More than 30 years after the first real estate projects sprouted on county-owned land in Marina del Rey, the area is awash in a new wave of development.
But don't expect the reincarnation to be an updated version of its original character, which largely catered to boaters and swinging singles. The Marina about to emerge will feature sizable projects of virtually every description retail, entertainment, a hotel and apartments.
And they will also funnel millions of additional dollars to county coffers.
"(The Marina) is one of the (county's) premier revenue generators and it will be a substantially larger revenue generator as the asset management strategy unfolds," said Stan Wisniewski, director of the Los Angeles County Department of Beaches and Harbors.
That strategy was approved two years ago as a blueprint for ground-lease extensions and new development. Unlike typical commercial developments, Marina-area projects are being built on county-owned land. Rather than purchase land outright, developers must enter into long-term ground-lease agreements with the county.
Further enhancing, and possibly complicating, redevelopment is the marina's location in the middle of one of Southern California's most active development spots. The massive Playa Vista project is well underway just to the east a project that will add thousands of new housing units to the area as well as the headquarters for DreamWorks SKG.
Among the new investors that have come into the Marina are Golden West Properties and Jade Enterprises, two L.A.-based firms whose joint venture acquired six Marina-area properties from Credit Suisse First Boston for $20 million. Tom Pashaie, a managing partner of Golden West, said there are plans to invest $5 million to $10 million more in upgrades.
"Everything in the Marina is 30 years old. They were wonderful for the '60s and '70s, but not adequate anymore," Pashaie said. "People are used to the Third Street Promenade and CityWalk, high-end entertainment and movies. We need to get popular restaurants and high-end retailers."
Parts of the Marina have indeed deteriorated since its heyday two and three decades ago, when yuppies partied the night away in packed nightclubs and slick high-rise condo towers.
Today, most of those nightclubs are gone, and some of the structures surrounding the Marina are showing signs of age and disrepair. But as the real estate market has emerged from the recession, the groundwork has been laid for a second-generation Marina.
The county is helping lead the process with two "catalytic projects." One is a proposed entertainment-retail development on 20 acres of waterside property at Admiralty and Fiji ways. Competing for that work is Phoenix-based Vestar Development Co. and San Diego-based OliverMcMillan. Both developers are proposing to build shops, galleries, restaurants and a pedestrian promenade. A developer is likely to be chosen next month.
The county plans to solicit proposals later this summer for the other catalytic project.
In addition, the Small Craft Harbor Commission has recommended that Legacy Partners and Woodfin Suites jointly develop a 288-room hotel and public park, and raze 136 existing apartments, replacing them with 529 new ones.
The county is also negotiating to extend the terms of several ground leases to make it easier for developers to secure financing. (Current leases expire in the 2020s.) The longer the lease term, the more comfortable lenders are with financing a project on the site.
As a condition for an extension, the leaseholder must agree to overhaul the property. Indeed, several leaseholders are seeking to renovate or knock down existing, outdated apartment buildings and replace them with new, larger buildings, which could add more than 1,200 units to the area. Doug Ring, a developer and former lobbyist, is proposing a $150 million-to-$200 million project that would more than double his Marina-area apartment units, to 1,100.
The leases are structured so that the county gets a percentage of the gross revenues generated by the business the leaseholder operates on the property. Wisniewski said the new lease terms will be validated by independent appraisals and the county "will get fair market percentage rents.
"We're trying to inject an element of planning into the leasing program to bring about an asset that produces more income for the taxpayers," he said.
Such comments come after years of complaints by activists who feel that the county's supervision of its leaseholders has been less than rigorous. John Rizzo, president of the Marina Tenants Association, has complained of the county "lowballing rents" to leaseholders, many of whom are big contributors to county supervisors.
"Why not sell the Marina rather than giving it away?" Rizzo quipped.
Roger Moliere, lease specialist for the Department of Beaches and Harbors, countered that the county's blueprint is opening up the Marina area to a broader range of people from all over L.A., "so you don't have to own a boat" to have reason to come there.
Not all the activity is confined to county-owned land. To the east in the city of Los Angeles, new housing and retail projects have been popping up recently, and more are underway.
One of the biggest is a $100 million, 224-unit luxury condominium high-rise called Regatta Seaside Residences being developed by Crescent Heights of America Inc.
Next door, Essex Property Trust is building 188 apartments. And on Lincoln Boulevard and Fiji, developer Edward Czuker has entitlements to build 500 apartments, and is proceeding with the first phase of more than 300 luxury apartments.
Nearby, the Lee Group, a residential developer active in the Venice-Marina del Rey area, is in escrow to buy land adjacent to the eastbound arm of the Marina (90) Expressway, where the company plans to build 30 single-family homes.
Lee's project site is across from a right-of-way owned by the California Department of Transportation that will soon be elevated, eliminating the light at Culver Boulevard as the expressway leads into the Marina.
"It will change the whole entrance," said John Wilkinson, a broker at Westmac Commercial Brokerage Co. and one of the most active brokers in the Marina area. "A lot of major projects are coming together."
Wilkinson said he anticipates that the old industrial buildings lining Glencoe Avenue will gradually transition into multi-family, storage and lofts. An offer was recently made on one such building for the asking price of $4 million.
One of the most active buyers in the Marina itself has been the Golden West-Jade joint venture. Among the properties it acquired is Fisherman's Village, a collection of gift shops, delis and restaurants in white-washed wooden buildings, one of which looks like a lighthouse, on Fiji Way.
Pashaie said the plan is to completely rebuild the project and give it an "upscale, new image," with a village-like ambiance, more seating areas, walkways, fountains, landscaping and possibly an amphitheater.
"We thought it would be wonderful to do something creative and rebuild buildings that are tired now," Pashaie said. "We're going to make it a fun place to go to."
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