Miscellaneous > Miscellaneous (PUBLIC)
History of Marina- Argonaut series
cho:
Looking back at how Marina del Rey was created
http://www.argonautnewspaper.com/articles/2010/04/01/columns/helga_gendell/h.txt
BY HELGA GENDELL
(Created: Wednesday, March 31, 2010 4:50 PM PDT)
Given all of the discussions regarding Marina del Rey’s purpose as a small craft harbor for boating and recreation, The Argonaut has decided to look at an historical analysis of the Marina to inform the public how, when and for what purpose the Marina was created, as well as identify the individuals involved in the process.
This is Part I of the history of Marina del Rey.
All of the following historical information is cited from “The Urban Marina: Managing and Developing Marina del Rey,” by Marsha V. Rood and Robert Warren of the Center for Urban Affairs Sea Grant Program and published by USC.
In 1887 M.C. Wicks, a real estate speculator, invested $300,000 to develop the Playa del Rey estuary into a major commercial harbor, but he went bankrupt three years later.
At the turn of the century, Abbot Kinney, the cigarette millionaire who later developed Venice of America with an extensive system of canals immediately north of Playa del Rey, was the most active supporter of a harbor at the inlet.
Kinney modeled his development, which was founded in 1905, after Venice, Italy. The area was subject to periodic flooding which Kinney believed could be prevented by construction of a harbor in the low-lying marsh lands extending from Venice on the north to the Del Rey Hills on the south.
Kinney and his engineer were the only participants at a US Corps of Engineers hearing in 1916 on local improvements to present arguments for a commercial harbor at the site. (At that time, Corps authority was limited to commercial harbor improvements).
Kinney’s testimony emphasized that a harbor at Playa del Rey Inlet would provide greater protection for fishing and commercial small craft than Los Angeles Harbor and it was closer to downtown Los Angeles than the existing harbor. No federal action was taken.
The concept of a harbor at the inlet wasn’t revived until the 1930s, when in a 1932 amendment to the Rivers and Harbors Act of 1902, Congress expanded the term “commerce” to include “�the use of waterways by seasonal passenger craft, yachts, houseboats, fishing boats, motor boats and other similar water craft whether or not operated for hire�”
This expanded definition of commerce, combined with a natural disaster in 1933, the flooding of Ballona Creek, stirred local interest.
Members of the Venice Commercial Board and the Bay Cities Property Owners and Boaters Pledge League wrote to Congressman John Dockweiler advocating harbor improvements to the creek to prevent future flooding.
Subsequently, Dockweiler introduced a bill to establish a harbor at Playa del Rey Inlet.
Sen. Hiram Johnson later supported the bill and, as a result, the Senate Commerce Committee ordered a hearing to investigate whether improvements were warranted.
The hearing was held in Venice by the U.S. Army Corps of Engineers Los Angeles district office in July 1936, with 123 people attending, largely representing realtors, commercial interests, chambers of commerce and boat owners.
The hearing officer reiterated the requirement that the proposed improvement should provide national as well as local benefits.
Accordingly, representatives from the Venice Commercial Board, Culver City, the Los Angeles Chamber of Commerce, and other organizations all stressed the importance of the harbor for jobs, flood control, and recreation, as well as the future significance of the harbor to national defense.
Dockweiler addressed this latter point in his testimony at the hearing, where he cited recent naval reports of Japanese fishing vessels that had been spotted off the coasts of Hawaii and California.
In view of these circumstances, he suggested that the small private crafts be viewed as naval militia that could be dispersed at facilities up and down the coast, not just at Los Angeles Harbor.
Taggart Aston, engineering consultant to the Culver City Chamber of Commerce, Harbor and Defense Committee, made the only specific proposal concerning a recreational harbor at Playa del Rey Inlet.
He asked the Corps to consider constructing an outer breakwater harbor at Venice and two 40-acre yacht and small boat basins off Ballona Creek near Culver City at a total cost of $1,412,000.
Aston’s proposal also designated the south side of Ballona Creek for a park and residential area with industry to be developed on the north side.
Aston noted that it was an “ideal site” for the Pan-American Transoceanic Terminal, a proposed hydroplane terminal base for the United States.
From the comments made concerning the proposal, it appeared that the Los Angeles city, county and federal officials agreed with Aston’s basic idea for a recreational harbor and park at Playa del Rey Inlet.
Representative Leland Ford of the 16th Congressional District stated that it seemed to be a “natural spot” for a harbor and that the inclusion of a park could make it into a “�miniature Golden Gate Park for the people of Los Angeles County�”.
J.A. Mellen of the Regional Planning Commission reported that the commission was “highly in favor” of all possible recreational and commercial facilities in the area.
Lindsay Dickey of the Los Angeles City Playground Commission stated that an outdoor swimming pool was needed in the project because the Venice area lacked adequate recreational facilities.
Only one person objected to a harbor development in the area. Mrs. Edwin S. Fuller, conservation director of the National Audubon Society in Inglewood, claimed that 40 or 50 acres were needed at Playa del Rey Inlet for the 73 species of birds in the area.
She objected to the harbor because the associated industrial uses would drive out birds inhabiting the north side of the inlet.
Environmental issues, however, were not among those the Corps was authorized to consider.
The hearing officer made this quite clear when he asked that no further testimony of this kind be submitted, noting, “We are concerned primarily with navigation and flood control�so I would like to ask you to confine your remarks in the hearing as to what bearing this proposed work has on navigation, flood control, commerce and allied subjects of that kind�.
“So in order to save time, I would like to ask that those subjects not be brought up, and certainly not at any length, merely because we are not permitted, by the law, to take them into account. We can simply make a recommendation on this project based on its effect on navigation and commerce and national defense and flood control and allied subjects.”
Looking back at how Marina del Rey was created — Part II; actions taken after a 1936 hearing
http://www.argonautnewspaper.com/articles/2010/04/08/columns/helga_gendell/h.txt
BY HELGA GENDELL
(Created: Wednesday, April 7, 2010 3:33 PM PDT)
Part II of the history of Marina del Rey covers actions taken after the 1936 hearing of the U.S. Army Corps of Engineers with 123 people attending, representing realtors, commercial interests, chambers of commerce, boat owners and one individual concerned about environmental issues.
All of the following historical information is cited from “The Urban Marina: Managing and Developing Marina del Rey,” by Marsha V. Rood and Robert Warren of the Center for Urban Affairs Sea Grant Program and published by USC.
Following the 1936 hearing, Congress approved a preliminary survey for Playa del Rey Inlet. Because information necessary for U.S. Army Corps requirements was unavailable, the Corps asked that local groups submit information on the following questions:
The character, location and established cost of improvements desired;
The value of water-borne commerce and traffic, and size of the craft that the improvement would serve;
The justification for the expenditure entailed, based upon increased traffic and commerce to result, and the value of benefits to accrue;
The necessity for such improvements, with special reference to the requirements of navigation;
The area to be served by the desired improvements; and
The interests to be benefited by the improvements; and the cooperation and/or contribution on what the United States might expect of local interests toward the cost of the desired improvements or in the construction of complimentary works at local expense.
In April 1937, the Los Angeles County Board of Supervisors, at the request of the Culver City Chamber of Commerce and others, assumed responsibility for providing information to the Corps.
The supervisors requested the county Regional Planning Commission to study the economic feasibility of a recreational harbor in collaboration with engineering consultant George Nicholson.
The report, titled “Marina del Rey,” was completed in June 1938. In addition to the economic aspects of the project, the document made a “�. full examination of all aspects of the problem, which sound planning principles require and examined them in relation to comprehensive plans for the physical development of the county as a whole.”
The “Marina del Rey” report emphasized that the harbor would service the recreational needs of an already large and increasing number of boaters in the area.
In preparing the report, the Regional Planning Commission conducted a survey, which revealed that 40 percent of the boats in the area were 15 feet to 20 feet in length; 41.6 percent were between 20 feet and 35 feet long; and less than one percent of the total was yachts (length in excess of 100 feet).
On this basis, the report concluded that “�. these boats form a recreational outlet for a great many of the middle class.”
The commission also justified a harbor at Playa del Rey Inlet in terms of the increased ownership of small pleasure craft, the widespread economic benefit through increased permanent employment and business volume, and the rise in property taxes in the area.
Prior to the report there had been no local agreement about the magnitude of the facility or its design characteristics. Therefore, the Regional Planning Commission’s proposals were considered tentative for purposes of the study.
The preliminary design plan that the commission finally submitted had an estimated cost of $9.75 million.
By reference to a map titled “Marina del Rey,” �an entrance was provided through the mouth of Ballona Creek into a large sailing lagoon (435 acres) which would have created ample space for boat maneuvers as well as an area for small craft recreation.
Around the main lagoon, a series of smaller lagoons enclosed the mooring slips, providing a total water area (including entrance channels) of 646 acres for approximately 5,200 moored boats.
The county was acting without the benefit of any serious previous discussion about financing the project. Consequently, in exploring local funding sources, the report examined those sections of the local California Harbors and Navigation Code enacted in 1937 that authorized the establishment of Recreational Harbor Districts.
Such districts required, among other things:
The filing of a petition by 50 or more property holders who are registered, qualified electors within the district, stating facts concerning the proposed harbor;
A report from the chief of the Division of State Lands approving, or disapproving, the location of the proposed recreational harbor; this report if favorable, to be later approved, or disapproved by the government;
Further investigation by the Board of Supervisors, followed by a resolution establishing exterior boundaries of the district; after hearings, the filing of an assessment map, and the calling of an election;
A majority vote “for the harbor district,” after which the district is formed, a board of later governors is appointed, with powers and duties appropriate to the purpose, including the power to acquire land, not only for the harbor itself, but for bathing, park use, or access; and
All bonds issued payable as follows: A part, not less than one-40th of the whole indebtedness, shall be paid each and every year on a fixed date, together with interest on sum unpaid at such a date.
The last provision made it inevitable that during the construction period and the first few years thereafter, a sum would have to be collected by a property tax upon the district as a whole.
