Wednesday, January 8, 2014

Redondo Beach: Town Without Pity

Something is rotten in the state of Redondo politics. The New Future Super Pier Mall Lifestyle Center Living Machine is, evidently, too big to fail. 

Here's what Community Activist Jim Light had to say about the details of the nefarious deal;

Decades of free rent!
  1. Yes, you read it right.  First CenterCal would be free of rent until it gets a certificate of occupancy from the City.  That means they don’t have to pay a dime until they are done building the first phase of their mall.  That means taxpayers are footing all the costs of operating the 15 acres.
  2. From that point until year 20, yep 20 years AFTER the mall is built…  The city doesn’t get one dime until CenterCal makes 10% profit.  They get off scott free for 20 years until they get over 10% profit.  And then they pay 25% of any profit over 10% in rent for 15 acres.  So if CenterCal shows they made 10% profit + $1, they only have to pay $0.25, one piddly quarter, for 12 months rent on 15 waterfront acres. Are you kidding me?
  3. From year 20 on, CenterCal gets a credit for further investment.  So if they invest to improve their business, they get a discount on any rent they may have to pay for the 15 acres of waterfront property.
  4. 31 Years after CenterCal starts running its mall, finally residents and taxpayers are guaranteed at least $1Million in rent.  Excuse me for being underwhelmed..$1M for 15 waterfront acres is a miniscule $5,555 per acre per month.   31 years after the mall opens, the city would get less revenue than the current pier parking lot. Woo-hoo.  Great negotiating.
  5. Finally 55 years (two generations from now) after the mall starts (and ready to be replaced) the city might reduce the rent to 20% of the profit over 10%.
Does anyone really believe CenterCal won’t hide the profit in creative bookkeeping?  Our City was too dumb to set aside harbor funds to replace aging infrastructure for 50 years, do we really think they will be smart enough to evaluate CenterCal’s profitability?
So in summary, if the Council is dumb enough to approve the MOU, the City of Redondo would be:
  • committed to over $25M in investment to support the new mall
  • at risk to get ZERO rent for 15 acres of prime waterfront real estate for 31 yearsafter the Mall-By-The-Sea opens its doors
  •  finally guaranteed a measly $1M in rent per year for 15 waterfront acres after 31 years of mall operation.

What's worst; the International Boardwalk, home of Naja's, Gambrinus, Kegs, Quality Sea Food and the Fun Factory are to be bulldozed to make way for a road. A ROAD!!! Then again these shrewd City Manager rubber stamping developer backed City Council hacks (Bill Brand excluded) might just be practicing the old door in the face technique. A second option will surface which will seem reasonable in comparison. After all, it's pretty easy to put out the fire when you start it...

Build it and they will come
and if they don't
we'll retire on a fat pension 

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