By Helga Gendell

THE SITE OF CHARLIE BROWN’S RESTAURANT, built in 1965, is now Tony P’s Dockside Grill on Admiralty Way in Marina del Rey. The arrows indicate the location of sites not yet built for the Marina City Club, Ritz Carlton, the fire station and Cafe del Rey. (Photo courtesy of Greg Wenger/The Marina del Rey Historical Society)

THE SITE OF CHARLIE BROWN’S RESTAURANT, built in 1965, is now Tony P’s Dockside Grill on Admiralty
Way in Marina del Rey. The arrows indicate the location of sites not yet built for the Marina
City Club, Ritz Carlton, the fire station and Cafe del Rey. (Photo courtesy of Greg Wenger/The Marina del Rey Historical Society)

Part X of the Marina del Rey history continues the story about Marina lessee Abraham M. Lurie and provides background on the issue of boat slip fee increases driving boaters away from Marina del Rey.

Two years prior to Los Angeles Times reporter Jeffrey Rabin’s article about Lurie’s financial problems, Times reporter Barbara Baird wrote an article, “Fee Increases Drive Boaters Away From Marina del Rey, Group Says,” on May 17th, 1987. The article stated, “Recent boat slip fee increases have forced many boaters out of Marina del Rey and have produced higher vacancy rates among the more expensive slips, boat owners told the county Small Craft Harbor Commission last week.”

The following is cited from Baird’s report:

“Boat owners and county officials have been at odds since January when the county lifted price controls on boat slip fees and anchorage operators were allowed to increase fees to rates the county found to be comparable with other nearby anchorages.

“The marina’s highest vacancy rate on May 1st was at Aggie-Cal anchorage, which has the highest slip fees in the Marina with prices ranging up to $12 a foot, according to statistician and boat owner Gerald Winston, who prepared the Pioneer Skippers’ report to the commission.

“The May 1st vacancy rate among 103 slips at Aggie-Cal was 11.5 percent, Winston said.

“By contrast, he said, four anchorages with Marina del Rey’s lowest fees, averaging $7.77 a foot, had virtually no vacancies. An average vacancy of less than one-fifth of one percent was found among 653 slips in the Holiday, Catalina, Tradewinds and Santa Monica Yacht Club anchorages,” he said.

“Commissioners said boat slip vacancies probably will force landlords to decrease prices, but boat owners said that concessions will come too late for those who have already had to move out.

“Commission chairman David Boran said the economic principle of supply and demand will come into play in determining prices. Commissioner Herbert J. Strickstein said some boat owners who moved out as a protest against recent fee increases may cool off and return to Marina del Rey.”

[Note: Boran was a resident of Orange County at the time and it was determined that he couldn’t serve on the commission because appointees were required to be Los Angeles County residents.]

“When the commissioners decided to defer action, boat owner Winston retorted, ‘It’s like telling a person who is being strangled that he should just wait a while for relief.’”

“Members of Pioneer Skippers repeatedly have questioned the county’s January survey, which found rates at Marina del Rey to be comparable because they fall within the range of rates charged at other Southern California marinas within a 60-mile radius.

“Pioneer Skippers’ criticisms prompted the county to authorize an independent review of the January survey by an outside consultant, Kenneth Leventhal & Company of Century City.

“The study by the certified public accounting firm found that prices range between $5 and $13.53 a foot at 31 Southern California anchorages, compared to the county survey showing a price range of $6 and $13.98 a foot at 25 anchorages. The county is reviewing differences between the two surveys, staff members told the commission.

“Meanwhile, Ted Reed, director of the Department of Beaches and Harbors, announced that he had obtained agreement among Marina del Rey’s anchorage operators to limit the frequency of boat slip fee increases to once a year.

“All of the Marina’s anchorages have instituted price increases since price controls were lifted January 1st, and now that these new rates are in place, boat slip fees are expected to remain stable for the rest of the year, Reed told the commission.

“In response to requests by Pioneer Skippers, the department had agreed to provide monthly updates on boat slip fees and vacancy rates among the Marina’s 5,265 boat slips. The vacancy rate among slips marina-wide on May 1st was 3.3 percent, the department reported.”

MARINA LESSEE LURIE —

Rabin’s article in Part Two of his three-part series, “The Ties Are Cozy,” dated November 13th, 1989, about Marina development and the county, continues in Part X of the Argonaut’s Marina history series. Part IX finished with Rabin’s report that “Lurie’s financial problems had been disclosed, and he had a $5.5 million balloon payment coming due.

“‘We knew that he was going to have some big problems come this year,’” said Beaches and Harbors Director Ted Reed.

