New county lease plan looms for Marina del Rey.The Los Angeles County Board of Supervisors The Los Angeles County Board of Supervisors is the five member governing board of Los Angeles County, California. Members of the board of supervisors are elected by district, the current members as of April 2006 are:
The vote is considered important because Marina del Rey, the county's only profit center, generates more than $25 million in annual revenues for the county. And those marina revenues have become increasingly precious in these recessionary times, as the county's other sources of revenue flatten flatten - To remove structural information, especially to filter something with an implicit tree structure into a simple sequence of leaves; also tends to imply mapping to flat ASCII. "This code flattens an expression with parentheses into an equivalent canonical form." and fall, and demand for county services skyrockets. The county, which instituted an indefinite across-the-board hiring freeze Noun 1. hiring freeze - a freeze on hiring freeze - fixing (of prices or wages etc) at a particular level; "a freeze on hiring" in March, hopes to significantly increase its Marina del Rey ground-lease revenues over the next few years by renegotiating and extending all or most of its 56 ground leases there. The first such lease extension -- more than two years in the making -- is up for final approval Tuesday, April 14. It calls for the 60-year ground lease entered into with developer Jona Goldrich in 1963 to be extended to 99 years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time maximum term allowed by law. That would translate to a 39-year extension to the 30 years Goldrich has left on his original lease. Nearly all the county's Marina del Rey ground leases were originally signed in the 1960s for 60-year terms. Marina lessees now stand to benefit from getting those original ground leases extended because the lease terms are falling well below the crucial 40-year mark. Lenders typically will not finance any renovation or new-construction projects situated on leased land if the term remaining on the ground lease is under 40 years. Terms of less than 40 years would not allow adequate time for a lender to find a party willing to assume the ground lease if the original ground-lease holder defaulted, sources explained. County officials and some marina lessees want to bring ground-lease terms back to well beyond the 40-year mark so that lessees can get loans to upgrade their properties. Almost all of the marina-area shopping centers shopping center, a concentration of retail, service, and entertainment enterprises designed to serve the surrounding region. The modern shopping center differs from its antecedents—bazaars and marketplaces—in that the shops are usually amalgamated into , restaurants, apartments, boat slips and other improvements were constructed in the 1960s. Many of those structures are now outdated and in need of renovation. New construction is also needed if Marina del Rey hopes to stay competitive with Channel Gateway, Playa playa or pan or flat or dry lake Flat-bottomed depression that is periodically covered by water. Playas occur in interior desert basins and adjacent to coasts in arid and semiarid regions. Vista and several other huge mixed-use projects being developed nearby, sources pointed out. Goldrich currently owns 204 apartment units, 462 boat slips and a restaurant on his county-owned marina property. Those facilities generate annual revenues of nearly $6 million for Goldrich. And he, in turn, pays the county annual ground-lease payments of almost $1 million. Under the proposed deal, Goldrich would be required to make several additional commitments to his marina facilities in exchange for getting a 39-year extension to his existing ground lease. County officials estimate the renegotiated lease would yield the county $41 million in additional revenues over the next 30 years, compared with the amount the county would have received if Goldrich's original lease were allowed to run to expiration. During the final 39 years of Goldrich's lease, the county would receive $325 million in payments from Goldrich, county officials estimate. Those higher extractions are justified, county officials said, because the original lease terms of 30 years ago did not envision Marina del Rey's eventual popularity. "When these leases were written 30 years ago, no one knew if the marina would be a success and no lender had ever financed a (ground) leasehold interest," explained K.C. "Chris" Klinger, deputy director for the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. County Department of Beaches & Harbors. Rent increases (% of gross revenues that Goldrich would pay to county) Term Boat slips Apartments Restaurant 1963 - 1988 20 7.5 3 1988 - present 24.5 10 3.5 April 1992 - April 1995 25 10.5 4.5 May 1995 - June 2004 28 11 4.5 July 2004 - June 2009 30 12 4.5 July 2009 - June 2014 32 12.5 4.5 Source: L.A. County Department of Beaches and Harbors At least one critic insisted the county may not have extracted enough from Goldrich in the proposed precedent-setting lease extension. "This (Marina del Rey) is one of the true jewels of California real estate, and we really ought to be raising some questions about tying it up for 69 years without an independent review," asserted Fred Case, a retired professor of UCLA UCLA University of California at Los Angeles UCLA University Center for Learning Assistance (Illinois State University) UCLA University