To justify the tax burden for those who were not involved in recreational boating, the intangible benefits of a large park for many recreational purposes became a major theme of the report.
Since no large regional park served this area as the northeast section of the city was served by Griffith Park, there was reasonable justification for this concern.
The report stated, “Any plan for a yacht harbor in this vicinity should be of a character and scope sufficient to provide at the same time for land activities, as well as aquatic.”
The design plans, which are the basis of the economic studies in this report, are consequently comprehensive in character and call for a development of major importance and value to the citizens of the entire county, whether they are interested in boating as a sport, or not.
This report therefore deals with a regional park development, providing for a great variety of year-round activities.
In order to make the Marina a recreational asset for the general public as well as boat owners, the report advised that all of the areas between Pacific Coast Highway and the ocean should be treated as a regional park. Bathing beaches, pools for children’s sports, playfields, picnic grounds, and landscaped areas were all designated on the design plan.
The exact number of acres for land and/or the project as a whole was not specified. The report suggested that an administration building, a post office, a branch library, a chamber of commerce office, and a marine museum and aquarium might also be included.
The plan also contemplated that the county would acquire areas outside the harbor limits for marine-related industrial and business uses such as boat yards, gasoline stations, yacht clubs, charter boats and marine supplies.
On this basis, the report pointed out that it was “erroneous to assume that the initial cost per boat was excessive or that the harbor would serve only those who owned boats; the boat owners, through mooring fees and other sources, will actually contribute more than is expended on the facilities they use, leaving the general recreational facilities (bathing, picnicking, athletics, model boat racing) and the increase in assessed values and attractiveness of the county to its citizens and to visitors, as a net gain to the public.”
cho:
Part III: Looking back at how the Marina was created
http://www.argonautnewspaper.com/articles/2010/04/15/columns/helga_gendell/h.txt
BY HELGA GENDELL
(Created: Wednesday, April 14, 2010 2:58 PM PDT)
Part III of the history of Marina del Rey covers actions taken after Los Angeles County supervisors requested that the Regional Planning Commission conduct a study to determine the economic feasibility of a recreational harbor.
All of the following historical information is cited from “The Urban Marina: Managing and Developing Marina del Rey,” by Marsha V. Rood and Robert Warren of the Center for Urban Affairs Sea Grant Program and published by USC.
A letter from Robert T. Stevens, secretary of the Department of the Army to the speaker of the House of Representatives, dated August 8th, 1952, included a report from the Department of the Army, chief of Engineers [Lt. Gen. Lewis A. Pick].
Stevens said the preliminary examination and survey of the harbor at Playa del Rey and a review of reports on the Playa del Rey Inlet and Basin near Venice was intended to determine whether any improvement of the location was warranted at the time as authorized by the River and Harbor Act approved on August 26th, 1937, and requested by a resolution of the Committee on Commerce, United States Senate, adopted on June 2nd, 1936.”
“The Bureau of the Budget advises that while there is no objection to submission of the report to Congress, authorization of the improvement recommended herein would not be in accord with the program of the President [Eisenhower] unless the federal participation is limited to 50 percent of the cost of the generational navigation facilities,” stated Stevens’ letter.
In response to Stevens’ letter, Donald Belcher, assistant director of the Bureau of the Budget, Executive Office of the President, wrote back saying, “The Chief of Engineers [Pick] considers the proposed federal participation in the project appropriate ‘if it is the intent of Congress to provide federal assistance in the development of recreational boating facilities of the type proposed in this report.’”
Pick’s report included several points such as “relocation of the oil wells, construction of public facilities, providing adequate berthing and other facilities for small craft, and establishing a public body to regulate the use and development of the harbor facilities which shall be open to all on equal terms.” According to the report, “the proposed improvements are designed to meet recreational boating needs and are not significant from the standpoint of commercial navigation.”
Belcher pointed out that in his 1955 budget message, President Eisenhower had stated, “To the greatest extent possible, the responsibility for resource development, and its cost, should be borne by those who receive the benefits.”
Belcher said that the benefits of the Playa del Rey Harbor would be largely local, but would make no contribution to the cost of the general navigation features of the project.
He said that the federal share of the costs of all recreational harbors should be limited to no more than 50 percent of the first cost of providing general navigation facilities, which in the case of Playa del Rey appeared to include the jetties, entrance channel, interior channel and central basin.
After congressional authorization of the project, development of Marina del Rey was a priority for the county in financial, planning and administrative terms, and on September 23rd, 1954, the county created the Department of Marinas and Harbors, subject to the authority of the Los Angeles County Board of Supervisors.
Although these powers were quite broad, the new department’s initial role was primarily one of assisting private consultants in developing the Marina.
As local sponsor of the project, the county would assume responsibility for three-fourths of the cost. Consequently, the Board of Supervisors authorized a study of the project’s economic feasibility and available financing methods.
Funding the Marina through general obligation bonds would have required that the bond issue be approved by a two-thirds vote of the electorate. Revenue bonds, on the other hand, needed the approval of only a majority and did not obligate the county’s general fund. A specified amount of revenue from the Marina’s operation would be designated for their redemption.
In March 1955, the Board of Supervisors hired George Nicholson and Company to “prepare a schematic plan for the facility and to conduct an economic feasibility study.”
Nicholson’s firm, along with the assistance of the Department of Marinas and Harbors, “was directed to reduce the Marina’s total cost and to increase the amount of land available for revenue-producing activities.”
In March 1956, Nicholson’s report stated that the project was economically feasible and provided the general rationale for undertaking it. The report included:
The 1955 population estimate of five million on the Southern California coast, and projections of future population growth;
The shortage of anchorages in the area, Los Angeles, Long Beach, and Newport harbors being the only existing facilities for small craft;
The inadequate arrangement for small craft at the predominantly commercial Los Angeles and Long Beach harbors;
The high cost of transportation to Newport Harbor;
An expanded demand for mooring space due to increases in population and boat ownership; and
The constraint of boat ownership in the area due to limited mooring space.
Nicholson’s report found “that the anticipated increases in annual tax returns from the Marina’s operation would justify the county’s spending $12.6 million for site acquisition and approximately $9.6 million for construction. Nicholson concluded that the possible future revenues justified a “rapid and bold program of acquisition and construction at the earliest possible date.”
Nicholson’s report also included a new physical design for the harbor, “Alternative Schematic Plan No. 2,” which had been adopted by the Board of Supervisors on February 21st, 1956. The revised plan altered the shape of the harbor, discarding the sailing lagoon (elliptical basin) for a straight main channel with seven moles.
The new design addressed the Marina’s cost problem in two ways; it decreased the total area from 1,170 acres to 918 and increased the amount of land from 453 acres to 508.
This had the effect of making more revenue-producing land available while actually lowering the site acquisition costs, the report stated.
As its first action, the county began acquiring rights-of-way for the project and designated $1,373,074 for initiation of the proposed project. The US Army Corps of Engineers, however, made further changes in the design
when it formally approved the agreement.
In its “Design Memorandum No. 1, General Design for Playa del Rey Inlet and Harbor, Venice, California,” dated November 1956, the Corps further reduced the total acreage for the proposed harbor from 918 acres to 824 acres.
The amount of water acreage, however, was increased from 410 to 451 and the amount of land acreage was reduced from 508 to 373. As can be seen from a comparison of maps, the major land reduction was in the area bounded by Lincoln Boulevard, Basin H and the Ballona Creek Flood Control Channel.
The Corps’ plan called for 6,200 mooring slips and provisions for 2,000 trailer-mounted craft. This was a greater number of slips per water acre than its previously approved plan for 8,000 slips utilizing 717 acres of water.
The design eliminated the sailing lagoon that precluded the use of the Marina by small boats seeking protected waters and/or recreational areas.
This authorized redesign officially changed the basic character of the Marina from a traditional recreational harbor to a berthing facility whose waters would be used primarily for entrance and exit by larger recreational craft.
The initial decision of the county to eliminate the sailing lagoon and the actions of the Corps in making official design changes took place without public hearings.
There was an increase in the proposed local share of almost $4 million and a reduction in federal involvement of almost $3 million between 1954 and 1958 because of final modifications in design involving dredging, realignment of roads and adjustment of beach lines.
The county proposed to meet its obligation by a resolution submitted to the electorate on November 6th, 1956, calling for the issuance of $13 million in revenue bonds to finance small boat harbor improvements and facilities for the public’s convenience.
The voters approved the measure by a two-to-one margin. In addition to the bonds, the Board of Supervisors allocated $15 million from the county general fund for land purchases and borrowed $2 million from the State of California to provide its share of Marina funding.
On November 18th, 1958, a deed for “Perpetual Right-of-Way and Easement” between the County of Los Angeles and the United States of America was signed by Burton W. Chace, chairman of the Los Angeles County Board of Supervisors.
Land for the Marina was acquired between 1957 and 1959, primarily from private parties through condemnation or negotiated sales.
All but a small portion of the area was located in unincorporated territory under the direct jurisdiction of the county.
Several uninhabited parcels of land included in the project were owned by the county, but were within the City of Los Angeles. By agreement, these sections were disincorporated from the city in December 1960.
Looking back at how the Marina was created: Part IV
http://www.argonautnewspaper.com/articles/2010/04/22/columns/helga_gendell/hg.txt
BY HELGA GENDELL
(Created: Wednesday, April 21, 2010 3:28 PM PDT)
Part IV of the Marina del Rey history covers actions taken after several uninhabited parcels owned by Los Angeles County but located in the City of Los Angeles were disincorporated from the city in December 1960.
Marina del Rey had become an authorized federal project under the Omnibus Bill, Public Law 780 (signed by President Eisenhower in 1954) — that stated, “Playa del Rey Inlet and Harbor, Venice, California: House document 389, 83rd Congress: Provided, that federal participation in the provision of entrance jetties, entrance channel, interior channel and central basin recommended in the project report and presently estimated to cost $7,738,000 shall not exceed 50 per centum of the cost thereof.”
