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Salient Transcript Excerpts of Historic City Council QW Bay Vote (to proceed with project by amending development agreement to grant developer 15 month extension)

We have posted below transcript excerpts of the City Council's historic February 13, 2001 meeting at which Councilmembers voted 6-1 (Granbinski dissenting) to authorize the City Manager to amend the Queensway Bay Disposition and Development Agreement (DDA), Ground Lease, and other documents with DDR Urban LP.

The Council vote effectively approved proceeding with the project by giving the developer a 15-month extension of the deadline for meeting all predisposition requirements, in return for which City Hall will accept certain additional commitments from the developer.

City Manager Henry Taboada listed details of the amended arrangement in a written memo to the Mayor and Councilmembers, which we have posted at City Manager's Feb. 13, 2001 QWB DDR memo.

The transcript below is excerpted; not all speakers or statements are included.

Jay Day

Good evening, Council. My name is Jay Day. I wear two hats. I'm a consultant on staff to [State] Senator John Burton, his Los Angeles office, President Pro Tem, California State Senate. I'm also a resident of Long Beach. I'm very honored to have Vice Mayor Dan Baker as my Councilman.

Whatever happens with the Queensway Bay project and DDR tonight will happen. However, as it stands now, the proposed Queensway project is an embarrassment.

A few restaurants, a few shops, chained down by a movie theater complex. I think that's already been done. Actually, four times over here in Long Beach: on Pine, twice, 2d and PCH and Towne Center...

CityWalk and Block at Orange type projects are not going to bring visitors from outside the immediate area, simply because residents from the San Fernando Valley and Orange County who you want to bring in here to see our great city already have a CityWalk and a Block in Orange.

I beg you not to settle for such a mundane project, and I ask you to exhibit courage and show true vision. Do not settle for the mundane. Create a project with true allure. Thank you.

Mike Murray, Chair, LB Area Chamber of Commerce

...I am here restate the Chamber's support for the Queensway Bay project as prsented by DDR. Queensway Bay will be a tremendous boon for the City of Long Beach and its business community. Beyond the boon, the development is critical for the continued growth of business in Long Beach.

It's the Chamber's view that Queensway Bay will be an important part of the transition of our downtown from a neglected, aging area into a visitor destination and urban experience and community. Additionally, and arguably most important for the business community, Queensway Bay will play a key role in the city's strategy of promoting convention and tourist business.

Rainbow Habor, the Queen Mary, the Convention Center, Shoreline Park, Long Beach Aquarium of the Pacific and the 18 acres of dining and entertainment development will attract visitors to the shoreline where they will enjoy a unique, new Long Beach experience. And Long Beach will enjoy an invigorated economy from the tourists discovering the new Long Beach.

It took Portland and San Francisco five to ten years to accomplish comparable projects. Long Beach has persisted in this effort. It's now time to perform.

We encourage the City Council to approve the 15 month extension. We applaud the safeguards that have been negotiated by the City and DDR. It's our impression that DDR is committed to completing this project.

The financial commitment, willingness to open the process to bidders and deliver their due diligence after the 15 month period indicates an understanding of the urgency to deliver this project now.

We're encouraged that Long Beach Transit is taking the linkage aspect of the Queensway Bay and Pine Avenue seriously in setting up shuttles. The Chamber believes linkage will be a key component to the success of the downtown grid.

Business, residential, entertainment, dining, shopping, recreation can all come together as the components that will comprise downtown Long Beach. But accessibility is going to be critical to keep all the downtown elements viable.

The Chamber encourages the Council to approve this project extension and to maintain momentum on a development that will play a major role in the continued growth of the economic prosperity of Long Beach. Thank you.

John Morris, Owner, Mums Restaurant

...I believe tonight I speak for the majority of the retailers...above Ocean Ave. I remember when the Queensway Bay first came out, and we had a project on The Promenade that got aced out because those tenants that we had for The Promenade were moving down to the Queensway Bay.

Then we had Mr. Hopkins that became involved with the Mall...

But I remember everything that was going on was, we're having problems with retail. We can't get retail because the Queensway Bay is getting the retail. We're trying to get the same tenants. Everybody's fighting for the same tenants in retail. There's not a lot of retail out there.

So now we're back again...This is not about DDR. I think DDR picked up the baggage from Dene Oliver...And I believe they [DDR] mean well. They have an investment down at the Queensway Bay.

I understand the total ramifications of what's goin' on with the Aquarium. I think everybody does. I think everybody is in support of the Aquarium, but not at the expense of the overall downtown.

I think that if we invested in the waterfront property, and made Shoreline Village all one and tied into the Aquarium, give DDR some kind of exclusive arrangement that you can't touch the tidelands site for five years, finish the Plaza.

...[A]ll of you, we're all committed to doing the right thing and doing what's best for this city, but I think what you're creating is a monster. You're gonna have Queensway Bay coming back on line, Cost Plus Queensway Bay, Barnes and Noble, Queensway Bay. They make sense to me to be up in the Plaza. That's what that should be, a retail center should be at the Plaza.

We don't need a retail center on the waterfront, a retail center a quarter of a mile up the road. Let's put something on that tidelands site that is gonna mean something, there's gotta be some better ideas out there than movie theaters, there has to be.

