County officials are acknowledging that the owner of Bar Harbor on Via Marina in Marina del Rey — Doug Ring (Marina Two Holdings, LLC) — is now in breach of the lease for not beginning construction by a specified date for the redevelopment of the parcel.
The comments were made at the Wednesday, July 16th, meeting of the Small Craft Harbor Commission at the Burton Chace Park Community Building in Marina del Rey.
Section 5.5.1 of the Bar Harbor lease states that substantial commencement of construction for the redevelopment work is to occur on or before the anticipated commencement date, reasonably permitting the lessee to substantially complete the redevelopment work by the outside completion date of June 30th, 2009.
Original construction, based on county documentation, was scheduled to begin in January last year.
The lessee is required to give six months notice to all tenants and boat owners at Bar Harbor and the earliest date that substantial construction could begin would be December 28th this year, leaving only six months for substantial completion of the project next June 30th. For the past two months, public speakers have asked if Ring’s company is in breach of his contract, and they were told he was not at that time, but soon would be.
Los Angeles County counsel Tom Faughnan told the commission members that the county is in negotiations with Ring regarding the situation.
Public speakers said that Ring’s failure constitutes an event of default, and that the lease should revert to an expiration date of approximately 2021, opposed to 39 years later.
“If the county can’t stick to lease terms it’s not worth doing business with it,” said one speaker.
“The county is capitulating in attempting to negotiate with Ring when they knew the project was not proceeding in a timely manner, rather than treating him as it would any other individual with a county contract, and that reason is money for the county coffers,” one angry local resident told The Argonaut.
“Bear with us,” Faughnan said. “We are in negotiations with the lessee and it would do a serious disservice to the county if the negotiations were discussed in public.”
Of the confidential negotiations, Faughnan said, “If we have an action that’s reportable to the public, we’ll report it.”
During public comment about the breach of contract and the county’s willingness to negotiate with Ring, Small Craft Harbor Commission chair Russ Lesser said, “If Ring gives the county one million dollars that’s good.”
If there is an agreement on the contract negotiations, it will go to the Los Angeles County Board of Supervisors, but if there is no agreement, the county will pursue other options, said Faughnan.
One speaker said that at a recent Board of Supervisors meeting, one of the supervisors had cited the law and refused to negotiate with a provider of services to the county, but that when it is to the county’s benefit, they are able to overlook contractual requirements.
“After almost five years of unexplained construction delays, the county is giving Doug Ring a multimillion-dollar gift by brushing aside his major lease violations and renegotiating his lease deal,” said local resident David Barish. “Supervisor Don Knabe’s signature is on this lease and he should be held accountable to enforce its strict terms.
“This is just another example of a long-term pattern of unwillingness to enforce lessee lease obligations from maintenance issues to construction deadlines, all to the detriment of the community and for the direct benefit of lessees and/or the county’s desire to rebuild the Marina in their vision.”
“The county isn’t bending over backward for Ring or anyone else,” said Los Angeles County Supervisor Don Knabe, whose District includes Marina del Rey.
“The project is quite an investment and all the issues need to be evaluated. It is the Department’s (Beaches and Harbors) job to provide recommendations based on all the facts in the best interest of the county and the taxpayers.”
The Bar Harbor redevelopment (Esprit II) — Ring’s company is also the owner of the Esprit I development that recently opened — is at 4242 Via Marina in C Basin and is scheduled to be redeveloped into a 538-unit apartment complex with a new 241-slip marina and include 8,000 square feet of new retail space.