This time it’s about the 5-year-old lawsuit stopping King Harbor revitalization and costing the city, by most estimates approximately $20 Million.
The short version is that, about a month prior to the March 2017 general election, the Redondo Beach City Council signed an Agreement for Lease of Property and Infrastructure Financing (ALPIF) with Redondo Beach Waterfront LLC (CenterCal Properties). It was to build a harbor mall that wasn’t yet approved by the California Coastal Commission, and was later found to be illegal by the courts. The proposed project did NOT comply with Measure G or our Local Coastal Plan.
The City Council was repeatedly told by the public why the proposed harbor mall was illegal. It was formally appealed by residents asking for it to be rejected. The “builder-centric” City Council majority at the time instead rushed to pave the way for the mall by locking us into 99-year lease agreement with Redondo Beach Waterfont LLC (CenterCal Properties) in the absence of legal approval for the proposed project. The general consensus now, in hindsight, is that they should have waited until after Measure C was passed in the general election. Measure C would have rezoned the area and prevented the horrific mall from meeting the new zoning requirements once the Coastal Commission rejected the original project submitted. The project did not comply with Measure G or our Local Coastal Plan.
We should note that, despite the false claims of CenterCal’s promoters at the time, Measure C was later certified without any changes by the California Coastal Commission. This would be the first and only time in Coastal Commission history for any citizen-written zoning ordinance. While Measure C didn’t apply to this project, the courts did find the CenterCal harbor mall was illegal due to the flawed Environment Impact Report. Additionally, the Coastal Commission found significant problems (termed as “substantial issue”) with the project and were about to deny it. CenterCal then decided to rescind their submission before it was denied. CenterCal never formally presented any smaller or alternative project to the Coastal Commission, despite what many of their apologists have falsely claimed.
Following the March 2017 election and the passage of Measure C, on October 26, 2017, the city terminated the ALPIF agreement after CenterCal defaulted on two provisions. One was a lawsuit CenterCal filed in the wrong court, out of compliance with the terms of the ALPIF lease. The other was that CenterCal refused to pay the now nearly $2 million to reimburse costs the city laid out for environmental consultants, attorneys, and other services related to entitlements, permitting and approvals. The case is still being litigated and won’t go to trial until next year.
As we mentioned in the prior ROW post, this pending lawsuit since 2017 is the reason why nothing can be built in the harbor until it is ruled on by the courts. Thank you again to the termed-out City Council members for not doing their due diligence and creating this unnecessary lawsuit.
By most estimates this careless action has cost the city at least $20 Million Dollars.
- Fun Factory Lease Buy Out – $9 Million Dollar plus interest (estimated at $15 Million Dollars)
The early pay out of the Fun Factory lease was prematurely made to pave way for this illegal mall project that will never be built. Many are also shocked to learn the city made this unnecessary buyout by essentially mortgaging a city street – Harbor Drive. It’s also important to note this vote was taken before Mayor Brand was elected in 2017, and when his predecessor (and friend to CenterCal) Steve Aspel was mayor, who did not veto that 3 – 2 council vote.
- Cost of the Environmental Impact Report (EIR) and other fees per the ALPIF – (Estimated at $2 Million Dollars)
- Payout of lawsuit settlement for one lawsuit (Approximately $800,000 Dollars)
- Millions in legal expenses by the city to defend itself against these lawsuits.
- Millions in lost revenue from sales taxes of businesses operating in the harbor.
- All because a previous, developer-centric council prematurely signed a 99-year lease agreement for an unapproved project and prematurely purchased the Fun Factory lease.
The fact is the harbor revitalization could have been finished years ago if the Council and City Attorney would have listened to resident concerns. We also may have avoided these lawsuits with simple contingency language added to the ALPIF as is found in real estate contracts every day.
In 2017 if our city attorney and council would have added something to the contract such as:
“Should the Coastal Commission not approve the CenterCal project, or the courts find it to be illegal, the ALPIF is terminated and CenterCal agrees to reimburse the city for all costs related to the EIR process”.
We can all thank termed out city council members Laura Emdee and Christian Horvath for this mess! Any statement to the contrary doesn’t make the historical record.
For More Background on this Horrific Tale check out the links below.
The City Council Members and City Attorney who made the lawsuit happen. Link
ALPIF Termination Easy Reader 9/9/2017 Link
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