By Helga Gendell
Part IX of the Marina del Rey history addresses a former Los Angeles County supervisor’s allegations of corruption and the business dealings of a major Marina del Rey lessee.
A September 4th, 1980 article in The Argonaut by its founder and owner, David Asper Johnson, noted an allegation of corruption by Los Angeles County Supervisor Yvonne B. Burke as she campaigned against Deane Dana for the Fourth District supervisorial seat that includes Marina del Rey.
Johnson’s article reported the following:
“In her strongest Marina campaigning yet, Supervisor Yvonne Burke last week charged that the election of her November opponent, Deane Dana, would lead to ‘corruption of the Board of Supervisors by developers.’”
“Burke made the strong charges as she addressed the Marina Tenants Association.
“‘There are some very important decisions that will be made in the coming year that will affect Marina del Rey, and they are very important,’” Burke warned, suggesting that if Dana is elected he will vote against the interests of Marina apartment and boat slip tenants.
“Many of the tenants had come to complain to Burke about rent increases in the Marina and Burke spent most of her time at the session trying to explain the county’s rent control ordinances and why Marina apartment tenants have experienced recent rent increases as high as 17 percent.”
In Johnson’s article, he stated that Burke told the audience that when the rent control ordinance was extended, an allowable rent increase brought a double rent increase in some cases, and she said the rent control ordinance was only extended for three months.
“Burke continually reminded the Marina tenants that Dana supported Proposition 10, the defeated initiative which would have shifted rent control ordinances from the local to state level.
“‘At the time (the supervisors considered the county rent control ordinance), there was Proposition 10 on the ballot and if our rent ordinance was not in effect, we would have been required to immediately have an election (if Proposition 10 had passed),’” said Burke.
“Burke said she opposes a recent county grand jury suggestion that the county sell all or part of its assets in the Marina. She warned the grand jury issue ‘goes to the very heart of the Marina.’
“‘Is the Marina a recreational resource or is it a business resource,” Burke asked, suggesting that she sees the Marina as a ‘recreational resource while Dana would view the Marina as a business source.’
“Burke acknowledged that the Marina ‘is the biggest profit-making enterprise that the County of Los Angeles has.’”
“Burke told the Marina tenants she had fought to keep Marina Fund monies in the Marina, rather than support recent action by other supervisors who sought to divert the Marina Fund revenues into the county’s general fund.”
“The supervisor said, ‘In the past, monies that were reserved from the Marina were held in the Marina. We are now at the point where the bonds are almost paid off. Now we are at the point where some feel we should use all the funds except those absolutely necessary for the maintenance of the Marina.’”
Johnson wrote that Burke had emphasized that Marina funds should be used to ensure that the whole Marina area is maintained, but that she admitted, “I lost on that,” and that other supervisors succeeded in tapping into the Marina Fund.
Jeffrey Rabin, a Los Angeles Times reporter, wrote on February 28th, 1991, “Yvonne B. Burke angered Marina leaseholders by seeking to defend price controls then in effect on apartments and boat slips. Marina leaseholders, determined to defeat her, contributed to Dana’s successful supervisorial campaign in 1980.”
MARINA LESSEE ABRAHAM M. LURIE —
On November 13th, 1989, Rabin wrote his second part of a three-part series, “The Ties Are Cozy,” about Marina development and the county.
Rabin listed Lurie’s marina holdings in the article: Marina Plaza Hotel site; Marina International Hotel; Marina Beach Hotel; Marina del Rey Hotel; Admiralty Apartments; Islander Marina Apartments; Fisherman’s Village; Pier 44; Marina West; and Marina Beach Shopping Center.
Rabin’s article on Lurie reported the following:
“He is the biggest developer in Marina del Rey, owner of hotels, apartment houses, offices, restaurants, shops and boat slips. Yet when Lurie became delinquent on nearly $1 million in property taxes last year, the Los Angeles County Department of Beaches and Harbors, which oversees the Marina, claims it knew nothing about it.”
“Months after private lenders declared him in default on more than $1 million in loans secured by his county leases, the Department of Beaches and Harbors professed to know nothing about it.
“And when Lurie needed the department’s approval to sell nearly half of his holdings to mystery foreign investors in order to save himself from financial ruin, the agency made no effort to find out who they were.
“For Los Angeles County, the risk of ignorance was substantial. A financial collapse of Lurie’s operation could have depressed county revenues and real estate values throughout the Marina. But Department of Beaches and Harbors Deputy Director Chris Klinger conceded, ‘I had never been aware he was having those sorts of problems.’”
“His boss, Director Ted Reed, blamed the department’s ignorance of Lurie’s tax delinquency on ‘a hole in the system.’
“Lurie’s problems surfaced when the Los Angeles Times sought to determine the identities of his secret foreign partners in a transaction approved in August by the Board of Supervisors.