And what are the consequences when we build a new movie theater if the, which I'm sure they're going to do at the tidelands site, what happens to AMC on Pine Ave.? What happens to upper Pine Ave.? Why don't we solidify the base that's been started for 13 years?...

And it just seems like there's no master plan. Everything is a hodgepodge, go over here, go over there. Can we just once finish? Thank you.

Diana Mann

...Where do we get the answers to questions the public has asked? Where is the public input? I believe we were promised a community outreach. What happened? Do we get a community outreach? Is this the community outreach?

Mayor O'Neill: If you'd like to restate your questions, we'll make sure you have answers.

Ms. Mann: OK, well I have a whole bunch of questions OK, and you only give me three minutes.

Mayor O'Neill: That's right, you can get them in writing...

Ms. Mann: You're gonna vote on this tonight, right?

Mayor O'Neill: Yes.

Ms. Mann: OK, well, by the time you answer my questions (laughs), it's gonna be a little late, don't you think?

Mayor O'Neill: Yes, probably.

Ms. Mann: And it looks to me like, if you're gonna sign this deal, you guys are gonna like put this thing together, there's a whole lot of face cards that are facing down that the public doesn't have an opportunity to see.

Because from our perspective, and I speak for many, it looks like this decision's being made by somebody who doesn't the brains God gave a duck.

It's almost laughable, we keep going here over and over and over and over again. Now, are you not listening to the public? Who's runnin' the show here? Are you guys representatives of the public? Are you representative of yourselves and something else that we're not privy to?

And all of the backroom deals here; what's happened? Why aren't we included? Why is it that we don't know? Why is it we have to ask all these questions and we stand here over and over and over again and give input on project after project and continually get ignored? You gonna answer that question?

Mayor O'Neill: I don't think there is an answer.

Ms. Mann: (laughs) Yeah, that's right, OK, and that's why we need a new Mayor and we need some new City Councilmembers because you guys aren't doing the job.

Gary Shelton

...One thing I'm encouraged by is that the cat is out of the bag as far as litigation is concerned. You've had two or three sessions behind closed doors, protected by the Brown Act...the fact that we may be drawing a line in the sand today as far as litigation by DDR against the City, whatever it is conceived that they might litigate against us for, what's to prevent a similar litigation happening in 15 months' time, when we're faced with exactly the same situation we're faced with now, which is a condition 25 resolution that stinks...

And I believe the [State] Lands Commission. as a result of a July 20 [2000] hearing that was held here in Long Beach last year,...we might not know for a couple of more months because of the timing of Lands Commission's report on that exactly where that will go, but I can't help but think there's a condition 25, which simply states the tidelands development cannot proceed unless a whole bunch of sited conditions are satisfied before the project can continue.

I think that's a real project killer right now. And that may be the core of the problem with why we're afraid afraid we're going to be litigated again, because we've begun on this thing with DDR and all of a sudden found out that we can't complete it, because the tidelands grant is going to prevent us from doing the project as we've stated it...

Anyway, I'd like to hear some lively discussion on that point, does this 15 month extension benefit us in any way from future litigation...

Colette Marie McLaughlin

...They always say that to marry in haste and you repent in leisure. This case has been multiple marriages that we've been repenting as a whole city in public ridicule for quick decisions that failed.

...I think at this point, it would be a good time to stop making quick decisions that are prolonging a final decision that should be that we stop this project, and we regroup and we get something that serves the public without having to have this developer that has failed over and over and over again to fail one more time and embarrass us.

I know all of you are greatly concerned about the Aquarium...the city is the backer of those bonds, that we are going to be stuck with if they don't pull out of the hole, and those are hundreds of millions of dollars that the public is going to be responsible for. And that was another great decision.

...Instead of saying yes on this, that we stop the program right here, get another developer, get something that uses the park, uses the assets that we have and does it in a way that doesn't have to be stopped and started and we just do it, and we do it correctly the last time.

The Mayor then closed the public input and brought the matter back to the Council. She first recognized Vice Mayor Dan Baker, in whose district the project is.

Vice Mayor Dan Baker

We've heard quite a bit of confusion and frustration with this project, and quite honestly, I've shared much of that frustration and confusion over the last couple of years that I've been sitting here.

We as a Council have been extremely concerned about the delays with the project, I think that's been very well documented, and just about a month and a half ago we took action to move on this project one way or the other. We gave the developer notice that we were unahppy with the delays, unhappy with the way things had been going, and they responded with the offer that's before us this evening.

The deal was almost dead, very clearly we could have been sitting here tonight terminating the development agreement. What we have in front of us is a deal that, from the developer's perspective gives them a little bit more deal to pull the deal together, to offer the city assurances that they are committed to the project.

And I believe, I really do believe, that they are committed to the project. They have a large investment up the street on Pine Ave. They are prepared to leave a half a million dollars on the table if they don't perform in the next 12 months.

I do have a question...for our City Attorney addressing Mr. Shelton's concern. Are you certain, or fairly certain, that we are legally protected from any further action by the non-litigation clause?

City Attorney Bob Shannon: Well, in terms of guaranteeing that there will never be any litigation against the city, no I can't guarantee that. What I'll tell you is that we are satisfied there would be no successful litigation against the city.

