April 23 City Council Snippets
From Issue: Volume XXI - Number 9
By Steve Propes
Recommendation to execute a sale agreement for 100 Long Beach Blvd. in the amount of $2,100,000.
Director of Business & Property Development Michael Conway stated, “Since March of 2010, staff has struggled to sell City Hall East. The site has been vacant since the police department left in 2005 and cost to maintain the property and to provide 24 hour security has increased to about $14,000 a month. The first RFP advised the property did not support the sale price of $4 million and the deal ended.
In February 2013, the second most responsible bidder Ratkovich Company was selected at $2.1 million. Compensation to the buyer for the vandalism that occurred since the RFPs were received,” said Conway. “The parties negotiated this cost at $40,000 which staff believes to be a very reasonable number.”
Second District Councilwoman Suja Lowenthal said, “the timing for revitalizing this building could not have come at a better time, just this weekend during race weekend, looking at the building and realizing its best days are yet to come. I have a feeling this could be the glue that brings it all together. I want to thank your Mr. City Manager and your staff for keeping this project moving forward. It’s been many years; I think your entire career here.”
Seventh District Councilman James Johnson asked, “what are the advantages of an RFP as opposed to going to the market and getting a broker?”
Conway responded, “with an RFP, staff can better control the development. The market creates the value of the property. We have had a rash of vandalism in the last couple of months, they’ve taken out all the copper cable, so now we have 24 hour security which tends to be quite expensive. Total now is $90 to 100,000 over 12 months.”
Lowenthal asked, “how is that building not secured, are the doors wide open or something?”
Conway answered, “we are somewhat stymied how access is achieved and these thefts have occurred. We haven’t quite been able to figure out why they’ve done that. So we’ve put a guard in there as an alternative.”
Mayor Bob Foster said, “sounds like somebody had a key.”
Larry Goodhue stated, “I didn’t get a chance to talk to Warren Buffet on this, but I was able to reach Homer Simpson. He said, “isn’t this the same paradigm you used when you pawned off an orphaned piece of property saying nobody wanted it and sold it for something like 12 cents an acre and before the ink was dry, the developer turned around and put it on the market for a million.” We have the famed American Hotel property; you gave that piece of property away for zero dollars, a block or two from this piece of property. Everything you’ve done ends up financially disastrous for the city. If it goes through at this price, there will be a federal investigation and they will know every time you change your Jockey shorts. If the economy is fine, why are we giving this property away? Thank you.”
Mayor Foster responded, “Oh you‘re certainly welcome.”
Frank Prior said, “this is basically a give-a-way, this property. I’ll pay for the $40,000 vandalism. I’ll pay the $2.1 million and whatever you think is fair over that. It’s not listed on the state agency, put it in the multiples. Get a broker to handle it. This is the hottest market we’ve seen since seven years ago and that was the hottest in 40 years. Sell the property, let over bidders come in. High bidder gets it, not some closed door deal. That’s part of our tax money that’s being wasted. I’m going out to dinner with the wrong people. Now I got your attention. What are you doing later, Suja?”
Mayor Foster asked, “you did not bid on it, correct?”
Prior answered, “I didn’t know about it. The LLC has not been formed yet so apparently you can’t sell it to them anyway.”
Elliott Lewis stated, “I just found out about the sale as well today. It’s egregious in my opinion. You’re creating a false market. There’s a reason that property is insured for $30 million. A closed door deal doesn’t make any sense to me. Whoever came up with that deal is a joke.”
The motion passed, eight votes yes; Fifth District Councilwoman Gerrie Schipske voted no.