In a preliminary examination and survey of the area years earlier, Lt. Gen. Lewis Pick, chief of engineers for the Department of the Army, said, “The proportion of federal and non-federal participation recommended by the Board of Engineers for Rivers and Harbors is considered appropriate if it is the intent of Congress to provide federal assistance in the development of recreational boating facilities of the type proposed in the report.”
The report also stated, “The proposed improvements are designed to meet recreational boating needs and are not significant from the standpoint of commercial navigation.”
According to Pick, local interests consider that the proposed harbor would be an integral unit of an adopted general plan for development of the Santa Monica shoreline.
“The plan includes widening and improving beaches, providing adequate bath houses, parking areas, picnic facilities, special recreation centers, bathing and wading beaches, fishing piers, youth organization camps, tourist parks with cabin and trailer accommodations, and a bird refuge; and
“Provide without cost to the U.S. all necessary slips and slip facilities and facilities for the repair, service, and supply of small craft on terms reasonable and equal to all; and secure and hold for public interest lands bordering on the proposed improvement to a depth sufficient for the proper functioning of the harbor.”
In subsequent discussions between Pick and the U.S. Army Corps of Engineers, it was stated that local interests had requested provision by the U.S. of a harbor for small craft as part of a comprehensive plan for park and beach development including recreational boating facilities, emphasizing the need for adequate facilities for small craft in the Santa Monica Bay area and nearby districts.
In these communications, it was stated that the district engineer found a need for additional harbor facilities for small craft in Southern California, particularly in the Santa Monica Bay area.
Pick estimated that, on the basis of the California average of 2.79 boats per 1,000 population, the immediate tributary area would sustain about 6,500 small craft, and on the basis of the Los Angeles average of 1.6 boats per 1,000 population, the remaining tributary area would sustain an additional 960 craft.
“The Board of Engineers for Rivers and Harbors concurs in the views of the reporting officers that a need exists for a harbor with an ultimate capacity of 8,000 small craft in the vicinity of Playa del Rey.”
“The plan recommended by the district engineer together with work to be performed by local interests will provide a suitable improvement. Total benefits are sufficient to justify the expenditure required,” said the Board of Engineers.
“The board believes that in addition to the evaluated benefits resulting directly from construction of the small boat harbor, benefits would accrue to local interests from the use of the area as a park facility.
“It can be expected that the area will be visited and enjoyed by many persons in no way connected with small boat commerce.”
The construction of Marina del Rey for the purpose of recreational small craft boating later ran headlong into financial expectations and difficulties when the Marina’s inability to attract investors created considerable fear about not meeting a $13 million revenue bond obligation.
According to “The Urban Marina: Managing and Developing Marina del Rey,” the county proposed to meet its obligations by a resolution submitted to the electorate on November 6th, 1956, calling for the issuance of the revenue bond obligation to finance small boat harbor improvements and facilities for the public’s convenience.
The voters approved the measure by a two-to-one margin. In addition to the bonds, the Board of Supervisors allocated $15 million from the county general fund for land purchases and borrowed $2 million from the State of California to provide its share of Marina funding.
The county lobbied the California Legislature’s 1958 session to change a law that placed a ten-year limit on granting concessions in projects financed in whole or in part by revenue bonds.
The county expected that the ability to enter into longer-term lease agreements would increase the marketability of the bonds as well as allow their sale at a lower rate of interest. The legislature was responsive and amended the law to permit leases of up to 60 years, after which leasehold facilities reverted to the county.
Since the bond obligations were to be met by rents from concessions in the Marina, the profitability and stability of potential uses became of major concern in the economic feasibility study conducted by county consultant Coverdale and Colpitts.
In the consultant’s study, the firm inspected 60 marinas and yacht clubs along the Pacific coast, the Great Lakes and the Florida coast. The most successful marinas were developed in proximity to heavily populated urban areas.
This finding was used as a basic factor in justifying the suitability of the Los Angeles area for supporting a marina.
The firm also gathered data on ship chandlers, ship brokers, small boat repair yards, clubs, marina fuel stations, launching areas for small boats, cabanas and trailer-cabanas.
Subsequently, Coverdale and Colpitts recommended that all these facilities be included in the Marina. The firm did not consider residential developments as a potential use in the project.
After the Corps of Engineers completed the engineering work on the Marina channel and the procedures for issuing revenue bonds were established, the main focus of county activities became site leasing.
Once underway, the pattern of events produced several changes in the formal organization for managing the Marina.
In December 1959, the Board of Supervisors appointed Victor Gruen Associates to develop a land use plan for the Marina that could be used as a guide for soliciting and evaluating lease bids.
Gruen submitted a “Development Plan for Marina del Rey Small Craft Harbor” the following May and revised it in September 1960 to respond to the reactions of the investment community.
Gruen developed the plan to allocate revenue-producing uses recommended by Coverdale and Colpitts. One major addition was the option of building apartments on some parcels.
The document detailed the parceling of the land and related the uses to one another with respect to circulation and density.
Gruen’s work was conducted independently of the Department of Small Craft Harbors although the department did provide support and assistance (in May 1959, the department name was changed from Department of Harbors and Marinas to Department of Small Craft Harbors).
As in the case of Coverdale and Colpitts, a primary goal in the Gruen design was to enhance and protect the revenue-producing capability of the Marina, and thus the county’s ability to meet its debt obligation.
The appointment of a Marina harbor controller and a property manager was the next step in the process. They assumed the responsibility for writing leases based on the Gruen land use plan and issuing lease bids in response to current market demand.
All three consultants for the Marina — George Nicholson, Coverdale and Colpitts and Gruen Associates — had recommended that aesthetic standards and landscape quality be maintained by a review and approval process for any structures to be built.
On February 23rd, 1960, the Board of Supervisors adopted an order appointing a Design Control Board (DCB) “to assure conformity on the part of successful bidders who may construct improvements within the Small Craft Harbor.”
The Design Control Board was formed as an autonomous body whose decisions could only be reviewed by the Board of Supervisors and whose membership consisted of two architects and one businessman.
To establish basic design and construction criteria for the lessees, the supervisors approved and adopted the Marina del Rey “Specifications and Minimum Standards of Architectural Treatment and Construction” on January 3rd, 1961.
The Marina del Rey lease form binds lessees to accept these architectural standards (and amendments) and to acknowledge the authority of the Design Control Board over their project designs.
This basic organizational structure might have continued (supervisors, DCB and Department of Small Craft Harbors) had problems not arisen over the leasing procedures.
The department put 13 parcels up for bid in January 1961, but there was much less competition than predicted by the consultants, and only three of 13 parcels finally leased had more than one bid.
Rex Thompson, director of the department, blamed the slow start on the current economic recession and the fact that potential lessees were unable to obtain Federal Housing Administration (FHA) guaranteed loans.
This poor showing in lease bidding created concern among bondholders, and in July 1961, bondholder representatives met with individual county supervisors several times.
Ernest Debs, chairman of the Board of Supervisors, expressed doubts that the board was adequately informed by the department and suggested that to remedy the problem, supervisors would be better informed if each member of the board were to name a leading businessman to a special advisory commission. But Supervisor Burton Chace, whose Fourth District contained the Marina and who was chairman of the Department of Small Craft Harbors, was strongly opposed to the idea.
The question of leasing policy became a matter of wide public debate during the summer of 1961. In a series of articles, Los Angeles Herald-Express reporter Jack Keating charged that the county was engaged in “give-away deals.”
He criticized the methods that the supervisors used in Marina del Rey and elsewhere for awarding private concessions and renegotiating recreational facility contracts.
In one article, Keating specifically questioned whether favored parties were receiving special treatment in the allocation of Marina del Rey concessions. He noted that only three of the 13 parcels leased at the Marina received more than one bid, while Long Beach and Redondo Beach yacht harbors had obtained multiple bids in virtually every concession category.
Keating charged that “Marina officials admitted they were able to make only a limited effort to publicize bidding, blaming it on legal rulings that neither county general funds nor harbor bond revenues could be spent for such purposes;
“That ground rules set up gave the Board of Supervisors great leeway in rearranging lease parcels and defining their usage, the reporter wrote;
“The Board of Supervisors and Marina officials had wide discretion in evaluating bidders’ qualifications;
“Important changes had been made in the original Marina master plan as well as the first bidders’ manual, containing bidding details, which some would-be bidders had not learned of. These changes made bidding more favorable and might have encouraged wider bidding if generally known; and
“Descriptions of permitted uses of certain Marina parcels advertised have been so broad and vague that prospective bidders could hardly proceed without inside information on what type of facility would finally be accepted.”
Finally, Keating asserted that the claim of favoritism was supported by Chace’s strong opposition to Debs’ proposal to place the leasing activities and management of the Marina under the “watchful eye” of a citizen’s commission.
According to “The Urban Marina: Managing and Developing the Marina,” a series of actions, often determined after consultation with financial advisors and bondholders, gave greater protection to creditors and created more attractive conditions for lessees.
These steps included amending the Marina del Rey Revenue Bond Resolution, narrowly defining the “Active Public Use” clause in the standard lease to facilitate construction of apartments and reorganizing the Design Control Board to more effectively expedite lessee development plans.
Two important effects grew out of the policies devised to meet the financial crisis. First, the priority upon high-revenue producing facilities led to a more intensive development of residential and commercial facilities than had been anticipated originally.
This policy, in turn, transformed the Marina from a small boat harbor into an intensely developed residential-commercial-recreational complex. It also created strong disincentives for low-cost or free public facilities.
A second effect grew out of the first. In the process of ensuring that debt requirements would be met, a tradition of consultation and day-to-day communications developed between Marina administrators and lessees.
This interaction of county officials, lessees and bondholders helped shape the initial policies, procedures, and communication channels for managing the Marina.
cho:
Looking back at how the Marina was created: Part V
http://www.argonautnewspaper.com/articles/2010/04/29/columns/helga_gendell/h.txt
BY HELGA GENDELL
(Created: Wednesday, April 28, 2010 4:07 PM PDT)
Part V of the Marina del Rey history covers actions following the interaction of Los Angeles County officials, lessees and bondholders who helped shape the initial policies, procedures, and communication channels for managing the Marina.