“Lurie’s financial health was of substantial importance to the county. His lease payments exceeded $3.3 million last year — nearly 20 percent of the annual revenue produced for the county treasury by Marina del Rey — and his property taxes added $1 million more annually.

“A Lurie bankruptcy would have disrupted the county’s income, at least for a time.

“Unlike most of the funds that the county had at its disposal, the $16.4 million generated from Marina del Rey leases enters the county treasury without any strings attached. These funds can be dispensed at the discretion of the Board of Supervisors.

“In addition to any revenue loss to the county, private real estate consultants say that the ripple effect of a financial failure of the magnitude of Lurie’s operations could have depressed commercial and residential real estate values throughout the Marina.

“In December, he failed to make property tax payments on most of his Marina properties. Failure to pay the county taxes can be grounds for default, the first step in revoking the lease. But such drastic action is not taken immediately.

“In February and March, private lenders recorded default notices against Lurie’s Marina International Properties, Ltd. for missing more than $1 million in loan payments.

“To make matters worse, the Banque Indosuez loan deal fell apart in March. Unidentified foreign investors were concerned that the loan arrangement would not protect them from federal and local taxes. They began restructuring the deal as a partnership.

[The unidentified foreign investors were mentioned in Part IX. They were members of a Middle Eastern investment group headed by billionaire Saudi Arabian businessmen and arms brokers Khalid and Abdul Aziz Al-Ibrahim, brothers-in-law of King Fahd].

“The second installment of Lurie’s property taxes went unpaid in April. Documents obtained under the California Public Records Act show that Lurie told county officials in June that Marina International Properties ‘had an immediate need for cash.’”

“County officials responsible for the Marina said, however, they did not know of Lurie’s loan defaults or failure to pay property taxes until a Times reporter asked about them last month,” wrote Rabin.

“‘You’re telling me for the very first time,’ said Beaches and Harbors Deputy Director Chris Klinger. ‘We have not been informed.’”

“Reed, calling it a ‘hole in the system,’ blamed the county tax collector’s office for failing to notify his department that Lurie was late on his taxes. ‘We should be notified so we can take appropriate action,’” he said.

Rabin’s article continues: “Associates and competitors alike knew Lurie was in trouble, even if the county did not. A rival said Lurie was ‘hemorrhaging cash’ and a former associate said, ‘He was in desperate shape. He was squeezed cash-wiseÖI think it’s fair to say Mr. Lurie would have been in very serious financial trouble, if not bankruptcy, if this transaction had not occurred.’”

“Lurie agreed to take on the secret group of foreign investors as partners in exchange for an immediate cash infusion of $5.5 million. He would receive another $16.3 million once the supervisors approved the deal making the unidentified financiers general partners in Lurie’s Marina properties.

“With county approval vital, Lurie mounted a lobbying campaign with the Board of Supervisors. He knew all of the members and had made political contributions to each one.

“Lurie told the Times he didn’t believe he got any special treatment from the county, complaining ‘We don’t get the kind of action from any board member that we should,’ given the economic importance of the Marina to the county.

“As the deadline for county approval neared, Lurie settled issues that might become obstacles. In June, after years of disagreement over rental rates, county officials and Lurie reached an accord. Lurie agreed to drop a lawsuit challenging the county’s ability to regulate Marina rents.

The county agreed to let him take 18 months to repay more than $883,000 in past-due rent, some dating back eight years — assessing a below-market interest rate of only 4.5 percent.

“Lurie paid off his delinquent property taxes and penalties of $904,418 on July 5th (but left $49,404 unpaid on the vacant hotel site for two more months). With the decks cleared, Lurie prepared for the supervisors’ vote,” Rabin wrote.

“A confident Lurie told his business associates that he expected no trouble gaining approval of his partnership with the secret foreign investors. One associate remembers Lurie saying, ‘We’re going to do down there and make it happen.’”

Rabin wrote, “The $21.8-million transaction awaiting Board of Supervisors approval was designed — according to notes of private business meetings obtained by the Times from Lurie associates — to shield the investors from taxes and to protect their privacy through the use of a dozen newly formed shell corporations in the US, the Cayman Islands and Luxembourg.”

“The sale of 49.9 percent of Lurie’s interest stopped just short of the 50 percent level that would have activated reassessment of all his Marina property and increased its value for property tax purposes by more than $100 million.

“Lurie said one of the reasons for choosing the Luxembourg company was confidentiality. ‘The way this is structured there is no way of determining who they are.’”

“But the county counsel’s office had advised the Department of Beaches and Harbors a year ago that the county could face potential problems under federal anti-racketeering statutes if ‘tainted money’ was invested in the Marina. The property could be subject to seizure by law enforcement agencies or tied up in civil litigation if illegally obtained funds were used, officials warned.”

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