfer, if it is made, the escrow will dissolve if the developer is not going to develop all of this--that this will not just alienate ownership in a manner that we can keep replicating all over. All of those things I think would make the escrow more advantageous for the State as well as for the people of Long Beach. Thank you.
Commissioner Connell [responding to Ms. Myown's statement]: ...If we take action today, and there for some reason is not movement forward, financing doesn't occur or whatever, I mean we certainly do not want to be in a situation where we have created a profitable advantage and we are seeing a flipping of land here...
Lands Commission Exec. Dir. Paul Thayer: ...If you leave this project out of it entirely, we believe that this plan, having done all this work and done the research on the valuation and the utility of the parcels that will be taken out of the trust and the utility of the parcels that will be put into the trust, this is a good deal for the state. And so there is an argument that could be made, and it would be up to the Commission to decide this, that this would be appropriate to go forward whether or not this development occurred or not, because at the end of the day, the L.A. river parcels are of greater value to the trust, both from trust purposes and monetary parcels, than the parcels that'd be given up, whether or not
they're developed in the way that they're presently contemplated. But this is a question that the Commission...
Commissioner Connell (interrupting): Well, it may be a better monetary value for the state, but let me just as one Commissioner say emphatically: I would not consider taking action today with the expectation that this property becomes a poker chip in a land swap deal. I think that's abhorrent. It would be abhorrent in Long Beach. It would be abhorrent in Santa Barbara. It was abhorrent in downtown Los Angeles, and in a rare moment of unanimity, every candidate in the [LA] Mayor's race, stood up and came out against the project in downtown Los Angeles...I do not want to be in that situation here...
I mean the only reason I would entertain going forward with this project is that it would enhance the purposes of urban renewal in Long Beach. I certainly would not want it to be an ongoing game play where we have created artificial value that has been swapped for more artificial value to another developer downstream...So if this project does not go forward in the manner in which it is conceived, then I think we ought to immediately be able to eliminate our support for the land trust transfer.
And I think that's what the woman was raising...
City Manager Taboada: ...The way that we envision is, and we have every expectation that this project will go forward with this developer, but we do have a termination clause in our development and disposition agreement that gives the city the right to take over the entitlements to this project. One way in which it could be effected very easily would be for the city to step into the developer's shoes and simply hire a contractor developer to build the project on our behalf. That is one way in which you can accomplish the same objective. ...[L]ike I said, it's a very unlikely scenario, but certainly we have contemplated that we have rights in this project based on all of the investment of both the developer and the city, and that we would have an opportunity at the end of that period, should the developer not go forward, to be able to salvage this project in that way.
Commissioner Connell: That doesn't answer my question...[puts question to SLC staff, is dissatisfied with answer]...I do not want this to be in play. I do not want this to go on beyond what we have now spent an extended amount of time understanding. My fear is that it may change in its substance.
And I certainly do not in any way cast aspersions on the current leadership of the City of Long Beach, but we do not know what we are going to have in the future...
Bry Myown (is allowed to return to microphone): May I ask a question? Madam Controller, one of our concerns is given the changes and the length that this project has taken,...and changes in the economy, it's very easy for us to imagine going forward in a phased or partial way. And so I'm not sure how a protection tied to a time certain would address that. What if we were to learn right before the contract period expires that they're now breaking it into phases and building one use of it, but they've lost another tenant, etc., then where would we be?
Commissioner Connell: Well, I'm not familiar with the phases of the project, although I have visited the project site and I've been fortunate to get briefed by the developer on this project...
Bry Myown: My question would be, what if they broke it down into phases because of changes in the leasing, the economy or, in other words, it's been supposed to start for a long time as one phase, and it hasn't. So what would happen if during the contract period they elected to start a portion of it, and where would we then be?...
Commissioner Connell: ...I have heard from the city, in all of my conversations with them, that they are resolute about moving this forward quickly...Given the city's leadership's commitment to this, and the developer's evidently their commitment and financial resources, one has to assume this is going to move forward. If it doesn't however, in that small percentage of unlikelihood that it would not, I want us to be absolutely protected as a Commission that has granted this opportunity to a city.
Traci Wilson-Kleekamp: Thank you for addressing the issue of what would happen if the property or the deal fell out. We were concerned when the City Manager said that he could sell the property.
One of the things I would also like to thank you for is answering my Public Records request, I got it last Thursday. This is my first opportunity to kind of really look at what's been happening. We haven't had a public dialogue about the land swap until about a week ago...
...I think the process is really bent towards the developer, and not the interests of the public, which is why I brought up the issue before about recreation...
I'm going to switch over and wear my Mom hat about the situation with Cesar Chavez Park and I have some pictures for you. I refer to that freeway strip median as "Asthma Park." And I call it "Asthma Park" because on either side of that freeway median is Port traffic, which means that the poor children in that area are subjected to rubber particles and diesel fumes etc. from the Port traffic...
My concern in the way that they're running this swap is that eventually, that's all going to become a freeway. And I think that that's a problem. I think if the city is making a commitment to us about park land, they need to keep with it.