The following information is cited from “The Urban Marina: Managing and Developing Marina del Rey” by Marsha V. Rood and Robert Warren.
After Los Angeles Herald —Express reporter Jack Keating’s article about the county being engaged in “giveaway deals” (sourced in Part IV, April 22nd Argonaut), pressure about Marina policies arose from another source in the latter part of the summer of 1961.
Residents and property owners on the Marina’s periphery began to react to the project’s implications for the overall area. In August 1961, the Small Property Owners League of Los Angeles County and the Venice Canal Improvement Association asked by letter that the county grand jury investigate the propriety, if not the legality, of a number of the Marina’s aspects, charging:
The many apartments planned will compete with the existing buildings surrounding the Marina;
An investigation should determine whether government money should be allocated and bond restitutions should have been allowed in a venture that considers the profit to outside investors above the welfare of taxpayers and constituents in Los Angeles County;
Three 13-story apartment buildings and three-and-four-story parking structures for cars place the accent on planned land use and minimize water use and boating aspects. Only one boat haul-out concession had been announced when launching facilities are most urgently needed in Southern California; and
The Marina, unlike others throughout the U.S., is designed to exclude view from the outside.
The letter to the grand jury concluded with this statement:
“We believe that no government-subsidized profit-making venture of this magnitude should lawfully exist which can in any way prevent orderly growth of other public and private developments.
“We ask that the investigation bring to light the effect of this arbitrary attitude on surrounding property owners and area residents, and that the secrecy be lifted so the public can be informed as to all planned future land and water use, and that all directors and officials of the combined management of this county engineer corps project be instructed to fully regard the immediate surrounding entities in their plans for immediate and future use of land and water.”
No grand jury action was taken on the request. However, the cumulative effect of bondholder concern over the failure to attract competitive bids, newspaper charges of favoritism, and opposition to developmental policies from some neighboring property owners produced changes in the Marina management structure.
The county Board of Supervisors voted on August 16th, 1961, to create a five-man citizens’ “watchdog committee” to act as an advisory body.
The lone opposing vote came from Supervisor Burton Chace. In support of the move, Supervisor Kenneth Hahn declared, “I think it’s high time the board acts, before there is more serious criticism, to keep the public informed on what is going on.”
Supervisor Ernest Debs argued that, “I am advised that some $19.5 million of the taxpayers’ money has gone into the Marina. In this case, I would feel a lot better if we had a citizens’ commission. My appointee will be an outstanding man from the field of finance.”
The supervisors voted that the members of the Small Craft Harbor Advisory Commission, appointed for three-year terms, would have training in one or more of the fields of corporate or governmental finance and investment; commercial or governmental construction; real property management; recreational harbor or port planning, management and operation; and public or private corporate executive management.
Further steps were taken to deal with the leasing problem. On the same day the commission was approved, Debs insisted that no further contracts be awarded until the commission was organized and could conduct a complete inquiry into all phases of Marina operation and all harbor leases.
He specifically demanded that:
“Whenever there is a lone concession bid, it should be rejected and the Marina director be instructed to obtain more competitive bidders.”
Subsequently, the supervisors instructed the county counsel, the CAO and DSCH to make an inquiry into leasing procedures relating to the Marina. On the basis of the report submitted to the board on leasing practices three weeks later, the supervisors revised the lease terms to make them more attractive to potential bidders and acceptable for Federal Housing Administration insurability.
Major changes included:
Private clubs — the requirement in the lease excluding private clubs was stricken from future leases as well as those already executed;
Price control — the amendment specified that decisions made by the director on prices to be charged by lessees could be appealed to the Board of Supervisors;
Rent renegotiation and arbitration — rent increases were not to be made during the first five years, nor more often than ten; and
Subleasing — the lessee could now, without prior approval of the director, sublease portions of the premises (including but not limited to, single residential units, boat slips, and dry storage racks) for individual, non-business, non-commercial uses.
Just as the formal structure for managing the Marina had emerged by 1961, so had a series of decision-making rules for the facility’s development.
Most of these rules stemmed from the county’s fiscal obligations and were pervasive in influencing the character of all subsequent Marina development.
The common view of the Marina as a “business venture” and its special status as a public facility is reflected in a letter written to acting director of the DSCH, Arthur G. Will, from the county counsel, Harold W. Kennedy, in November 1961:
“Under the county charter and the organization of county government, the Board of Supervisors is responsible for the proper conduct of all county departments including the department specifically created to have charge of the Marina Project.
“From a legal standpoint this department is somewhat different from other county departments in its origin and concept.
“Most departments are service departments and involve an obligation against general funds, but this department must have revenue and be run as a business venture in order to satisfy the requirements of the bond resolution.”
The decisions made during the 1960s concerning the range of facilities in the Marina and the type of physical development that took place can be best understood in terms of the following rules:
Protect the bondholders’ investment in the Marina Project (if the DSCH and/or the commission did not do so, default proceedings could be brought against the county);
Protect general revenue production of the Marina —the Marina plan was to be revised periodically to ensure that the project would achieve financial stability and thus ensure its existence. Two million dollars was established as the “break-even point” to pay off bond indebtedness (interest and principle) and operating costs. After minimum bid rents were exceeded, rental rates would then be based on a percentage of lessee’s gross revenues;
Lessees must have more than one bid to ensure against charges of favoritism by the press and the public;
Facilitate leasing by making lease provisions more attractive to potential lessees; and
Establish lines of communication between the Design Control Board, the Small Craft Harbor Advisory Commission (later named the Small Craft Harbor Commission), the Board of Supervisors, the Department of Small Craft Harbors, other government agencies, and the public.
[In November 1965, “bondholders voted overwhelmingly to forego bond redemption payments indefinitely,” according to a Los Angeles Times article by staff.]
[“The move, said harbor officials, served to cut the project’s operating deficit in the current fiscal year from an estimated $593,000 to $380,000. The reduction in the deficit will mean that a substantial part of $600,000 in tax money made available to the marina project by the Board of Supervisors last month will not be needed,” according to the Times article.]
THE JOHN AND WILLIE HJORTH CASE —
By the time the dominant residential and commercial character of the Marina had become well established in the late 1960s, many slip renters began to perceive the pattern as a threat to the traditional boater’s lifestyle and as the cause for the excessive facility use costs.
The experiences of one boater, John Hjorth, and his wife, Willie, were important in dramatizing some of these feelings.
John and Willie Hjorth came to Marina del Rey as live-aboards in 1964 and signed a rental agreement for a slip on an anchorage parcel that had no apartment structures.
The anchorage changed hands twice, and by the end of 1967, it was owned by the Ponty-Fenmore Company and was called Tahiti Marina.
The Hjorths, who had two children, were offered a new slip rental agreement. They believed its terms were more restrictive than their original month-to-month sublease and retained the latter.
Meanwhile, Ponty-Fenmore constructed 149 apartments on the parcel which were advertised as having recreation facilities including outdoor swimming and therapeutic pools; fully equipped separate gyms for men and women, along with saunas; a beautiful new clubhouse, billiard rooms, sun decks, sheltered patios and barbecue pits; outdoor play areas; subterranean parking for more than 200 cars; extra storage space; laundry facilities; and all the comforts of home a step away from a Tahiti mooring.
In March 1969, Tahiti Marina served John Hjorth notice that he had no agreement in effect and asked him to sign a new lease. He again refused to sign the more restrictive lease that stated that only adult live-aboards would be allowed.
On April 1st, 1969, Hjorth received notice to “quit his premises” within a month unless a new agreement were signed. Under California law, a landlord can give a tenant a month’s notice to quit in the absence of a lease.
The reason for the notice need not be given, but in this case, the Tahiti Marina indicated that it did not wish to assume the insurance and liabilities incurred with minor children living at the anchorage.
There were rumors circulating at this time that a Marina-wide policy of no live-aboards was about to be adopted. Many interpreted this rumored action as an attempt by lessees to make slips available in package deals for prospective apartment residents.
True or not, the matter seemed to illustrate to live-aboards that the Marina was becoming a less favorable environment.
Beginning in April 1969, John Hjorth tried to prevent his eviction by writing letters and talking with other boaters.
Failing an accommodation with the Tahiti Marina, he wrote to the Department of Small Craft Harbors, Chace and the Harbor Commission of the state of California.
A petition was also sent to the department signed by boaters supporting Hjorth’s efforts to remain. While refusing to take action, the department did request a ruling from the county counsel on the county’s responsibility to the tenant.
The county counsel issued an opinion on April 30th 1969, that the county had no jurisdiction because it was a matter between the tenant and the lessee.
County counsel cited a section of the standard lease between the county and lessees which states: “Lessees may, without prior approval of the director, sublease portions of the demised premise (including but not limited to, single residential units, boat slips and dry storage racks) for a period not to exceed one year, for individual, non-business, non-commercial use.”
This section was a 1961 amendment to the original standard lease form that had required county approval for all subleases.
From one perspective, the change was a positive one. It removed the objections of prospective lessees and eliminated the necessity for departmental review of all subleases.
From another point of view, the modification meant that the right of on-commercial subleases to take their grievances to the county is non-existent or ambiguous at best.
Hjorth also took his case to the Pioneer Skippers. He stressed that as boaters, they could be threatened and evicted as he was. The group, however, was willing to give him only verbal support without taking any formal action.
A series of maneuvers involving Hjorth continued to August 1970 and included:
Using the press to create public pressure to stop the eviction;
Being taken to court in October 1969 with a resulting agreement for an 18-month stay of eviction without appeal while he looked for another slip;
Refusing to vacate at the appointed time on the grounds that he had been blackballed by other marinas and had no place to go;
Going back to court to unsuccessfully challenge its jurisdiction over the matter; and
Forcing Tahiti Marina to have a U.S. Marshal evict him and have his boat moored in a county slip because no other place could be found.
Hjorth’s activities spotlighted a number of existing and potential problems that boaters faced in the Marina and contributed to the gradual involvement of the Pioneer Skippers in Marina-wide management questions.
At the same time, the department and commission were undergoing adjustments in their relationship with boaters.