Vice Mayor Baker: Very good, I'll bank on that one, thank you. There was some discussion late last fall about sending this to a committee of downtown residents and business owners, many of whom have been represented here this evening. I'm still very much in favor of that. I think if we are to go forward with approval of what's on the agenda tonight, I still think it would be very important that some way we ensure that comments and criticisms are taken into account.

There are still many steps along the way for design approval in the project. The tenants are not locked in. I think there's still an opportunity where the developers can sit down with our residents and business owners and come up with a mix of people and ideas that will make this something that most of the people here in our city are very proud of.

...I hope that at some point Mr. Taboada will share with us again and the public his sense of the vision, I think we might have lost sight that this is, Queensway Bay is not this project. Queensway Bay is the many exciting things we have down on our shoreline, the man-made shoreline in that area...

I am comfortable that we have the assurance the developer will move forward with this. I am very comfortable that he will work with our residents and business owners to ensure that the comments, the vision, of residents of our community are included, incorporated into the project, and I'd be happy after my colleagues get a chance to comment on this to make a series of motions to incorporate all of the comments. Thank you.

Councilman Ray Grabinski

I suppose I'm going to continue to be the lump in the otherwise smoothe carpet. I supported this project with and without DDR...but there have been things that have happened over the last couple of years that have changed dramatically and if this City Council doesn't face them, then essentially what we're going to do is make the worst kind of a decision. We're going to take what was a dream five or six years ago and turn it into the nightmare of the future for everyone else.

...I think that the real tragedy here is, is that we feel as if this is the only thing we can do. I think the people on this City Council have gone out of their way to work with Dene Oliver, gone out of their way to work with DDR, and I think DDR wants to make this project work, but that was not what was originally promised to the people in this community. What was promised was something that would knock people's socks off, not a shopping center...

...The logic, the sequence in all of this, is kind of like watching a train wreck happenin' real slow. A lot of people know that these facts are true, and you can make them work for you. I can say that, you know, look at the downtown in Long Beach, look at the shoreline in Long Beach and talk about the great things that are down there. That is not going to, in and of itself, draw people to something that, as the gentleman from Senator Burton's office pointed out, has been done before.

And the difficulty is it's been done before you get to downtown Long Beach. In the last five years, the market that was there when they first started planning all of this has been chopped up by a successful Marina Pacifica, a successful 605 freeway, and some other things that have happened...I went to the theaters in Lakewood once about a year ago, right after the 605 center opened, and they were just about dried up and blown away. And I guarantee you, if they open any kind of heater in this project, the AMC Theaters that we were going to support and make real wonderful on Pine Avenue will have the same thing happen

And some people will say let the market play itself out. You can say that when you're not using public dollars. You can't say it when you're financing a lot of these projects with public funds, because we're the ones who get stuck in the market. We're the ones who will be here as long as that project is. I want to remind everybody that we're just knocking down the 20 year old shopping center...

And I guess what I just want to say for the public and my colleagues, this is something that we will be making a decision for, for other people coming behind us. And it might have been a prudent decision four or five years ago to move forward with some of this, but right now, you don't have the 25 to 30 people lined up who were here before...

We didn't listen in El Dorado Park, it cost us $200,000 and four or five years. The Harbor didn't listen at the Naval Station. The Harbor Commission paid $4 million to the Historic Society to get out of its situation that they didn't pay attention to the public on. And I'm not gonna go through all of 'em, but when you find yourself kind of bumping up against the people you are supposed to represent, it ought to at least give us pause, and I know there's gonna be some changes and some recommendations.

But I just want to throw caution to the wind and say this is the kind of an issue that people get elected for. Not the proclaiming something, not going out and cutting a ribbon someplace, this is the kind of decision once or twice a year that they really pay us for, the big bucks, you know, the $29,000 a year whatever it is, and I want everybody to think about the decision that we're makin'.

Because if in 12 months they come back and they say, you know, the finances just aren't there, the economy is kind of floppin' a little bit, I have to tell you that we will be saying the same thing we've said for the past six years "We've got to go along."...I can't support it, mainly because it's not what was intended originally and because the financial things that have changed have put DDR and the City in an uphill, I mean this isn't even a level playing field anymore because the economy is not what it was five and a half years ago. I hope that I'm the one that's wrong. I hope that I'm the one that's wrong.

Councilman Dennis Carroll & Colloquy with DDR's Eric Mallory

Before I make my comments, I would like to hear from (DDR's) Mr. Mallory as to how he views us coming to the impasse that we are in and his argument why the City Council should go forward and approve this project.

Mayor O' Neill: I just do want you know, Mr. Mallory, I was going to call on you but I was going to call on you after all the discussion, but if there are questions, I'm glad you're here for that.

Mr. Mallory: Restate the question, please.

Councilman Carroll: Well, you've gotten an earful of some of the concerns that have been expressed, there are others advanced by the Council. I'm wondering how you perceive whether, fairly or unfairly, we are where we are tonight, your company's responsibility for creating this circumstance, if you feel you were responsible, and where you think we should go from here and why should think we go there, why we should have confidence in your company, and what from your perspective are the compelling arguments that should cause us to support your project.

Mr. Mallory: That's a good way to start. You really have to understand the past to understand where we're going.

DDR got involved with this project intially in a joint venture with Oliver McMillian. The company was called DDR-OliverMcMillan, and that company was established to do entertainment centers just like this project.