of Carrollton, TX and Lower Addison, TX Graduate School of Management who has served as adviser on many prominent long-term ground lease negotiations. "I don't think they (county officials) did a very good job of exploring all the options and negotiating the best terms," Case added. "I'd like to see an additional evaluation by an independent panel of people with no other business ties to the marina or the county." County deputy director Klinger insisted the proposed lease extension has been negotiated by an independent panel of prominent real estate professionals, and was recently given a unanimous green light by the Los Angeles County Small Craft Harbor Commission, a citizen advisory body. "This deal was not crafted by a bunch of bungling bun·gle v. bun·gled, bun·gling, bun·gles v.intr. To work or act ineptly or inefficiently. v.tr. To handle badly; botch. See Synonyms at botch. n. bureaucrats who just fell off the turnip turnip, garden vegetable of the same genus of the family Cruciferae (mustard family) as the cabbage; native to Europe, where it has been long cultivated. The two principal kinds are the white (Brassica rapa) and the yellow (B. boat," Klinger said. Case countered that Small Craft Harbor commissioners are not independent because they advise county supervisors on all marina-related matters. Case also argued that the three private-sector real estate pros representing the county in its talks with Goldrich have ties to county-related business deals, as well. Those three private-sector negotiators are: Richard Riordan Richard J. Riordan (born May 1, 1930) is a Republican politician from California, U.S. who served as the California Secretary of Education from 2003–2005 and as Mayor of Los Angeles from 1993–2001. Riordan ran for Governor of California unsuccessfully in 2002. , nameplate partner at the law firm of Riordan & McKinzie; Richard Volpert, senior real estate partner at the law firm of Skadden Arps Slate Meagher & Flom; and Allen Kotin, a prominent economic consultant. Klinger maintained that Riordan, Volpert and Kotin negotiated a "very, very good deal" for the county. "If this is such a sweetheart deal Sweetheart Deal A merger or company sale where one company involved in the deal gives the other very attractive terms and conditions. Notes: In other words, a sweetheart deal is a transaction that a firm simply cannot pass-up. This is usually considered to be unethical. (for Goldrich)," Klinger asked, "why aren't all the other marina lessees waiting in line to have their leases extended? Only three of 56 lessees have come forward to renegotiate re·ne·go·ti·ate tr.v. re·ne·go·ti·at·ed, re·ne·go·ti·at·ing, re·ne·go·ti·ates 1. To negotiate anew. 2. To revise the terms of (a contract) so as to limit or regain excess profits gained by the contractor. their leases. Two of those involve special considerations, and one involves a lessee One who rents real property or Personal Property from another. A lessee of land is a tenant. Cross-references Landlord and Tenant. lessee n. the person renting property under a written lease from the owner (lessor). who has an opportunity to change the use of his property." "The fact that more lessees are not coming forward demonstrates to me that this (proposed Goldrich extension) is a good deal for the county," Klinger concluded. Here are the basic conditions of Goldrich's proposed lease extension: * Goldrich would pay a one-time $3.3 million extension fee. Half would be refundable if Goldrich's annual ground-lease payments to the county increased by 30 percent or more. Those payments are based on a percentage of gross revenues generated by his marina facilities. Hence, lease-payment increases would be brought about by future capital improvements that Goldrich would be required to make. * Renovation of all existing structures. At least $30,000 would be spent on renovating each of Goldrich's 204 apartments, for a total cost of $6.12 million. And renovation of the 462 boat slips would be undertaken at an estimated cost of between $2 million and $6 million. Sixty percent of those renovations would have to be finished within eight years, and the total job would have to be done within 11 years. * Construction of 68 new luxury apartments and a new 75-unit senior congregate-care facility within the next eight years. * Periodic ground-rent escalations, based on an increasing percentage of gross revenues, through the year 2014 (see accompanying table). After 2014, the rent escalations would be renegotiated. * County participation in all sale or refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. proceeds that are not reinvested back into the marina. The county would get 18 percent of any refinance proceeds not reinvested back into the marina. And the county would get 5 percent of any sale proceeds not reinvested in the marina, or 20 percent of the difference between the property's appraised value An appraised value (USA) or mortgage valuation (Australia) pertains to the assessed value of real property in the opinion of a qualified appraiser or valuer. It is usually used as a pre-qualification & risk-based pricing factor related to the issuance of mortgage loans by a and its sale price -- whichever is larger. For example, if Goldrich sold his marina property for $70 million and its appraised value was $50 million, the county would be entitled to get $4 million. Here's how: Five percent of the $70 million sale price is $3.5 million, and 20 percent of the $20 million difference between the