The emergence of slip tenants as a constituent group in the Marina’s policy making is reflected in three boater-related matters: slip rental rates, slip rental agreements and the construction of a do-it-yourself boat yard.
Looking back at how the Marina was created: Part VI
http://www.argonautnewspaper.com/articles/2010/05/06/columns/helga_gendell/hg.txt
BY HELGA GENDELL
(Created: Wednesday, May 5, 2010 3:52 PM PDT)
Part VI of the Marina del Rey history covers the beginning emergence of slip tenants as a constituent group in the Marina’s policy making, reflected by boater-related matters such as slip rental rates, slip rental agreements and the construction of a do-it-yourself boat yard.
The following information is cited from “The Urban Marina: Managing and Developing Marina del Rey” by Marsha V. Rood and Robert Warren.
By the 1960s, non-resident boat slip renters raised a series of issues that proved difficult in many cases, for the existing management system at the time to resolve.
Points of conflict included questions of excessively high moorage fees, preferential parking for Marina residents, inadequate parking, lack of a do-it-yourself boat repair area, and county authority to regulate lessee operation of moorages.
In addition, the priority of high-revenue producing activities over more publicly oriented land and water uses came under severe criticism from several groups.
In their first efforts, groups representing these new issues faced considerable difficulty in gaining recognition in the Marina decision-making processes.
A management system that has evolved to further one set of priorities is frequently resistant to legitimizing new ones, particularly if it requires giving status to interests (those of non-resident boaters) that may conflict with those already participating in management decisions (the lessees).
SLIP TENANTS AS “CITIZENS” OF THE MARINA —
The major issues that developed in the post-1968 period have involved policy questions concerning the use of existing facilities and the inclusion of boater interests in management decisions.
The status of boaters, until recently, has been defined in terms of their positions as sub-lessees.
In effect, this means that the primary relationship of the boater is with the yacht club or the moorage operator rather than with the Department of Small Craft Harbors. This relationship is in contrast to the prime lessees who work more directly with the county.
When many slip renters began to initiate policy questions in the late 1960s, a number of ambiguities immediately became evident concerning their status and rights.
The ensuing conflicts and polarization of some slip renters have resulted in a much more visible and substantive role for boaters in the management process.
A distinction is drawn in the study between the approximately 2,000 people holding slips through yacht club memberships and those who hold non-commercial subleases from commercial moorages.
The two largest clubs, the Del Rey Yacht Club and the California Yacht Club are prime lessees and the other four clubs hold commercial subleases. The clubs, as a result, have control over policy making for the use of their own slip facilities.
Either through shared values, membership participation in decisions, or competition for members, the clubs have been responsive to boating interests and as commercial lessees or sub-lessees have had a recognized status in the overall Marina management system.
Most of the remaining 4,000 slip tenants who hold individual, non-commercial subleases rent from firms that are virtually free to make their own rules and regulations concerning the use of their facilities.
It may not be surprising that the interests and values of slip tenants (particularly live-aboards or traditional boaters) and those of profit and development-oriented entrepreneurs might differ at times.
The primary organization representing these boaters is the Pioneer Skippers with a current membership of over 1,000. It was established in 1963 as a social organization and didn’t become seriously involved in management questions until recently.
SLIP RENTAL RATES —
The cost of moorage space in the Marina became a matter of controversy in early 1970. It represents the first major issue the Pioneer Skippers became involved in, but has not yet been resolved satisfactorily from the Skippers’ point of view.
The prices charged by lessees for goods and services within the Marina are subject to regulation by the county.
Section 16 of the standard agreement states that the costs for such goods and services shall be both “fair and reasonable” for the public and allow lessees a “fair and reasonable” return on their investment.
The same section makes the director of the Department of Small Craft Harbors responsible for enforcing the provision and delegates authority to the director to inform a lessee if any prices are found to be unfair or unreasonable.
The lessee can object to the director’s finding, but is required to accept his or hers subsequent determination. An appeal can be made to the Board of Supervisors, but under the terms of the standard lease, their action is final and conclusive.
A call for the director to use this authority in relation to boat slip charges and a vigorous demand for better representation of boaters in Marina policy decisions was made by spokespersons for the Pioneer Skippers.
At the Small Craft Harbor Commission meeting of February 1970, a member of the Skippers made it quite clear that boaters as a group “want to be heard. We want to have a voice. We want to be a party to decisions made in this Marina� We also have an interest in the overall development of the Marina� We have appointed ourselves until there is another spokesman to present our position in the Marina. We will be glad to step aside when someone else comes along.”
The Skippers charged that unreasonable price increases had occurred while service levels had steadily decreased. The group further claimed that moorage operators were giving apartment dwellers preferential treatment for parking spaces in spite of the severe parking shortages for non-resident slip renters on peak usage days.
As a result of the Skippers’ charges and a follow-up request by the group’s attorney that “boaters be a party to the decisions made as they affect boat owners,” the department established an advisory Price Review Committee in March 1970.
Five boat-owner representatives, including one member of the Skippers, and three lessee representatives were appointed to the group.
The operation of that committee through the spring brought the Skippers little satisfaction. During this period, the boater organization urged the Board of Supervisors to impose rent ceilings, alleging that there had been, “A deliberate and systematic unfair treatment of the boaters by certain lessees which shows that the county has chosen to exercise little control to protect the public from profiteering.”
Frustration had reached a high enough point in June 1970 that the president of the Skippers stated that the Small Craft Harbor Commission was “in business with the lessees�” who operated the anchorages and were benefiting from high slip rates.
When that commission asked the group to provide a list of its members as evidence of its right to speak for boaters, the group refused to comply out of fear that there might be lessee reprisals against individuals.
The Skippers further expressed its disappointment with the committee by pointing out that eight of the 17 moorages in the Marina had raised their rates since the price review body had been established.
Unlike its reaction to the John and Willie Hjorth case (Argonaut, April 29th), the Skippers went on to become involved in another slip tenant case. Many members expressed concern that the future of all boat owners was at stake because eviction without cause was allowed in a second and more protracted conflict in October 1971 when the same Tahiti Marina issued more new and more restrictive conditions for leasing slips.
Ponty-Fenmore, operator of Tahiti Marina, issued new and more restrictive conditions for letting a slip including:
Persons cannot live aboard their boats for periods longer than three days;
Dogs are forbidden aboard boats and on docks, and tenants who violate this rule face immediate eviction;
Boat maintenance and repair are forbidden. This included use of paint remover, painting of topsides, burning of paints and spray guns. The anchorage management will be the sole judge of what constitutes ordinary maintenance;
Tenants will be assessed an additional one dollar per day for each day they are late with their slip rents after the first ten days;
The dock master has the right to move a boat to a different slip from the one that was originally rented;
Those who leave their boats more than 30 days without paying rent will be assessed $20 a day for each day they are in possession of their slip; and
The anchorage operator may file a possessory lien against a boat and its contents if the terms of the lease are violated. The tenant who takes action against the anchorage operator must agree to pay the anchorage attorney’s fees of not less than $250.
These requirements eliminated living aboard boats as a lifestyle and gave the lessee extraordinary discretion in moorage operations.
The Marina del Rey Historical Society is compiling memorabilia for its collection. If you have photos, documents or any special memory of the Marina you would like to share, please contact the society at (310) 578-1001, or mdrhistory@verizon.net/.
cho:
Looking back on how the Marina was created: Part VII
http://www.argonautnewspaper.com/articles/2010/05/14/columns/helga_gendell/hg.txt
BY HELGA GENDELL
(Created: Wednesday, May 12, 2010 3:54 PM PDT)
Part VII of the Marina del Rey history covers a boater’s lawsuit against the lessee, Ponty-Fenmore, operator of Tahiti Marina, after the issuance of new and more restrictive conditions for leasing boat slips.
These requirements eliminated living aboard a boat as a lifestyle and gave the lessee extraordinary discretion in moorage operations.
As a point of reference regarding Los Angeles County officials’ recommendations to the county Board of Supervisors about Marina del Rey, a September 6th, 1970 Los Angeles Times staff-authored article titled “Officials Object to More Marina Parking,” stated, “County officials have recommended to the Board of Supervisors against the proposed acquisition ‘at this time’ of additional parking lot space at Marina del Rey.
“In a report to be considered by the board Tuesday, September 8th, officials urged supervisors to:
“1 - Forego at this time any idea of condemning private property bordering Fiji Way at the marina’s south boundary; and
“2 - Postpone any action on acquiring more parking facilities pending a study by Victor Gruen and Associates on how to provide better transportation and traffic movement for the entire marina.”
The article continues, “The Gruen firm has been awarded an $18,000 contract, with instructions to report by July 1st, 1971.”
“Joining in preparing the preliminary report on whether another parking district at Marina del Rey is feasible were Lindon S. Hollinger, chief administrative officer; County Counsel John D. Maharg; Arthur G. Will, director of the Department of Real Estate Management; and Irvin L. Morhar, county road commissioner.”
The Los Angeles Times article goes on to state, “The two-page report, prepared at the request of Supervisor Burton W. Chace, made these points:”
“1 — The idea of acquiring more private land for marina parking is feasible, ‘but only by direct condemnation. Extensive discussions with representatives of the land owners regarding the (possible) lease of the land for a parking lot have had negative results;’”
“2 — Estimated cost of the land and development for parking purposes ranges from $200,000 to $400,000. A minimum of two years would be needed to get condemnation proceedings before a court, and the proceedings could take longer if the owners actively oppose condemnation;”
“3 — Some existing county-owned parking areas at the Marina presently go unused;” and
“4 — The Gruen study may produce recommendations for additional needs or for better utilization of existing or potential parking areas.”
The following information is cited from “The Urban Marina: Managing and Developing Marina del Rey” by Marsha V. Rood and Robert Warren.
Ponty-Fenmore’s action was immediately protested by Robert Feldman, a live-aboard at the Tahiti Marina, at the October 1971 meeting of the county Small Craft Harbor Commission.