This is the crown jewel development (inaudible, slurred) company. DDR was a financial partner at that point, although we were involved and we gave guidance and whatever was required on the project. As we proceeded through the project, one of the toughest things that kept holding us back was leasing. The leases just didn't come, didn't come, and there was a lot of reasons for it, but it really wouldn't matter a whole lot.

The project finally got to the goal line early last year. Edwards Theaters was on board. The leasing was up to about 60% of the total project. We were just about ready to start construction and Edwards went bankrupt.

It was tough. We took it. We moved on. We rejected the Edwards lease. We moved ahead with Resorts Theaters of America, had that lease signed, were right to the goal line again, and they went bankrupt.

Although it sounds like a pattern that we found ourselves in, it really had nothing to do with the project, or how well a theater will do in this project. As a matter of fact, the way we've looked at this project, and I've stated this before, before Council, is that we've looked at, what are the economics of a state of the art, modern theater at this site and we were absolutely confident that a state of the art theater at this site will do very well. It will be able compete very well and it will be a successful financial venture, and so...

Councilman Carroll (interrupting): You've heard Councilman Grabinski and others raise the question, theaters in an environment where theaters are going bankrupt. What would be different, if anything, about the proposed theater you have?

Mr. Mallory: Well you have to understand why the theaters are going bankrupt and why the theaters are in the situation they are right now. Theaters, about four years ago, started to do megaplexes. Megaplexes with stadium seating, more than 12 screens, state of the art, everything state of the art, and there's coffee bars, there's a lot of amenities for the customer. And when the started to roll out these Megaplexes, they realized that this mousetrap was newer, bigger, stronger and it was really going to dominate the market...And as they rolled 'em out they put a lot of other smaller, slope floored theaters out of business.

Well all the theaters started to do this because they realized it was the way to compete. And as they did it, everytime they opened a Megaplex they put two or three other slope floored theaters out of business...And they kind of got carried away with it and they put their competitors out of business and lots of times they put their own theaters out of business.

So it really was a situation occurred in that industry that they created their own problem. But there isn't anything fundamentally wrong with the theater business. People are still goin' to see movies. The Oscars were announced yesterday and this morning. People are still very interested in movies. Some of the biggest blockbusters that occurred over the holiday season this year were as good as, had the same attendance as other great shows that have come out. So there's nothing fundamentally wrong with the business. The theater companies overextended theirselves and they've got to now clean the slate.

That's what's gone on in the theater business, and when you have that as a belief and an understanding of the theater business and that it will come back and it'll come back after these companies emerge...So if you have the right theater, state of the art, in a good theater zone, you've got a financially viable product and that's what we have at Queensway Bay.

Councilman Carroll: And sir, what construction schedule would you be prepared to publicly commit to tonight?

Mr. Mallory: Let me step back and answer your very first question, I only got to the two theater bankruptcies. After the second one went bankrupt, Resorts Theaters of America, we stepped back and we looked at the project. We've had numerous design meetings, we've brought in, you know, everybody who says they're an expert, we'll let them talk to us. We figure that the more we learn, the better we are.

And we've looked at the project every which way we can, and the result of that look is that we like the way it's designed. We like the generators that are involved. We like the traffic that's generated from different generators. And we're very pleased with the fundamentals of the design and the layout. So once we made that decision, then we just had to resolve ourself that we're able to get over the theater situation.

And we're confident that we can manage the theater situation now and that's how we've made our proposal to the city and that's how we're now prepared to move ahead.

Now you're next question is, what is our schedule? Assuming that we have an extension of the DDA tonight from the Council, it is our plan to sign up the theate operator within the next 30 to 45 days, and after that, it's our hope that we'll actually start construction of this project very early in the summer, early in the summer, I'd like to say May, but it's probably going to be more like June, that's when we feel we can get everything lined up. The things that have to be completed, we have to complete our leasing.

Since the timeline of this project has been so long, we have to do lease amendments with each of the tenants which were previously signed up for the center. And in addition, we have to put our financing back in place. Our equity is in place. Equity is the toughest thing to come by, but that's in place and we're ready to go ahead with it.

We absolutely believe that this project will start in early Spring.

Councilman Carroll: And complete?

Mr. Mallory: Our targeted completion is 4th of July next year. That is a perfect time to open the center.

Councilman Carroll: Mr. Mallory, thank you. I'm sure some of the other Councilmembers may have questions for you, and if you'd be kind enough to hold yourself to...

Mayor O'Neill: Just stay close by...

Councilman Carroll: Madam Mayor, this issue is a complex, multi-layered one from my perspective that has many interests and many cross-currents that will never lend themselves to a complete resolution. And I think the threshold quetsion is what, if anything, should be built on this tidelands property.

I appreciated Ms. Porter's comments, she provided them to us in writing, and argued her case well, that nothing should go in there that has to do with basically a commercial themes, which this certainly does. It was characterized here as a tourist trap, and although that was used in a perjorative sense, I think that's exactly what it is hoped it would become, that is bring persons to the project.

It may be that this project will not get off the ground. The California State Lands Commission has been invited to render an opinion as to whether or not the proposal that we do have meets with current laws regarding the nature of the use here. And let me inquire of the City Attorney at this point, you had earlier offered us an opinion, Mr. Shannon, that it was your belief that because of the Coastal Commission permit, that you felt that the city would be in compliance with this proposed use. Has anything up until today changed your opinion, sir?