“Lurie won county approval to sell a 49.9 percent interest in his Marina holdings to a secret group of foreign investors.
“In an article Sunday, The Times reported that the Marina’s new leaseholders are 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.
“At the time, supervisors ignored the advice of private and public counsel to obtain the identities of new leaseholders and instead accepted assurances from the investor’s attorneys and accountants that their clients were not involved in any criminal activities,” the article continued.
“The county’s acquiescence in the secrecy was also criticized on grounds that the public has a right to know the identities of those who operate and profit from use of public property.
“But the inquiry also shed new light on how the county manages the Marina and the long and often cozy relationship between the county and Lurie, a major campaign contributor to the supervisors.”
“The mammoth Marina del Rey project began in the early 1960s, conceived as a novel partnership between the government and private enterprise that would give taxpayers a share of the profits. For some of the early investors, profits were elusive.
“Lurie acquired his first Marina properties in 1968 by taking over the foreclosed leaseholds of some of those pioneer investors. Eventually, he became the largest leaseholder in the Marina, developing his new waterfront properties with hotels, restaurants, shops, boat slips and tourist facilities
“Through the years, he has earned a reputation as a hard-nosed businessman and a tough negotiator with political connections. His donations of nearly $200,000 since 1984 to political figures made Lurie one of the top campaign contributors in Los Angeles County,” the article reported.
“Lurie’s campaign contributions have spanned the political spectrum from conservative Republicans to liberal Democrats, from GOP Governor George Deukmejian to Assembly Speaker Willie Brown. He also has contributed to each of the five members of the Los Angeles County Board of Supervisors.
“Once, when the California Coastal Commission tried to force Lurie to include low-cost roomS for the poor in his new luxury hotels as a condition for approving construction, the combative developer drummed up special interest legislation seeking to establish that his waterfront property was not in the coastal zone. The bill never passed, but he won a compromise,” the article said.
“Lurie’s relationship with Los Angeles County government has been considerably more cozy. For more than 15 years, the county has waited patiently for Lurie to build a nine-story hotel, to be called the Marina Plaza, on one of his leased parcels. In addition to property tax, the county stands to earn a percentage of the profits generated by the hotel. It was one of the hotels delayed by Lurie’s long-running battle with the coastal agency.”
In March 1983, the supervisors voted to extend Lurie’s long-term lease on the site if he would proceed with “the prompt improvement of the premises” by building the long delayed hotel.
“However, the lease extension was to be canceled if Lurie was unable to begin construction by the time his Coastal Commission development permit expired on December 8th, 1983. By mutual consent that date was extended for another year. Lurie contends that the installation of some underground pilings satisfied the lease terms, but the land is still vacant today, five years after the last deadline.
“According to county tax rolls, the land is valued at $4.4 million, although private investors estimate its market value to be several times greater. Yet for the last six years, Lurie has paid the county only $1,001 per month in rent to preserve his development rights to the prized site,” the Times article reported.
“An additional $10,100 a month is deferred and is not due until 15 years after Lurie gets a construction loan for the hotel. Lurie owes the county more than $880,000 in deferred rent and interest.”
“Department of Beaches and Harbors’ Klinger acknowledges that the hotel site is ‘a very, very valuable piece of property’ and is not generating the kind of revenue it should be, and he called the minimal rent Lurie pays for the property as ‘the greatest deal in the marina.’”
“Director Reed is more blunt: ‘There is no doubt that parcel is the source of great embarrassment to all of us, he said. We have not been able to accomplish what was expected.’” reported Rabin.
Reed also stated that the county’s lawyers believe Lurie’s initial work on the property was enough to preserve his claim to the hotel site,
“Ironically, the seeds of Lurie’s financial troubles were sown when he built another hotel, the high-rise Marina Beach Hotel. It has lost money since it opened in 1986. Lurie blames himself for not allying with a major hotel chain.”
It was at this point that Lurie “turned to a group of real estate brokers for help in finding a financial partnership to bail him out. After months of private negotiations, he asked the county last fall to approve a $160-million loan from the secret investors via the Paris-based Banque Indosuez.”
“By that time, Lurie’s financial troubles had become widely known in private business circles. ‘Everybody knew Abe was having trouble,’ said one Lurie competitor, who asked not to be identified.
“But county officials insisted they had no idea that Lurie was in a precarious financial condition. They did know, however, that the Marina Beach Hotel was not living up to profit expectations and Lurie had a $5.5 million balloon payment coming due,” wrote Rabin.
Information about Lurie’s business dealings will continue in the Thursday, June 3rd issue of The Argonaut.
Note: The Marina del Rey Historical Society is compiling memorabilia for its collection. If you have photos, documents or any special memory of the Marina you would like to share, please contact the society at (310) 578-1001, or firstname.lastname@example.org/.