Feldman presented a petition signed by slip renters at the three Ponty-Fenmore anchorages, requesting that the commission act upon the matter prior to October 31st, 1971, when Feldman’s rental agreement had to be renewed.
The county’s position was that such agreements were matters between the slip tenant and lessees or sublessee and that the county normally could not intervene.
The commission stated, however, that the matter would be investigated and discussed with the county counsel as soon as possible.
Unlike its reaction to the John and Willie Hjorth case, the Pioneer Skippers became involved in this dispute. Many members expressed concern that the future of all boat owners was at stake because eviction without cause was allowed in the proposed agreement.
Ponty-Fenmore expressed a willingness to talk, and issued a statement saying that no one would be evicted pending a revised rental agreement that would try to take objections of slip tenants into account.
The revised rental agreement, issued after conversations with a Pioneer Skippers representative, proved no more acceptable than the previous draft.
The lessee was willing to allow Feldman and all other live-aboards to occupy their slips if they would sign a new agreement and meet all rules and regulations of the moorage and the county.
Because of the absence of any guarantee of his status and his objections to other parts of the agreement, Feldman refused.
The Pioneer Skippers next presented the county with a proposed Marina-wide slip rental agreement. The lease and finance administrator of the department asked the Skippers to prepare an analysis of its objections to the Ponty-Fenmore agreement.
The Skippers countered at the February 1972 meeting of the commission with a request that the county undertake a study of all rental agreements in use at the Marina.
The county agreed to proceed with the review without taking a position on the merits of the controversy. The matter received increasing attention from the boaters’ organization during the spring without any progress toward settlement of the issue.
In late spring, Feldman was given until May 30th, 1972 to sign or be evicted. Having failed to act, Ponty-Fenmore notified him on May 31st that he was no longer a legal occupant of his slip.
At this point, a number of Marina del Rey boaters, including Feldman, filed charges with the Internal Revenue Service alleging that the recent slip rate increases, the new rental agreements, and lowered levels of service throughout the Marina constituted a violation of the national price controls that were then in effect.
This proved unsuccessful. Concurrently, the president of the Pioneer Skippers attempted to carry on negotiations with the Lessees Association concerning the adoption of a Marina-wide slip rental agreement. Little came of this as well.
The county, under the terms and conditions of the standard lease from between the county and the lessees, had no legal responsibility for slip agreements, but the director of the Department of Small Craft Harbors noted that this did not prevent the county from exercising a moral responsibility for equity in the conflicts between lessees and boaters over slip rental agreements.
The Feldman case provided an immediate test for the moral suasion of the county. Feldman and another boater, Stanley Levine, signed rental agreements in July 1972 but were still in the process of being evicted.
Feldman’s attorney requested that the Department of Small Craft Harbors director intervene on the boaters’ behalf because they were being evicted without specific cause.
The director wrote to Ponty-Fenmore asking that the matter be reconsidered but the latter declined to do so.
Feldman and Levine went to court in August 1972 to contest unlawful detainer proceedings. Their attorney entered a demurrer stating that because the Marina was a public facility owned by the county, a landlord must prove legal cause before eviction could take place.
The two boaters also tried to gain public support for their case and organized a “Sail-In” on August 20th, 1972 to present a petition signed by 1,111 boat owners and users of Marina del Rey.
The petition asked the county to “�reconsider its decision not to intervene in unjustifiable evictions at Marina del Rey anchorages.”
Only 40 boats participated in the event, but a Pioneer Skipper spokesperson commented that many boat owners refused to join in the protest for fear of being evicted. At the time of the writing, Supervisor James Hayes’ office had not yet acted upon the petition.
[The Board of Supervisors at the time consisted of Hayes, Peter Schabarum, Warren Dorn, Ernest Debs and Kenneth Hahn] Hayes was appointed by the governor to replace Supervisor Burton W. Chace, who died in a car accident August 22nd, 1972 on his way to a Board of Supervisors meeting.
Legally, the boaters were unsuccessful with their case in the Culver City Municipal Court and with an appeal to the Appellate Department of the Los Angeles County Superior Court.
In August 1973, the latter body affirmed the lower court’s findings that landlords do not have to allege the reason for evicting tenants under California law.
Note: The Marina del Rey Historical Society is compiling memorabilia for its collection. If you have photos, documents or any special memory of the Marina you would like to share, please contact the society at (310) 578-1001, or mdrhistory@verizon.net/.
Looking back at how the Marina was created: Part VIII
http://www.argonautnewspaper.com/articles/2010/05/20/columns/helga_gendell/hg.txt
BY HELGA GENDELL
(Created: Wednesday, May 19, 2010 3:46 PM PDT)
Part VIII of the Marina del Rey history deals with the number of developments that were already built in the Marina prior to 1975, and a “do-it-yourself” boat yard where the county and local boaters worked together to facilitate the project.
Detailed information regarding parcel development is from the Web site of the Los Angeles County Department of Beaches and Harbors. A parcel map is also available on the department Web site by clicking on “Communications Strategy” at
http://beaches.co.la.co.us/BandH/Main.htm/.
By 1975, approximately 40 developments were already in place in Marina del Rey including:
Fisherman’s Village (1964);
Marina Fuels, Bora Bora Way (1962);
Shanghai Red’s Restaurant (formerly Pieces of Eight — 1962);
Bay Club Marina, Tahiti Way (1962 — boat slips);
Villa del Mar Apartments and Marina, Marquesas Way (1963 — boat slips);
UCLA Aquatic Center, Fiji Way (1963);
Marina del Rey Hotel and Anchorage, Bali Way (1963 — boat slips/hotel rooms);
Villa Venetia, Fiji Way (1964);
Tahiti Marina, Tahiti Way (1964 — boat slips);
Neptune Marina, Marquesas Way (1964 — boat slips);
Del Rey Yacht Club, Palawan Way (1964);
The Boat Yard, Fiji Way (1964);
Catalina Yacht Anchorage, Bali Way (1964);
U.S. Coast Guard facility, Fiji Way (1964);
Pier 44, Admiralty Way (1965 — boat slips/retail);
Windward Yacht Center, Fiji Way (1965);
Tony P’s Dockside Grill, Admiralty Way (1965);
Del Rey Shores/Del Rey Shores North, Via Marina (1965);
Marina Waterside, Admiralty Way (1965);
California Yacht Club, Admiralty Way (1966);
Commodore Club, Admiralty Way (1966);
Foghorn Hotel and Cheesecake Factory, Via Marina (1966);
Best Western Jamaica Bay Inn, Via Marina (1966);
Mariners Bay, Palawan Way (1966 — boat slips);
Dolphin Marina, Panay Way (1967 — boat slips);
The Waterfront, southeast corner Admiralty Way and Palawan Way (1967);
Holiday Harbor Marina, Panay Way (1968);
Marina Professional Building, Admiralty Way (1969);
Warehouse Restaurant, Admiralty Way (1969);
Del Rey (P. 77), Mindanao Way (1969);
Café del Rey, Admiralty Way (1969);
Oakwood Garden Apartments, Via Marina (1970);
Marina Beach Shopping Center, Washington Boulevard (1970);
Marina West Shopping Center, Washington Boulevard (1970);
Marina City Club, Admiralty Way (1971);
Mariners Village, Via Marina (1971);
Trizec Hahn Towers, Admiralty Way (1971);
Marina International Hotel, Admiralty Way (1973);
Los Angeles County Fire Station, Admiralty Way (1973); and
Archstone Marina del Rey, Via Marina (1975).
The following information is cited from “The Urban Marina: Managing and Developing Marina del Rey,” by Marsha V. Rood and Robert Warren.
A different relationship existed among the county, the boaters and the relevant lessees over the issue of providing a “do-it-yourself” boat yard in the Marina. The matter was resolved differently as well.
When Chris Craft phased out its “do-it-yourself” service area in the late 1960s, it closed down the only such facility in the Marina. Boaters who were interested in making their own repairs were forced to go either to the Long Beach-San Pedro area or have the work done professionally in one of the two Marina yards for a higher cost.
It was much more than an economic question, however. To many, being able to putter around and repair their own craft was an important part of owning a boat. One boater expressed these feelings by letter to Los Angeles County Supervisor Burton Chace in July 1971.
The official reply was that, although the county could not require either of the two existing boat yards in the Marina to have do-it-yourself areas, the department was reviewing the possibility of making such a service available itself, providing that it could be done on a sound legal and financial basis.
Since the one parcel designated for boat repairs was not yet leased, the county could solicit bids for the necessary facility. Failing to find a lessee, the county itself could construct and manage the self-service yard.
As concern over the problem increased, a group of boaters requested that the county provide a do-it-yourself yard on the available parcel. The Small Craft Harbor Commission responded in February 1972 by recommending that the department staff make a review of all the problems involved in leasing the parcel for such a purpose.
A representative of the Association of Santa Monica Bay Yacht Clubs also volunteered to investigate the feasibility of the proposed yard and to try to create bidder interest in the leasehold.
At this point, the Pioneer Skippers also became actively involved in providing evidence to support the economic feasibility of such an operation.
The skippers group distributed 4,000 questionnaires to its members and other boaters throughout the Marina that asked for information concerning spending patterns for boat repairs and interest in a self-service yard.
Because the rate of return was low (264), the responses seemed to be better indicators of an interest in such a facility than of its economic feasibility. Even so, the skippers report on the survey in March 1972 added momentum to the campaign.
At its April meeting, the commission discussed the feasibility of the county’s developing a yard with minimum improvements and perhaps leasing it out on a short-term basis.
Accordingly, specifications for a county yard were drafted for the commission by the department and distributed to the Pioneer Skippers, individual boat owners, potential bidders, and other concerned parties for their review and comment.
The commission then adopted preliminary specifications for bidding on a three-acre yard at its May 1972 meeting. The director of the department advised the commission that if no qualified bidder were found, the county had the option of building the facility itself.
Once it became evident that the county might develop the service, a significant change occurred in the position of the two boat yards in the Marina, Chris Craft and Windward Yacht. Assessing the implications of competing against a county-operated do-it-yourself yard with lower rates, the two lessees submitted a proposal to jointly develop a self-service area at the June 1972 meeting of the commission.