City Attorney Robert Shannon: No sir. We're satisfied that this development is a permissible use under the tidelands trust.

Councilman Carroll: Alright. I also, the next issue I guess would become, if there is going to be development on the land, and I respectfully appreciate Ms. Porter's point of view, which will be decided one way or another by authorities different from us, what type of development should there be.

And I have to say, and I have said this before, it's my view the city had this right in 1954 when we had Rainbow Pier and the Pike and uses which I'm sure some people argued at that time were commercial and inappropriate for a beach community, and wished that we would stay the same as Oceanside or Huntington Beach or a sleepier beach community, and there's certainly much to be said for that. It's a preference I would personally exercise.

However, we are past that bridge. Others, our forefathers made the judgement that they have made and we are presented with a different set of circumstances, and I don't think it's ever going to be rolled back to that more natural beach environment.

That being the case, from my perspective, what would be the best use for our citizens and for the city. To me, tourism is one dimension of it but it's cetainly not the whole of it. What I look our there and see, and my office looks out on that exact area, is an empty piece of dirt. We know it's landfill. I take Mr. Mallory at his word that they've done the studies that it would even support the buildings that he is proposing there.

But after looking at that for the while I've been on the Council, and hearing that should we shut down this project, which would be quite easy to do, it's easy to say no up here just so you know. It's harder to say yes and give reasons for the yes.

But if we shut that project down, and if we are moving into an economic environment that is going to be more challenging, not only in general but for the city, what reasonably could we expect. And what I personally would foresee is years and years of empty space out there. Now that may be better than a failed project, but I don't know that that is the case.

I would hope that we had as exciting a development there as we can have. I've certainly heard the comments that this is just more shopping centers and theaters and you can go anywhere to do those, and certainly can't argue with that.

I don't think we have to go very far to find out what the current state of the art with respect with respect to bringing people to a particular area. We have [Disney's] California Adventure opening last week, we have Point Anaheim, I believe it is, the city of Anaheim is putting up a very large development of the kind we're talking about here at Queensway Bay, right next to the California Adventure. And it's simply a matter of going over there and reading their materials and seeing what they have done.

Part of my reading on this yielded one fascinating piece of information, and I think Councilwoman Kell may have some comments about this, but Disney sent their people all over the world, to marketplaces to find out what has kept people coming back to certain parts of certain cities for 200 and 300 years, and they tried to reduce the principles that were involved there, and believe that they have done that, and used those to put up their market center at California Adventure.

It was fascinating to me to read it. One of them are a lot of flowers, bougainvilleas and plants and green, people naturally move towards that, flowing water, fountains. They've done it there It's an opportunity for us to go to school on the kind of project that people feel comfortable being in, like being in, and it's proven. We do not have to invent the wheel here.

And with an earlier conversation with Mr. Mallory, they have assured us that should the Council approve this project tonight, they are open to developing and improving what they have planned now. And that means making it better, consulting with the community on an ongoing basis. I know Ms. Mann expressed her frustration in getting not only information but getting heard and we hope, and Mr. Mallory I will ask you again if some the other Councilpersons doesn't [sic] to recommit to being open to that process, because it is our project as well as the developer's project.

What do we have a, something truly exciting to come down here? I remember when Disney ten years ago was proposing a variety of fantastic ideas, one of which was some kind of tram system that would run from Pine over what's now the Queensway Bay and the Aquarium to Queen Mary, something that you couldn't go anywhere else to participate in, and that's the kind of thing that I would like to see investigated. I know one of our Long Beach citizens had a proposal for a monorail. The gentleman who was assigned development responsibilities at California Adventure for Disney said his inspiration came from a sailplane ride over the Rockies one day. And they have put that as a ride there. He said it's the cheapest ride there is and for him the most exciting. I have not yet been on it but I intend to, and I would urge that we keep our minds open to that possibility of something along those lines, not financed by the public but financed by a private developer.

Mr. Morris made some particularly timely and accurate comments. I think we have a strong obligation to those on Pine Ave. who came first and many who have sacrificed themselves financially and are no longer with us. It's important to me that we include Pine Ave. and keep them not only involved by way of a transportation system but do what we can to support them there. It is the expressed intent, I know, of our City Manager, that he belives this will survive Pine Ave. and give you more financial and economic stability. I hope that he is right. None of us has a crystal ball here and this is a gamble, there's no question about it, but I for one want to support that.

And I think we owe a debt to Councilman Grabinski for bringing this entire issue to a head. He has argued persuasively to the Council that we were at the end of our rope, the citizens were not being given a fair shake, and really initiated the notice that was implemened about a month ago. I know he has continuing reservations about the project itself, but I think he is due the credit for framing the issue as it has been framed.

And in the end, not having a Bouchard Gardens or a Tivoli Gardens to vote for, not having a group that would be prepared to finance it and...though I can come up with many ideas myself, that doesn't they're going to be realized. I think that's a critical part of the mix too.

So for those reasons, and with certain reservations which I do have, but with the hope that with the citizens' continuing input, the strength of Mr. Mallory's corporation and the good faith that I perceive he is expressing tonight and the commitment he's prepared to make publicly, I am going to support the project. I have joined in an amendment that will be made shortly, that we the public, as well as the Council, receive a monthly written report on the progress that is being made, not only as to the improvements in the project, but we want to see it brought in now and kin, Grabinski's famous words, on time and under budget.