Now Mr. Taboada was saying they didn't have anything in their capital improvement budget about parks. I wanted to say they created their Cesar Chavez Park Master Plan in 1996...and so far construction has happened in three [of five] areas, but the Master Plan has not been completed for any of them. It says the reason why they haven't proceeded with this area 5 that you are thinking that people can have a bridge to or a road access way to is because they didn't have the money to move the roadway and they didn't know when they would be moving it. But it's been promised for that particular area that they would get much needed recreation space, cause there are not football fields, baseball fields, etc., those types of active recreational uses in that area...
Commissioner Connell: Well evidently there can't be on our land anyway...
Ms. Wilson-Kleekamp: This is totally unrealistic thinking that you can drive or walk to that median. You are basically telling children to go play in the freeway. We have Cesar Chavez Park, which now they're going to take 2.5 acres of, fence it all off, and deny the public access there in an area that's very densely populated with children who are poor, they lack schools, and I think this is an egregious offense to children and the community and what they've been promised in terms of park land. That property already belongs to the city and I don't see why we are going through this process for land that's already been promised to our public. I don't see any state benefit for taking it away from us...
...I don't think that this swap is necessary. At our last Council meeting, our City Attorney said that this swap was not [legally] necessary, it was only operationally necessary, which makes me think it means it has to happen just for the developer...
Jim McCabe (Deputy City Att'y)
...I very much urge the Commission to be aware as a whole that this has been a very long process, that the Queensway Bay commercial development, of which we're speaking today, has had more than 25 City Council appearances over a period of years. That the City Council has always acted in a lopsided fashion to approve this project. That the City Council acted in special session this last Thursday...and voted 8-1 to go ahead with this land swap.
...The city has an absolute commitment in terms of its energy, subject to future funding and necessary Council action, to go ahead with park development...
I just want to emphasize again that the democratic process in Long Beach has taken its course. Both Councilmen for the districts involved have voted consistently in favor of this project, and both Councilpeople involved in the potential exchange favor that on behalf of their constituents.
Commissioner Kathleen Connell (makes motion)
...I would entertain moving forward on this project but only with two very significant changes to the staff report. And those two changes are that the time factor of May, 2002 becomes a drop dead date for movement forward on this project. And that if this project does not have the signed leases and is not moving forward as stipulated, that our approval of the swap expires. And that there is no option for the city to develop this project on its own and that that development occur without any phasing.
So those would be my three restrictions, that there be a time factor of 2002 that is adhered to, and that second, that project move forward with the lease understanding without phasing, and third, that when the 2002 period expires, May 2002, that our swap is basically voided at that point and that the property comes back to the state.
I could see scenarios developing on the economic front, having spent two and half hours in those meetings this morning, where the state has more resources than local government. And that the state might actually have greater flexibility in going back and doing something with that property in Queensway Bay, where the city could not. And I would not want to be hampered by our ability to do that in the future. So I would make my approval at least conditional on those three factors...
Commission chair Cruz Bustamante: What if the city came to us prior to the end of May and indicated they wanted to complete the same activity as the developer but they came back to the Commission prior to the end of May?
Commissioner Connell: I think they should go through our approval process again. In other words, our approval today is for this arrangement...If the team taking the field is going to differ, then I think we should have a second look at that. Given the dynamics of the kind of markets that we are now in, I have every belief that we are going to be in a stronger economic position than many local governments in the state, and I do not want to in any way restrict the ability of the state to move forward on a project down there.
SLC Exec. Dir. Paul Thayer: Just as a point of clarification, would the Controller's motion also contemplate then some sort of provision to ensure that even with this developer that the uses presently planned for these sites that we're trading out of the trust would go forward?
Commissioner Connell: Well that's my anticipation. We are certainly not approving this to become a 24 hour nightclub district. I mean we've had extended discussions about the precedent setting...nature of what we're doing here, and I certainly do not want to have a situation facing us in the Port of LA, or Santa Barbara or Ventura County, where they're just eager to use their lease authority to do something which is not as perhaps pleasant as we would want.
And I want to send a very strong message to local government that there are very restricted uses when we do have a swap. And so I would assume that exactly the uses that have been contemplated, that have been presented to this Commission, the exact potential conceptual drawings be used, and that we not have any amendment of uses as we move forward. That we do not have a retail space substituted for entertainment space or, you know, some other use that we cannot at this point contemplate. We are approving a particular plan.
I'll restate that [the motion] again for the record if you want me to. There were four factors then, we had three and we've added a fourth...The time factor is the end of May, May 31st of 2002, for having these necessary local agreements in place. Secondarily, the developer must be moving forward without phasing on the development of this project. Third, that that development activity must reflect the existing plan as presented before this Commission and in the attachments that we have. And fourth, that should that deadline not be met, that our approval of the land swap would expire and we would be able to have our property back as a state...that in other words it reverts back. I don't want us to be in limbo...and that it has expired but we don't know who owns the property. I want it to be clear that it comes back [to the state].
...Commission chair Bustamante: Let the record show that the motion passed unanimously.