The department’s staff made a detailed evaluation of the offer for conformity with all county requirements. The director then recommended approval with the stipulation of a six-month trial period.
Gruen Associates, consultants to the Marina, also responded favorably to the proposal, as did representatives of the Pioneer Skippers. On this basis, the county approved the joint undertaking.
The “do-it-yourself” case offers an example of the direction policymaking for the Marina can move. There was direct and productive participation by the county and several interested groups in resolving the question.
The county exercised some degree of initiative in meeting a need not met by the private sector. Lessees, when faced with the possibility of competing with a self-service yard (due to the power and willingness of the county to take unilateral action), were able to reach an accommodation with boaters for a needed service, at least for a trial period.
In two of the three cases discussed [the others were the John and Willie Hjorth and Robert Feldman cases], there appears to be greater flexibility in the county management system to respond to a wider range of interests than was the case during most of the 1960s.
It is also clear that the policies and operating rules established to ensure the financial solvency of the Marina still exercise a powerful influence over the options that are available for dealing with newer issues.
A key to the future resolution of such controversies may be to improve the Marina management’s ability to anticipate and meet social and environmental problems, and to represent a wider range of interests.
Note: The Marina del Rey Historical Society is compiling memorabilia for its collection. If you have photos, documents or any special memory of the Marina you would like to share, please contact the society at (310) 578-1001, or mdrhistory@verizon.net/.
cho:
Looking back at how the Marina was created: Part IX
http://www.argonautnewspaper.com/articles/2010/05/28/columns/helga_gendell/hg.txt
BY HELGA GENDELL
(Created: Wednesday, May 26, 2010 3:26 PM PDT)
Part IX of the Marina del Rey history addresses a former Los Angeles County supervisor’s allegations of corruption and the business dealings of a major Marina del Rey lessee.
A September 4th, 1980 article in The Argonaut by its founder and owner, David Asper Johnson, noted an allegation of corruption by Los Angeles County Supervisor Yvonne B. Burke as she campaigned against Deane Dana for the Fourth District supervisorial seat that includes Marina del Rey.
Johnson’s article reported the following:
“In her strongest Marina campaigning yet, Supervisor Yvonne Burke last week charged that the election of her November opponent, Deane Dana, would lead to ‘corruption of the Board of Supervisors by developers.’”
“Burke made the strong charges as she addressed the Marina Tenants Association.
“‘There are some very important decisions that will be made in the coming year that will affect Marina del Rey, and they are very important,’” Burke warned, suggesting that if Dana is elected he will vote against the interests of Marina apartment and boat slip tenants.
“Many of the tenants had come to complain to Burke about rent increases in the Marina and Burke spent most of her time at the session trying to explain the county’s rent control ordinances and why Marina apartment tenants have experienced recent rent increases as high as 17 percent.”
In Johnson’s article, he stated that Burke told the audience that when the rent control ordinance was extended, an allowable rent increase brought a double rent increase in some cases, and she said the rent control ordinance was only extended for three months.
“Burke continually reminded the Marina tenants that Dana supported Proposition 10, the defeated initiative which would have shifted rent control ordinances from the local to state level.
“‘At the time (the supervisors considered the county rent control ordinance), there was Proposition 10 on the ballot and if our rent ordinance was not in effect, we would have been required to immediately have an election (if Proposition 10 had passed),’” said Burke.
“Burke said she opposes a recent county grand jury suggestion that the county sell all or part of its assets in the Marina. She warned the grand jury issue ‘goes to the very heart of the Marina.’
“‘Is the Marina a recreational resource or is it a business resource,” Burke asked, suggesting that she sees the Marina as a ‘recreational resource while Dana would view the Marina as a business source.’
“Burke acknowledged that the Marina ‘is the biggest profit-making enterprise that the County of Los Angeles has.’”
“Burke told the Marina tenants she had fought to keep Marina Fund monies in the Marina, rather than support recent action by other supervisors who sought to divert the Marina Fund revenues into the county’s general fund.”
“The supervisor said, ‘In the past, monies that were reserved from the Marina were held in the Marina. We are now at the point where the bonds are almost paid off. Now we are at the point where some feel we should use all the funds except those absolutely necessary for the maintenance of the Marina.’”
Johnson wrote that Burke had emphasized that Marina funds should be used to ensure that the whole Marina area is maintained, but that she admitted, “I lost on that,” and that other supervisors succeeded in tapping into the Marina Fund.
Jeffrey Rabin, a Los Angeles Times reporter, wrote on February 28th, 1991, “Yvonne B. Burke angered Marina leaseholders by seeking to defend price controls then in effect on apartments and boat slips. Marina leaseholders, determined to defeat her, contributed to Dana’s successful supervisorial campaign in 1980.”
MARINA LESSEE ABRAHAM M. LURIE —
On November 13th, 1989, Rabin wrote his second part of a three-part series, “The Ties Are Cozy,” about Marina development and the county.
Rabin listed Lurie’s marina holdings in the article: Marina Plaza Hotel site; Marina International Hotel; Marina Beach Hotel; Marina del Rey Hotel; Admiralty Apartments; Islander Marina Apartments; Fisherman’s Village; Pier 44; Marina West; and Marina Beach Shopping Center.
Rabin’s article on Lurie reported the following:
“He is the biggest developer in Marina del Rey, owner of hotels, apartment houses, offices, restaurants, shops and boat slips. Yet when Lurie became delinquent on nearly $1 million in property taxes last year, the Los Angeles County Department of Beaches and Harbors, which oversees the Marina, claims it knew nothing about it.”
“Months after private lenders declared him in default on more than $1 million in loans secured by his county leases, the Department of Beaches and Harbors professed to know nothing about it.
“And when Lurie needed the department’s approval to sell nearly half of his holdings to mystery foreign investors in order to save himself from financial ruin, the agency made no effort to find out who they were.
“For Los Angeles County, the risk of ignorance was substantial. A financial collapse of Lurie’s operation could have depressed county revenues and real estate values throughout the Marina. But Department of Beaches and Harbors Deputy Director Chris Klinger conceded, ‘I had never been aware he was having those sorts of problems.’”
“His boss, Director Ted Reed, blamed the department’s ignorance of Lurie’s tax delinquency on ‘a hole in the system.’
“Lurie’s problems surfaced when the Los Angeles Times sought to determine the identities of his secret foreign partners in a transaction approved in August by the Board of Supervisors.
“Lurie won county approval to sell a 49.9 percent interest in his Marina holdings to a secret group of foreign investors.
“In an article Sunday, The Times reported that the Marina’s new leaseholders are members of a Middle Eastern investment group headed by billionaire Saudi Arabian businessmen and arms brokers Khalid and Abdul Aziz Al-Ibrahim, brothers-in-law of King Fahd.
“At the time, supervisors ignored the advice of private and public counsel to obtain the identities of new leaseholders and instead accepted assurances from the investor’s attorneys and accountants that their clients were not involved in any criminal activities,” the article continued.
“The county’s acquiescence in the secrecy was also criticized on grounds that the public has a right to know the identities of those who operate and profit from use of public property.
“But the inquiry also shed new light on how the county manages the Marina and the long and often cozy relationship between the county and Lurie, a major campaign contributor to the supervisors.”
“The mammoth Marina del Rey project began in the early 1960s, conceived as a novel partnership between the government and private enterprise that would give taxpayers a share of the profits. For some of the early investors, profits were elusive.
“Lurie acquired his first Marina properties in 1968 by taking over the foreclosed leaseholds of some of those pioneer investors. Eventually, he became the largest leaseholder in the Marina, developing his new waterfront properties with hotels, restaurants, shops, boat slips and tourist facilities
“Through the years, he has earned a reputation as a hard-nosed businessman and a tough negotiator with political connections. His donations of nearly $200,000 since 1984 to political figures made Lurie one of the top campaign contributors in Los Angeles County,” the article reported.
“Lurie’s campaign contributions have spanned the political spectrum from conservative Republicans to liberal Democrats, from GOP Governor George Deukmejian to Assembly Speaker Willie Brown. He also has contributed to each of the five members of the Los Angeles County Board of Supervisors.
“Once, when the California Coastal Commission tried to force Lurie to include low-cost roomS for the poor in his new luxury hotels as a condition for approving construction, the combative developer drummed up special interest legislation seeking to establish that his waterfront property was not in the coastal zone. The bill never passed, but he won a compromise,” the article said.
“Lurie’s relationship with Los Angeles County government has been considerably more cozy. For more than 15 years, the county has waited patiently for Lurie to build a nine-story hotel, to be called the Marina Plaza, on one of his leased parcels. In addition to property tax, the county stands to earn a percentage of the profits generated by the hotel. It was one of the hotels delayed by Lurie’s long-running battle with the coastal agency.”
In March 1983, the supervisors voted to extend Lurie’s long-term lease on the site if he would proceed with “the prompt improvement of the premises” by building the long delayed hotel.
“However, the lease extension was to be canceled if Lurie was unable to begin construction by the time his Coastal Commission development permit expired on December 8th, 1983. By mutual consent that date was extended for another year. Lurie contends that the installation of some underground pilings satisfied the lease terms, but the land is still vacant today, five years after the last deadline.
“According to county tax rolls, the land is valued at $4.4 million, although private investors estimate its market value to be several times greater. Yet for the last six years, Lurie has paid the county only $1,001 per month in rent to preserve his development rights to the prized site,” the Times article reported.
“An additional $10,100 a month is deferred and is not due until 15 years after Lurie gets a construction loan for the hotel. Lurie owes the county more than $880,000 in deferred rent and interest.”
“Department of Beaches and Harbors’ Klinger acknowledges that the hotel site is ‘a very, very valuable piece of property’ and is not generating the kind of revenue it should be, and he called the minimal rent Lurie pays for the property as ‘the greatest deal in the marina.’”
“Director Reed is more blunt: ‘There is no doubt that parcel is the source of great embarrassment to all of us, he said. We have not been able to accomplish what was expected.’” reported Rabin.