So for those reasons, I will be supportive of this project and will be voting yes.

Councilman Frank Colonna

...I was just writing some projects down that the pioneers that went through this process, and stayed on point, to get things done and to bring Long Beach to what it is today, we have the Towne Center in Councilwoman Kell's district, Los Altos, we have the CityPlace that's under construction now, we have the Wrigley Marketplace, we ended up with a revitalized Belmont Shore, Marina Pacifica, a Selleck project, all over our city, things are moving along and if it wasn't, I believe, for people such as myself and my other Council colleagues here, that were willing to put the support behind people who wanted to make these developments, we would probably still look somewhat like the city in 1954...

But in the meantime, now I think it's time to move forward. And I feel particularly pleased because the developer is not just a developer that's decided to visit Long Beach and try to give us something quickly and in a hurry. Granted, there have been a lot of bumps in the road, but maybe time has been our friend...we are developing the two heaviest of weights for the downtown area. The development at the Queensway Bay with the Aquarium and a new CityPlace, at the north section, like a barbell at a gym, and now with Councilman Baker and the desire to shift some of the direction from the Promenade and moving more residential development to the Promenade and bringing more to Pine Avenue, I think the people like John Morris and Jeff King and the others who were the pioneers of Pine Avenue will see the success even further in terms of what our city is going to become.

And I find that it's interesting because those of us in Long Beach have had to put ourselves into the forefront. We're not building this project across from Disneyland...across from a Universal City to make it a sure thing, we're stepping out and wanting to make something happen to further develop the downtown and make it a place I think will be a part of what I'd like to describe as the capital of southern California.

I like the project and one last comment, we talked about what is the "wow" factor and I believe the "wow" factor in any project are the people who come to that project...When you look at Disney and Knotts Berry Farm and the others that are those kinds of amusement type centers, they're always changing, every three to four years something rotates in and rotates out. It's because the public has lost interest in the project.

We're not there. This is not that kind of a project. This is a project that's going to be bringing the interest of the people, the sidewalk diners, the people who want to come and visit, the tourists who come to Long Beach, but also just as importantly, the people of our city who I feel are going to see that there are areas of this city that they're missing out on, and they're going to come to them

I've see it in Belmont Shore, I've experienced it with just this increase in, not, well primarily business activity. When I first got involved ten years ago in Belmont Shore, the sales tax revenue was under $200,000 coming to the city. Now it's over $600,000. And there's no "wow" factor. What it is, is the people are coming, they're visiting, they're wanting to participate in a process.

And so I will, as I said earlier, support this project. I believe it's a good one. I believe that the process has been a long one, but I think that sometimes a lot of good comes with a lot of thought in a process like this, and I think this is the project that's going to work and I'm glad to be part of it and being here to vote on it.

Councilman Rob Webb

...One of the speakers mentioned that we were making a fast decision, something that we haven't thought about, and I've got to say for myself, this issue is one that I have thought about more than any other on this Council since I've been on it...

This is one piece of the puzzle that is a critical piece of the puzzle. Many of the speakers that spoke tonight, and I respect their opinions, and I've been reading a flurry of e-mails, these speakers have been involved with that they're opposed to tourism in our city. They feel that tourism is not the avenue that we should be moving in and I've read a lot of e-mails about that recently.

And for us to decide that tourism is not a policy of this city would be to turn out back on the Queen Mary, the Convention Center, the Aquarium, and this area that we're focusing on today. So certainly I think it's a decision that we need to decide as a city if we're all going to be supportive and moving forward in tourism.

And I feel and my constituents all want to see a vibrant downtown. But that doesn't need to be at the expense of the neighborhoods. We can have strong neighborhoods, and a vibrant downtown, and I think that's what we need to be moving forward with and providing that stewardship to see that happen.

...We talked a lot about settling for mundane today. We need to also address the fact that the developer that this city selected years ago had a lot of sizzle; it didn't have any substance. Right now, we have a developer that has some substance and we're asking him to create a little sizzle

And that's why I think all of us concur and realize that the tenant mix that goes into that waterfront entertainment center is critical, and that it is proper, and we've got to provide that link to get our whole downtown from the Mall, and I am supportive of the fact that we have the same developer working on the old Mall that's working on the entertainment center, we're not going to feed one off of the other, and that we need to link this whole project together, and link our downtown, and our Queen Mary, and our Aquarium, and I think it's appropriate for members of this community to come down and ask for us to provide the vision and leadership to see that this linkage happens and gets addressed.

...I've had a lot of discussions with the developer, and had a chance to tell the developer my feelings in the project. I think it's going to be absolutely critical for them to continue to think outside the box on this one. And I gotta say that, I have seen this developer, in my opinion, turn 180 degrees in motivation since we made a decision of this Council that it was either time to fish or cut bait...

Councilwoman Jackie Kell

...The one thing I am continually asked about when it comes to the Queensway Bay project by my constituents is, what's going to be unique about it? What's going to be different about it? Am I going to see something down there that I can't see anyplace else, or at least won't see it unless I travel hundreds or thousands of miles?

And I think that is one of the things that I am interested in, knowing or hoping that the developer will put something unique in there that draws us, that is not the traditional kind of draw.

