Bad Deal for Channel Islands Harbor, Sweet Deal for Developer

http://www.vcstar.com/story/opinion/columnists/2017/12/30/bad-deal-channel-islands-harbor/991226001/

On December 12th, the Ventura County Board of Supervisors awarded 2-year extensions of Exclusive Rights To Negotiate (ERN) to the developer, Channel Islands Harbor Properties LLC (CIHP), for three premium public waterfront properties at Channel Islands Harbor. The properties are located throughout the harbor: Fisherman’s Wharf; the promontory lot on Harbor Blvd. across from the HarborWalk Complex; the Casa Sirena Hotel Replacement project site.

What is outrageous about this deal is that it eliminates alternative development opportunities with any other developer for many years. The ERNs remove the County’s development options for the promontory lot on Harbor Blvd across from the HarborWalk complex and for the Casa Sirena Hotel Replacement site for more than two years. For Fisherman’s Wharf the extension is for 7 years, up to the end of 2022 – a full two years beyond the terms of the original 2015 Lease Agreement. In addition, the County did not charge even one dollar to the developer for these extensions. None of this motivates the developer to perform. None of this makes any business sense.

Imagine you own three waterfront properties at Channel Islands Harbor, would you give up the right to market your properties to anyone for 2 or more years for absolutely no money? This is what the Board of Supervisors did December 12th on the recommendation of the Harbor Director.

In addition, this deal rewards the developer’s non-performance. The developer chose not to provide the information required by the City of Oxnard for its review nor to date has the developer demonstrated a willingness to go through the City’s established amendment process for its Local Coastal Plan (LCP). When the City did not rubber stamp the Fisherman’s Wharf project, CIHP threatened to sue the City even though they knew from the beginning that an LCP amendment may be required.

CIHP knew as early as the June 10, 2014 ERN for Fisherman’s Wharf and the December 1, 2015 Lease Option Agreement – Article 6, paragraph A which states they were obligated: “To apply for, diligently pursue and work cooperatively with County to pursue the granting of such other land use entitlements and approvals from any other agencies (such as zoning changes, conditional permits, variances) and all approvals from the California Coastal Commission, including any applications to the City of Oxnard in the case of a required amendment to the City’s certified Local Coastal Plan”.

The 2015 Lease Option also states in absolute terms, “…in no event shall the term of this Agreement extend beyond five years…”. Despite this, the Board of Supervisors amended the term to seven years. These multi-year extensions could jeopardize the Casa Sirena Hotel Replacement. This is a project the public enthusiastically supports and was awarded to Brighton Management. Brighton has met their obligations and submitted their plans to County Planning months ago. Still no date has been set for construction. Unfortunately, the project the public supported may not be the project the public will get.

With these ERNs the County gave CIHP leveraging power to take portions of the property originally approved for the Hotel project. Again, these tactics continue to undermine the public’s trust in the County’s Board of Supervisors.

By comparison, the County is willing to spend considerable time and money to promote the developer, CIHP, despite the community’s opposition to the Fisherman’s Wharf project. Three Supervisors, the County CEO and the Harbor Director plus assorted staff traveled to San Diego to plead for the 400 apartments at Fisherman’s Wharf at the October Coastal Commission Hearing. Despite their pleas, the Coastal Commission said that, by law, the Coastal Act requires CIHP’s project to meet the City of Oxnard’s Local Coastal Plan.

The timing of these ERN extensions is suspicious because this is the same time period that the Coastal Commission required the County to negotiate with the City of Oxnard regarding an LCP amendment. These ERN extensions were given to CIHP prior to the start of the County’s negotiation meetings with the City. This appears to be an act of bad faith on the part of the County. The County Supervisors gave CIHP the advantage to stall negotiations for at least two years at no cost to them. How can meaningful
negotiations take place when the County has enabled the developer to reject any compromise?

All these actions raise further questions the County needs to answer:

  • Why were these extensions made for two years when one-year increments were in the original Lease?
  • Why was the start of construction for the Fisherman’s Wharf project necessary before the developer was
  • required to deliver the development concepts for the other two properties?
  • Why were all 3 properties given to this one high-end apartment developer when the County knows what is needed is affordable housing?

Many residents of Ventura County are of low to moderate income. The County Supervisors claim to be
concerned about giving these residents access to the harbor. The County Supervisors should be
concerned about providing both affordable housing and protecting coastal land for all its residents, not
just for the privileged few. As Sara Wan, former Chair of the California Coastal Commission has said
many times: “Apartments can be built anywhere. Harbors can not.”

These ERN extensions clearly show the County Supervisors’ actions are in complete contradiction to
the needs and financial interests of the public – simply a bad deal.

Rene Aiu and Sumie Mishima on behalf of the Harbor & Beach Community Alliance (HBCA)