Reed also stated that the county’s lawyers believe Lurie’s initial work on the property was enough to preserve his claim to the hotel site,
“Ironically, the seeds of Lurie’s financial troubles were sown when he built another hotel, the high-rise Marina Beach Hotel. It has lost money since it opened in 1986. Lurie blames himself for not allying with a major hotel chain.”
It was at this point that Lurie “turned to a group of real estate brokers for help in finding a financial partnership to bail him out. After months of private negotiations, he asked the county last fall to approve a $160-million loan from the secret investors via the Paris-based Banque Indosuez.”
“By that time, Lurie’s financial troubles had become widely known in private business circles. ‘Everybody knew Abe was having trouble,’ said one Lurie competitor, who asked not to be identified.
“But county officials insisted they had no idea that Lurie was in a precarious financial condition. They did know, however, that the Marina Beach Hotel was not living up to profit expectations and Lurie had a $5.5 million balloon payment coming due,” wrote Rabin.
Information about Lurie’s business dealings will continue in the Thursday, June 3rd issue of The Argonaut.
Note: The Marina del Rey Historical Society is compiling memorabilia for its collection. If you have photos, documents or any special memory of the Marina you would like to share, please contact the society at (310) 578-1001, or mdrhistory@verizon.net/.
Looking back at how the Marina was created: Part X
http://www.argonautnewspaper.com/articles/2010/06/03/columns/helga_gendell/h.txt
BY HELGA GENDELL
(Created: Wednesday, June 2, 2010 4:14 PM PDT)
Part X of the Marina del Rey history continues the story about Marina lessee Abraham M. Lurie and provides background on the issue of boat slip fee increases driving boaters away from Marina del Rey.
Two years prior to Los Angeles Times reporter Jeffrey Rabin’s article about Lurie’s financial problems, Times reporter Barbara Baird wrote an article, “Fee Increases Drive Boaters Away From Marina del Rey, Group Says,” on May 17th, 1987. The article stated, “Recent boat slip fee increases have forced many boaters out of Marina del Rey and have produced higher vacancy rates among the more expensive slips, boat owners told the county Small Craft Harbor Commission last week.”
The following is cited from Baird’s report:
“Boat owners and county officials have been at odds since January when the county lifted price controls on boat slip fees and anchorage operators were allowed to increase fees to rates the county found to be comparable with other nearby anchorages.
“The marina’s highest vacancy rate on May 1st was at Aggie-Cal anchorage, which has the highest slip fees in the Marina with prices ranging up to $12 a foot, according to statistician and boat owner Gerald Winston, who prepared the Pioneer Skippers’ report to the commission.
“The May 1st vacancy rate among 103 slips at Aggie-Cal was 11.5 percent, Winston said.
“By contrast, he said, four anchorages with Marina del Rey’s lowest fees, averaging $7.77 a foot, had virtually no vacancies. An average vacancy of less than one-fifth of one percent was found among 653 slips in the Holiday, Catalina, Tradewinds and Santa Monica Yacht Club anchorages,” he said.
“Commissioners said boat slip vacancies probably will force landlords to decrease prices, but boat owners said that concessions will come too late for those who have already had to move out.
“Commission chairman David Boran said the economic principle of supply and demand will come into play in determining prices. Commissioner Herbert J. Strickstein said some boat owners who moved out as a protest against recent fee increases may cool off and return to Marina del Rey.”
[Note: Boran was a resident of Orange County at the time and it was determined that he couldn’t serve on the commission because appointees were required to be Los Angeles County residents.]
“When the commissioners decided to defer action, boat owner Winston retorted, ‘It’s like telling a person who is being strangled that he should just wait a while for relief.’”
“Members of Pioneer Skippers repeatedly have questioned the county’s January survey, which found rates at Marina del Rey to be comparable because they fall within the range of rates charged at other Southern California marinas within a 60-mile radius.
“Pioneer Skippers’ criticisms prompted the county to authorize an independent review of the January survey by an outside consultant, Kenneth Leventhal & Company of Century City.
“The study by the certified public accounting firm found that prices range between $5 and $13.53 a foot at 31 Southern California anchorages, compared to the county survey showing a price range of $6 and $13.98 a foot at 25 anchorages. The county is reviewing differences between the two surveys, staff members told the commission.
“Meanwhile, Ted Reed, director of the Department of Beaches and Harbors, announced that he had obtained agreement among Marina del Rey’s anchorage operators to limit the frequency of boat slip fee increases to once a year.
“All of the Marina’s anchorages have instituted price increases since price controls were lifted January 1st, and now that these new rates are in place, boat slip fees are expected to remain stable for the rest of the year, Reed told the commission.
“In response to requests by Pioneer Skippers, the department had agreed to provide monthly updates on boat slip fees and vacancy rates among the Marina’s 5,265 boat slips. The vacancy rate among slips marina-wide on May 1st was 3.3 percent, the department reported.”
MARINA LESSEE LURIE —
Rabin’s article in Part Two of his three-part series, “The Ties Are Cozy,” dated November 13th, 1989, about Marina development and the county, continues in Part X of the Argonaut’s Marina history series. Part IX finished with Rabin’s report that “Lurie’s financial problems had been disclosed, and he had a $5.5 million balloon payment coming due.
“‘We knew that he was going to have some big problems come this year,’” said Beaches and Harbors Director Ted Reed.
“Lurie’s financial health was of substantial importance to the county. His lease payments exceeded $3.3 million last year — nearly 20 percent of the annual revenue produced for the county treasury by Marina del Rey — and his property taxes added $1 million more annually.
“A Lurie bankruptcy would have disrupted the county’s income, at least for a time.
“Unlike most of the funds that the county had at its disposal, the $16.4 million generated from Marina del Rey leases enters the county treasury without any strings attached. These funds can be dispensed at the discretion of the Board of Supervisors.
“In addition to any revenue loss to the county, private real estate consultants say that the ripple effect of a financial failure of the magnitude of Lurie’s operations could have depressed commercial and residential real estate values throughout the Marina.
“In December, he failed to make property tax payments on most of his Marina properties. Failure to pay the county taxes can be grounds for default, the first step in revoking the lease. But such drastic action is not taken immediately.
“In February and March, private lenders recorded default notices against Lurie’s Marina International Properties, Ltd. for missing more than $1 million in loan payments.
“To make matters worse, the Banque Indosuez loan deal fell apart in March. Unidentified foreign investors were concerned that the loan arrangement would not protect them from federal and local taxes. They began restructuring the deal as a partnership.
[The unidentified foreign investors were mentioned in Part IX. They were members of a Middle Eastern investment group headed by billionaire Saudi Arabian businessmen and arms brokers Khalid and Abdul Aziz Al-Ibrahim, brothers-in-law of King Fahd].
“The second installment of Lurie’s property taxes went unpaid in April. Documents obtained under the California Public Records Act show that Lurie told county officials in June that Marina International Properties ‘had an immediate need for cash.’”
“County officials responsible for the Marina said, however, they did not know of Lurie’s loan defaults or failure to pay property taxes until a Times reporter asked about them last month,” wrote Rabin.
“‘You’re telling me for the very first time,’ said Beaches and Harbors Deputy Director Chris Klinger. ‘We have not been informed.’”
“Reed, calling it a ‘hole in the system,’ blamed the county tax collector’s office for failing to notify his department that Lurie was late on his taxes. ‘We should be notified so we can take appropriate action,’” he said.
Rabin’s article continues: “Associates and competitors alike knew Lurie was in trouble, even if the county did not. A rival said Lurie was ‘hemorrhaging cash’ and a former associate said, ‘He was in desperate shape. He was squeezed cash-wise�I think it’s fair to say Mr. Lurie would have been in very serious financial trouble, if not bankruptcy, if this transaction had not occurred.’”
“Lurie agreed to take on the secret group of foreign investors as partners in exchange for an immediate cash infusion of $5.5 million. He would receive another $16.3 million once the supervisors approved the deal making the unidentified financiers general partners in Lurie’s Marina properties.
“With county approval vital, Lurie mounted a lobbying campaign with the Board of Supervisors. He knew all of the members and had made political contributions to each one.
“Lurie told the Times he didn’t believe he got any special treatment from the county, complaining ‘We don’t get the kind of action from any board member that we should,’ given the economic importance of the Marina to the county.
“As the deadline for county approval neared, Lurie settled issues that might become obstacles. In June, after years of disagreement over rental rates, county officials and Lurie reached an accord. Lurie agreed to drop a lawsuit challenging the county’s ability to regulate Marina rents.
The county agreed to let him take 18 months to repay more than $883,000 in past-due rent, some dating back eight years — assessing a below-market interest rate of only 4.5 percent.
“Lurie paid off his delinquent property taxes and penalties of $904,418 on July 5th (but left $49,404 unpaid on the vacant hotel site for two more months). With the decks cleared, Lurie prepared for the supervisors’ vote,” Rabin wrote.
“A confident Lurie told his business associates that he expected no trouble gaining approval of his partnership with the secret foreign investors. One associate remembers Lurie saying, ‘We’re going to do down there and make it happen.’”
Rabin wrote, “The $21.8-million transaction awaiting Board of Supervisors approval was designed — according to notes of private business meetings obtained by the Times from Lurie associates — to shield the investors from taxes and to protect their privacy through the use of a dozen newly formed shell corporations in the US, the Cayman Islands and Luxembourg.”
“The sale of 49.9 percent of Lurie’s interest stopped just short of the 50 percent level that would have activated reassessment of all his Marina property and increased its value for property tax purposes by more than $100 million.
“Lurie said one of the reasons for choosing the Luxembourg company was confidentiality. ‘The way this is structured there is no way of determining who they are.’”
“But the county counsel’s office had advised the Department of Beaches and Harbors a year ago that the county could face potential problems under federal anti-racketeering statutes if ‘tainted money’ was invested in the Marina. The property could be subject to seizure by law enforcement agencies or tied up in civil litigation if illegally obtained funds were used, officials warned.”
Navigation
[0] Message Index
[#] Next page
Go to full version