Now I know that people have talked about Tivoli Gardens and that's in Denmark, and I was over in Tivoli Gardens years ago. And people would say, well you know, when you go to Tivoli Gardens, there's a couple of things you really have to see and they don't sound like they have "wow" factor, but they did.

They had a children's puppet theater, and that was a very, very big hit, you know like the old Punch 'n Judy shows. That was very popular.

Then they said, you know what, you have to get a doughnut on a stick, and OK, I mean how exciting can a doughnut on a stick be. But you go up to this little open shop and they were making the doughnuts right then and there, hour after hour, you could smell the delicious odor. And then, when your hot doughnut came out, they put it on a stick. It was a jelly doughnut, but the jelly goes on the outside of the doughnut. not the inside of the doughnut. They pour your favorite jelly. You want grape, strawberry, what kind of jelly do you want. People were lined up to get a doughnut on a stick...

Then, is it Portland or Seattle, where they have the living science museum? And it's in one of those cities in the northwest and everybody goes there...

But I think we need something different that is included in the project. I mean, since we have a Port out here, we can have products and food and things from all over the world, something we could capitalize on that.

But I would like to see the developers and the rest of us, the residents, the Councilmembers, I think we should look around the country and/or the world, and see what's out there that's unique, and bring that back to Long Beach...

Councilmember Laura Richardson-Batts

...I tell you, anybody who questions, does the Council, are they really concerned, and spend time and think about this stuff, I can tell from all the comments, you know, hearing from colleagues that, I hope the public really sees that we do care and we are trying to explore the best possibilities.

Mr. Mallory, I'm going to put on my business hat, according to the DDA that we are proposing, this will give you approximately 12 months to bring the project to at least a groundbreaking state. Based upon your permits, what's the very last point that you could get idea from the public to explore that you could potentially include in your project?

Mr. Mallory: That's a pretty good question and I'll kind of wrap tat into the "wow" factor...What we're gonna do is, we've kind of laid out a plan...What we've got a framework of generators and things that are going to bring people in at different times, the theater, the I-Max, the bookstore, and those work in my opinion very well with the Aquarium and the Convention Center which already bring people in at different times.

Once we get that form put in, and we can even start construction, the "wow" factor is gonna come as the project's goin' up, and even after it's sittin' there, after the project's there and the roads are in and we have the architecture, all of that is just really bricks and sticks. What really matters is the tenants we put in, the people who'll occupy the spaces, the people who'll occupy the common areas.

We have a lot of common areas. We have a geat big town center.that if we have live performances there, if we have things that, you know, are either bringing schoolchildren there at the same time that they're going to be at the I-Max and the Aquarium, that's gonna activate this place.

What we have to do, our challenge, and it's going to go way beyond the grand opening, the challenge is to make every area of the plan, of the development, activated and we're going to have life to it.

And we're gonna be looking for as much input as we can get, because the thing that's the most important to DDR on this project is that it's successful. Anything short of that is a, you know, it's a failure.

Councilwoman Richardson-Batts: I appreciate your comments of the additional things that we could include, however I think some of the comments from the public may be implying that ther would be some major portions that they would like to see incorporated in this project. And my question to you is, is that posible?

For example, I've heard people throw out the things, a Circus de Sol, a Pike, whatever it is. My question to you is, given today, and given where you are in the process, and given the plans that you have, if something were to be submitted to you, let's say if we were to give the public two weeks, three weeks, whatever it is,to be able to submit ideas that you could appropriately evaluate to se if they're feasible, if they're possible, financial viable and so on, is that possible given the current state that you're in right now in the project to make a substantial impact to this, besides the small tihngs that can be included in the community sections?

Mr. Mallory: Where we're at with the plans, we've designed almost all the buildings in the development, except for the buildings we call "Phase Two" which are, I don't know what the total square footage of those buildings are, it's probably 40, or 50, or 60,000 square foot of buildings.

We've purposely not designed those buildings yet because we wanted to see, you know, how the energy was moving through the development, or how the energy moved with the leasing. And it's our hope that those buildings will catch up and grand open at the same time. Those buildings are wide open.

There is a period of time, if it was three weeks, where people could give us ideas and we would give feedback on it, but that's a very short period of time. We don't have a problem in working in a period of time like that to get ideas and evaluate 'em.

We plan to keep evaluating ideas throughout the whole project, while it's under construction. There may be things that we change after we get 'em started...

Councilwoman Ricardson-Batts: What I'd like to ask you, would you be willing to consider, I think, building on Councilmember Baker, as well as Councilmember Carroll and Kell and others that have spoken here tonight. Would you be willing to give, and I guess really we shouldn't even be asking this question, it's more of a request that we're asking of you, but what I'd like to explore is, if we could please give the constituents approximately two to three weeks to submit ideas that they have and then to properly evaluate them.

And I think a lot of the concerns that I've heard here are warranted. People are entitled to express their ideas and I think they're entitled to hear an answer back. Now it may very well come back a Pike is too big, and it's not feasible and it wouldn't work and all that, and if that's the case, I can support that.

