Why Rush Such an Important Decision?

        Everyone wants to see a new Redondo waterfront to showcase our city. However, because something is sorely needed doesn't mean the city council should rush a 99+ year project, even if the council has studied the concept for ten years.

             CenterCal's plan is for 460,000 square feet of space in 15 acres, compared to Plaza El Segundo's 400,000 square feet of retail space in 30 acres of inland space. We are looking at 15% more development, in 50% less area---on the water.

             After reading the Administrative Report from the October 29 City Council agenda, I'm now concerned about the city's financing of this project. The MOU states that in exchange for the $200 million CenterCal investment, the company has the exclusive rights for the first 30 years to develop the land rent free. That's correct, rent free, until year 31, at which point the city receives just $1 million, or approximately $475,000 in today's dollars.  That's hardly adequate compensation for 15 prime waterfront acreage. Only IF CenterCal receives more than a 10% return on investment does the city receive up to 25% in ground rent.

              Funding for the project actually comes from the California State Teachers Retirement System so CenterCal would appear to have very little skin in the game. This type of project has been repeated often with the construction of professional sports venues, many financed through public money, with the uncertain promise of increased tax revenue. Risk is carried by taxpayers, with private enterprise benefitting. While CenterCal is well-intentioned, they are seeking  a large amount of the reward, yet with little risk.

             At last year's city council meeting, CenterCal's CEO stated uncertainty in knowing public financial participation. His stated goal was to do projects with as little public participation possible, saying none of their projects over the past ten years required public assistance. Does he remember The Rivers, a CenterCal mall redevelopment project in Oregon City, Oregon? The company made that city responsible for repayment of CenterCal's $17.6 million infrastructure improvements. (The project subsequently failed. A city commissioner refused to approve  public financing of a for-profit private enterprise's project.)

              Redondo must now make up to $25 million of unspecified infrastructure improvements from its Capital Improvement Funds. Communities often vote on general obligation bond measures, which is a true gauge of a project's public acceptance. Unfortunately, this $25 million of Capital Improvement Funds would not go to voters. Would $25 million be better spent on a new police station and modernized fire stations, something the city desperately needs? We may never know. CenterCal should carry the $25 million note on the infrastructure improvements,  with reinvestment of a portion of generated tax revenue to pay it off.

              I'm excited to see a project with strong local flavor, appropriately sized, and fiscally responsible. I urge the City Council to rethink this risky overdevelopment plan with CenterCal Properties and revision our waterfront to include the 38 acres AES has agreed to free up even if they build a new power plant.

This is the opportunity of our generation in Redondo Beach.  We owe it to future generations to do it right, even if it does take more time. 

Todd Loewenstein

Former School Board Member, Redondo Beach Unified School District