BUSINESS / LA Business Journal / Urban Issues

[LA Business Journal] Waterfront’s Future Adrift After Redondo Beach Voters Reject $400 Million Project

“Everyone thinks this is a victory for old Tony’s, but I’m a little nervous,” said Trutanich, whose father opened Tony’s on the Pier in 1952. “As locals, we love those places. … But when you bring somebody from out of town, on a Sunday, and you look at it with fresh eyes, there’s stuff to be desired.”

The long-running controversy underscores the contentious nature of development across California’s 1,100 miles of shoreline, where developable oceanfront property is rare – and highly coveted by investors.

“These projects are a function of public opinion, public amenities, private-sector market forces, and politics,” said Larry Kosmont, president of Manhattan Beach-based Kosmont Cos., which advises Redondo Beach officials on real estate and finance. “That is a very volatile cocktail.”

Developer CenterCal Properties was slated to construct and finance the massive Redondo Beach project, which would consist of a new boardwalk with shops, restaurants, public space, hotel, and swimming lagoon, as well as $130 million worth of infrastructure upgrades. The City Council had already approved the project and it was awaiting a hearing by the California Coastal Commission.

City Manager Joe Hoefgen said last week that Redondo Beach has not taken a stance on the project’s future since Measure C’s passage and plans to consult with the commission.

“We need to be careful and make sure that we satisfy our obligations to CenterCal as well as respect the intent of the voters,” he said.

Fred Bruning, chief executive of the El Segundo developer, said in a statement after the March 7 election that his proposal can duck regulations from the voter initiative because it already won city approvals. He also emphasized his commitment to seeing the project through.

“We intend to continue working with and listening to the community to finally restore the waterfront,” said Bruning, who wasn’t available for comment last week.

But opponents countered that the project cannot proceed because it still needs the commission to sign off.

“It has no vested right to roll over the citizens of Redondo Beach,” land-use attorney Frank Angel, a Measure C consultant, said in a statement.

Making waves

Redondo Beach’s pier and boardwalk emerged as a South Bay hot spot in the 1920s and still attracted crowds through the 1960s and 1970s.

It gradually fell into disrepair, especially after a 1988 fire wrecked a strip of shops and eateries. A number of revitalization efforts failed to get off the ground amid development debates, but the 2010 passage of Measure G – which allowed commercial zoning while limiting new development to 400,000 square feet – marked a turning point.

The city solicited development proposals, and after rigorous vetting, opted for CenterCal.

Bruning founded CenterCal in 2004, drawing on 13 years in retail development at Alexander Haagen Co.

The CenterCal portfolio includes a dozen shopping centers in Oregon, Washington state, Utah, Idaho, and California, according to the company’s website. Seven other projects are in the works, including a complex on Pacific Coast Highway in Long Beach, called 2nd and PCH, a 245,000-square-foot retail and restaurant space.

The Redondo Beach project, called the Waterfront, would be a comprehensive facelift, incorporating the construction of a shoreline boardwalk, 120-room hotel, office building, movie theater, and a marketplace for dining and shopping. CenterCal would also repair the aging pier and parking structures, and reconfigure a swimming lagoon. The company would privately finance the project’s $400 million price tag and take a 99-year ground lease from the city.

Joy Corradetti, owner of Mystical Joy, a boardwalk shop offering tarot card readings and whimsical accessories including crystals and wind chimes, said she welcomed CenterCal’s proposal as a way to fix crumbling facilities and draw foot traffic.

“I see the deterioration firsthand,” she said, describing cracked floors and falling slivers of concrete in parking areas. “I also see that even the local people won’t come down.”

She disputed the characterization of the project as a megamall, which Measure C backers emphasized in their campaign. Trutanich agreed that this description was a turn-off to voters, who passed the initiative with 57 percent of the vote.

“What killed the whole thing for us is that four-letter word ‘mall’ – M-A-L-L,” he said.

City Councilman Bill Brand, a self-described slow-growth candidate for mayor who won the seat in this month’s election, fought hard for Measure C.

In an opinion piece published in the local Easy Reader News this month, he described the Waterfront as a risky plan that would increase traffic, block ocean views, eliminate parking, and scrap public parkland.

“Next stop is the Coastal Commission and how this plays out in court,” Brand said in a statement last week.

He is slated to take office in April, replacing Mayor Steve Aspel.

Staying afloat

It takes a skilled developer to absorb heated debate from community members, said Stanley Lamport, a partner at Cox Castle & Nicholson who specializes in coastal land-use law.

The community, he said, is often concerned that people of means will buy up properties and keep them to themselves.

Then there’s the challenge of navigating California’s maze of coastal regulations while funding costly, laborious applications to build on patches of seaside land.

“The Coastal Act has its own language,” he said. “And you need to be effective in communicating what you’re doing to protect that resource.”

Even before Measure C passed, the development along the Redondo Beach waterfront needed approvals from the Coastal Commission, according to an agency spokeswoman.

Now the commission must also certify the measure’s changes to the Local Coastal Program, a set of planning guidelines for Redondo Beach’s harbor. That process will kick off once the city submits revised guidelines and is expected to take three to six months, prolonging uncertainty for CenterCal’s $400 million investment.

“When you get coastal opportunities of this size and scope, it’s definitely a rare find,” said Kosmont.

Restaurateur Trutanich said he hopes Redondo Beach hasn’t missed its chance.

“It seems as though since I was a kid, they’ve been going for a major renovation,” he said. “I’m just scared that everybody has fought the battle, had their pitchforks and fire sticks, and they’ve fought the fight. I just hope everybody doesn’t wake up the next morning and say, Now what?”

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