But I think at least we should give a small window of a period, whether it's the constituents, whether it's our downtown business committee I believe that Mr. Taboada chairs. But I think we need to include, and I'm not suggesting in any way that we not move forward on the DDA, in fact I'm prepared to support that, but I think it would strengthen making this project really all of ours in the community if we at least set up some sort of formal period that ideas can be submitted and we could actually look at them, and if they don't work, they don't work. But at least people have an opportunity to share their ideas...

So would you be amenable to that?

Mr. Mallory: Absolutely.

Councilwoman Richardson-Batts:...I've heard discussions about links, connecting the links so that we can ensure that downtown is successful, that the Queen Mary is successful and all of that...[b]ut that's really a responsibility for us to equally work with you to develop.

And I'm looking forward to not only creating links to the ones that I just mentioned, but lo and behold, isn't it interesting that we seem to forget that we also need to link to central Long Beach, to north Long Beach, to Bixby. The City of Long Beach is not just here on the ocean. The city of Long Beach is a wonderful, beautiful area that half a million people reside, and I would hate to see them not be connected as well.

So I'll be looking forward to support this DDA...and I'm looking forward to the steak in the sizzle [sic] as they say...

Mayor Beverly O'Neill

...I would like to just make a comment before I turn to the Vice Mayor to make a motion. I think that you should know that there has been extreme consideration and careful consideration as to this issue. Some people have been involved with this for six years, some of them have been involved a year. And it's gone through every stage. And the longer it goes, the more people either are happy about it, or are not happy about it.

But we are taking the last downtown open area that was designated to be developed for this project. This was in 1995 designated as an area to be developed because we had lost the impact of a billion-three [dollars] a year because the Navy left and we had to find funds and ways to find funds in order to make our city solvent.

I've said many times that we spent the money where we felt we could get a payback. If you're starving, I've said before also if you're starving, you don't go buy a new dress or you figure out a way to feed yourself first.

And it was because of this project that we did receive a $40 million dollar loan from HUD, in 1996 I think it was. And we're able to make the area not just a flat land looking at the ocean but actually an area that is beautiful and can be terraced, will be terraced, an area that it's going to be enjoyable to walk in, on, because you are right by the water.

All of these decisions take big risks. And the Council has studied this probably as much or more than any project that we have been faced with. We're going to have about 3,000 new residents downtown by the time the Camden projects are completed, the area that Post properties was interested in, the Plaza is going to have the housing in that area. So we're not just talking about the people that live here now. We're talking about the new residents that are coming to the city of Long Beach.

I did study the construction, the beginnings of the Baltimore inner harbor. It's basically the same only on the east coast. It's a waterfront project. It has an Aquarium. It has restaurants. It has places that you can walk along the water, and it's constantly filled with people that are enjoying the waterfront. We hope and we are working to have the same thing happen here in the city of Long Beach.

So I want you to know that when you say, but you don't listen to the people, is that some people have been talking about this for six years, and have been giving sugestions, it would not be this far if we hadn't.

DDR and Oliver McMillan have done things such as get all of the architectural and engineering plans and soil and geotechnical investigations, traffic information, permits, the Coastal Commission, appearances before the State Lands Commission, and those things take years and years.

So I think that there is going to be a critical mass. At one time we had hotels and no convention center. People said why do we have all those hotels on Ocean Blvd., those nice ones that are less than 40% occupied, when nobody is here to inhabit them. And it all takes time to bring all of the things together. The convention center has brought the hotels up to over 75% occupancy.

So it's a matter of bringing the critical mass, with the housing, with the developments of the areas that were designated as developable areas, and the slow process of bringing it to fruition. And as Mr. Taboada said earlier, this is an area that is not just the small, or the large area, however you want to look at it in the tidelands. It has the lighthouse, it looks over the Queen Mary, it has the bluff by the lighthouse, it's going to have the Navy monument there. It has a small fishing area. So it's the ambiance of the entire area that we're talking about, and tonight we are talking about the last area that had been set aside for development.

We have to have some bit of a memory with this and when you start planning something, and all of a sudden you find out it's wrong, you do something about it. But if you feel that it's right and you continue to make it as right as can be, then you've spent years and years heading in the right direction. And that's what we've been trying to do with this and this has been careful consideration.

And it's easy for people to say but you're not listening to me. We're trying to listen to everyone in the city, taking into consideration what's necessary for us to exist as a city, what's necessary for us to have what maintains a quality of life and it doesn't come free.

So this is what we are trying for is to make sure that we have the type of developments that will bring the type of economic stability to our city that we do not have yet.

Vice Mayor Baker then made a series of six motions, which all carried 6-1 (Grabinski dissenting):

  • To authorize the City Manager to structure a Mello-Roos bond issue to finance a 2,200 space parking structure;

  • To authorize the City Manager to execute the DDA amendments

  • To direct the City Manager to address the issues of transportation within and surrounding the project and to provide a monthly written report from DDR and the City Manager to the Council regarding oversight and updates on the progress of the project;

  • That the general tax proceeds associated with the project property shall be allocated and used to fund improvements equally within the City Council districts [Councilman Grabinski interjected that he agreed with this policy, and thought it should be City Council policy, but was voting "no" to "stay consistent" on the project.]

  • To work with the City Manager's Downtown Development Task Force and seek their input and advice during this window period to get back to the developer;

  • To direct the City Manager to enter into a side letter agreement with the developer to seek consultation with the best experts in the industry for advice input on urban waterfront entertainment projects.

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