Board Delays Decision on Marina Plan

Barraged by pointed questions from two of its members, the Los Angeles County Board of Supervisors beat a hasty retreat Tuesday and postponed action for three weeks on a controversial plan that would give a powerful group of Marina del Rey developers control over the recreational harbor well into the next century.

The supervisors agreed to delay a decision until at least April 1 after county Beaches and Harbors Director Stan Wisniewski could not give an acceptable answer to Supervisor Gloria Molina’s repeated questions about why there was such urgency to adopt the plan.

“Other than disappointment,” Wisniewski told the board, “I can’t come up with a specific impact.”

Board Chairman Zev Yaroslavsky, who has not participated in a major decision on the Marina del Rey leases since becoming a supervisor two years ago, clearly had something other than disappointment on his mind.

After reading a Times report Monday that a respected real estate expert had placed the value of the entire marina at $1.4 billion five years ago, Yaroslavsky asked Wisniewski if the department had ever done a full appraisal of what the county’s marina land is worth. He was told the county has never done a complete appraisal.

Yaroslavsky said he was concerned about the valuation of the marina done by Fred Case, a retired UCLA management professor and renowned expert on Southern California real estate.

As part of a yearlong Times investigation of the marina in 1992, Case did a market valuation, a financial study less comprehensive than a formal appraisal, and estimated the marina was worth $1.4 billion.

He concluded that the county ought to be earning $50 million to $75 million a year under the current leases given the value of the underlying property.

Yaroslavsky said the estimate of the marina’s value was a “pretty broad broadside on us.”

But Wisniewski countered that Case’s information was not accurate.

Yaroslavsky, however, questioned how the county can make any decisions on lease extensions without knowing the value of the land it owns. “When you don’t have an appraisal,” he said, “you’re flying by the seat of your pants.”

Allan Kotin, the county’s economic consultant, replied that an appraisal would be “a waste of time” because the land is not vacant and the marina leases encumber or limit the property’s value.

Kotin said he believes the marina is worth between $400 million and $600 million.

And he estimated that the county conservatively would see an average of $2.3 million more per year over the next 30 years if the plan called an “asset management strategy’ is adopted.

Wisniewski promised the supervisors that before they are asked to approve any lease extension deals, they would be provided with data on the market value of that particular property.

Supervisor Yvonne Brathwaite Burke suggested that now is not the time to determine what the marina is worth because the recession has depressed real estate values and the harbor has suffered as a result.

“Fifteen years ago, it was booming,” she said. “Today, it is not booming.”

The proposed strategy would set the stage for marina developers to seek 10- to 20-year extensions on their exclusive long-term leases to develop and operate hotels, apartments, boat slips, shops, restaurants and offices on the county-owned harbor property.

Without any extensions, virtually all of the original 60-year leases on the prime public property will expire between 2020 and 2029.

The vast majority of those leases are concentrated in the hands of a few developers who are major contributors to the campaign war chests of their landlords, the county supervisors. Marina interests have contributed more than $600,000 to the supervisors over the past 10 years.

Wisniewski said adoption of the plan would send “a strong signal not only to the lessees” but to the development community that the county is committed to revitalizing the world’s largest small-craft harbor.

But Molina shot back: “I’m not as interested in the lessees. I’m kind of interested in the taxpayers and the county.”

The outspoken Eastside supervisor, who has long been critical of the county’s management of the marina, questioned why the county earns so little from the valuable waterfront property.

When her colleague, Supervisor Don Knabe, whose district includes the marina, said $24 million a year comes to the county, Molina had a ready response.

Turning to Knabe, she said: “You can look at it that way.” But she added that with “such a huge land holding” and all of the apartments and condos and future opportunities, that “ain’t a whole lot of money any way you look at it.”

Virtually all of the county’s income from the harbor has been devoted to repaying bondholders since the supervisors mortgaged the marina for 15 years to pay one-time operating expenses in 1993.