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Marina lease sold for $9.8 million by Mark McDermott, Easy Reader
Pub. March 27, 2008

Developer Alan Mackenzie spent a good part of the last decade waiting for Redondo Beach to make up its mind regarding waterfront development. He doesn’t have to wait any longer, as the $9.87 million sale of his Redondo Beach Marina leasehold to Decron Properties was finalized last Friday.

The 7.5 acre leasehold – which includes 60 boat slips, a boat hoist, and Samba, Captain Kidd’s, Delzano’s, Ruby’s, and Polly’s restaurants – is widely considered the key to the revitalization of the harbor area.

Mackenzie purchased the property in 2003 with a group of investors who had intended to build a boutique hotel and time-share units. He also advised the AES power plant in its portion of the failed Heart of the City plan earlier in the decade. The developer praised the city’s efforts to bring change to the harbor, but also gently chided its slow political process.

“I think the one overall impression I’ve had is the public sector’s oversight and control of these projects – the AES and waterfront projects – has really resulted in challenges for the private sector,” Mackenzie said. “The private sector really hasn’t been able to present the projects without waiting for public sector issues to be resolved, and that is the major reason nothing has happened either in the Heart of the City or the waterfront to date. I think if either AES or we had been able to present a project on either site, something would have happened by now.”

Decron Properties President David Nagel seemed undaunted. He said his company will engage in broad community outreach and try to move forward quickly with a project that everyone can embrace.

“We bought this property with the understanding that there is a big challenge in redeveloping it conceptually, over time, because there is a lot of disconnect with the community with what they’d like to see down at the harbor and in the entire district,” Nagel said. “I think there are a lot of different community groups that are not in sync with each other, and it will be our job as the new owner to come up with a new concept that will hopefully be embraced and welcomed by the community.”

Nagel said that a hotel would not be part of that concept -- “We don’t do hotels,” he noted – but rather a “California lifestyle” theme that would include entertainment and retail components intended to bolster existing restaurants.

“It will be a theme that will take advantage of the harbor, take advantage of the water, and include some kind of entertainment component that will bring the community down to the harbor throughout the week and especially on the weekends,” he said. “We also want to embrace the Seaside Lagoon. We see the Seaside Lagoon as a very, very important feature or amenity that the community enjoys. Whatever we do, our company will not turn our back on the lagoon, but embrace it as a public venue that will be complimentary with whatever we put together.”

Mackenzie said that if his experience offered any lesson, it was that the private sector needs to take the lead in the development process.

“I think it’s hard for a city, whose primary role is regulatory, to spearhead redevelopment of these extremely complicated parcels,” he said. “I think the private sector needs to take the lead, and the city and stakeholders can comment, critique, and modify, but we are more equipped…to present a project.”

Assistant City Manager David Biggs said that he understood Mackenzie’s frustration with the slow process of change in the harbor, but he suggested that the developer could have presented his project prior to the final resolution of the zoning process.

“I think the project was ripe to present and be vetted by the community as a whole,” Biggs said. “The community could have seen what some of the benefits were, and not just be fed what might be perceived as negatives by certain folks.”

But Biggs also acknowledged that “the nature of the beast” of harbor development is much easier to judge in retrospect.

“That whole thing was coming off the legacy of the Heart of the City and the legacy of disconnect associated with that,” Biggs said. “I think people on the development side were a little too cautious showing what they were thinking, because they were fresh off that experience.”

“It’s not for the faint of heart,” he added.

Nagel said he believes part of the key to success in the harbor will be to move quickly. He said his company did not buy the Marina property with any intention of waiting “five or 10 years” for something to happen.

“We think it’s a mistake to sit there patiently waiting until you convince the whole world to embrace your idea,” he said. “Rather, we intend to go out in the community and see what ideas will work, what ideas will be embraced.”

Biggs said that because Decron is a privately held family company, it may have better “staying power” than Mackenzie’s primary investors, who were publicly held companies. Nagel said Decron has a portfolio of properties worth an estimated $1 billion, including the $25 million Bay Club apartment development in Marina Del Rey.

Several ongoing political processes could impact future harbor development. The city’s rezoning process for the harbor will continue in April as the City Council considers a proposal to add 557,000 sq. ft. of allowable new commercial development. Additionally, the “Major Changes in Land Use” initiative will be on the November ballot.

“All of these things concern us because so much of it is agenda-oriented and not focused on a project,” Nagel said. “This will be a project that we believe will be embraced. But the roadblocks being thrown up in front of all development, we think, are a big mistake…What scares us is you can work with the city, and work with the community, and then all bets are off, all because of something that is fueled not necessarily by what is going on, but by the fears that came from the Heart of the City project. Notwithstanding all that, we decided to buy a great piece of land with a tremendous amount of potential brain damage because we see this as a true diamond in the rough, a very unique site. We are Southern California developers, and we think this is one of the most unique Southern California development opportunities out there. Our feeling is it’s probably worth the brain damage, but we want to actually get something done.”

Mackenzie wished the new company well.

“Time will tell, but I think a lot of the groundwork has been done,” Mackenzie said. “Maybe the timing is good now to bring something forward.”

Councilman Chris Cagle said he was optimistic about the new prospects for harbor area revitalization.

“I’m looking forward to working with the new owner,” Cagle said. “They seem enthusiastic about their purchase, and hopefully good things will be ahead. They seem interested in reaching out to the community and trying to go through the right steps to try and accommodate everybody, but still finding that right fit.” ER

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