appraised value and the sale price is $4 million. Since the county is entitled to the larger of those two amounts, it would receive $4 million. Saudis file reorganization plan A scheme authorized by federal law and promulgated by the president whereby he or she alters the structure of federal agencies to promote government efficiency and economy through a transfer, consolidation, coordination, authorization, or abolition of functions. for Marina firm in bankruptcy The Saudi Arabian investor group that owns a 49.9 percent stake in Marina del Rey's largest property portfolio filed a plan of reorganization for its debt-laden marina partnership with the U.S. Bankruptcy Court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. on April 3. Marina International Properties Ltd. -- which is 50.1 percent owned by Westside developer Abraham Lurie -- filed for Chapter 11 bankruptcy protection last July after the Saudi group unsuccessfully tried to buy out Lurie's majority interest. The troubled partnership owns three hotels, two shopping centers, 268 apartments, 1,150 boat slips and a four-building office complex on county-owned land in Marina del Rey. The Saudi group, called Marina Group of Cos., is the first party to file its reorganization plan. That group is headed by Saudi billionaire Sheikh sheikh or shaykh Among Arabic-speaking tribes, especially Bedouin, the male head of the family, as well as of each successively larger social unit making up the tribal structure. The sheikh is generally assisted by an informal tribal council of male elders. Abdul Aziz Abdul Aziz is the name of:
Lurie and each of Marina International's major creditors are expected to file separate reorganization plans before a scheduled June 2 bankruptcy court hearing. The partnership has more than 2,000 creditors in all. Its largest creditor, Bank of Montreal “BMO” redirects here. For the mathematics competition, see British Mathematical Olympiad. Bank of Montreal/Banque de Montréal (TSX: BMO, NYSE: BMO) is Canada's fourth largest bank[1], and is classified as a Domestic Chartered Bank (Schedule I). , would be hit the hardest if the Saudis' plan is approved. The plan calls for the Bank of Montreal's $54.6 million secured loan on the partnership's Marina Beach The Marina Beach is a beach situated along a 12 km shoreline in the city of Chennai, India along the Bay of Bengal, part of the Indian Ocean. Hotel to be written down to $27.0 million on renegotiated terms. That would mean the Canadian bank would lose more than half its investment. Unity Bank would also be hit hard. It issued a $10.3 million secured loan on two of the partnership's hotels. The Saudis' plan calls for that debt to be written down to $4.0 million on renegotiated terms. Great Western Bank's $20.1 million secured loan would be written down to $18.0 million on renegotiated terms. Four loans totaling $4 million issued by Mitsui Manufacturers Bank would be repaid in full. But the maturities on those loans would be extended by five years, to Dec. 31, 1998. California Federal Bank California Federal Bank, often abbreviated to "Cal Fed", was a savings and loan bank in California. It existed from 1926 until 2002, when its parent company Golden State Bancorp was acquired by Citigroup, resulting in the bank being merged into Citibank. , meanwhile, would fare the best of any secured creditor One who holds some special monetary assurance of payment of a debt owed to him or her, such as a mortgage, collateral, or lien. under the Saudis' plan. Five of the six marina properties on which CalFed is lender now have positive equity in them. "Equity" equals a property's appraised market value minus any debt on it. Only five of Marina International's nine properties currently have any equity, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the Saudi's property appraisals. And CalFed is the lender on all five. Because those five properties have equity, CalFed would be repaid in full for the $29 million it has loaned on those properties. Delinquent interest payments would be brought current, but without any penalties or late fees. Meanwhile, the $22 million secured loan CalFed has on the Islander Marina Hotel would be written down to $19 million under existing loan terms. Unsecured creditors Unsecured Creditor An individual or institution that lends money without obtaining specified assets as collateral. This poses a higher risk to the creditor because they have nothing to fall back on should the borrower default on the loan. A debenture holder is an unsecured creditor. owed $2,500 or less would be repaid 100 cents on the dollar under the Saudis' plan. And unsecured claims of as much as $7,500 could opt for $2,500 in cash in lieu Cash In Lieu (CIL) In a typical exchange offer, "old" shares of the target company are exchanged for "new shares". of waiting in line behind other creditors. The Saudi group also offered to invest an additional $4 million during the next 18 months to fund badly needed repairs on its marina properties. If the Saudis' reorganization plan is approved, the group stated it would immediately seek to negotiate an extension to its existing county ground lease. The county is currently moving forward with a program to renegotiate and extend all 56 of its Marina del Rey ground leases. Once Marina International's county ground lease is successfully extended, the Saudi group stated it would invest another $12 million for capital improvements at the marina. |
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