The property is up for auction.
By Olivia Damavandi / Staff Writer
In its ongoing search for a permanent city hall, the City of Malibu last week submitted a $15 million bid for the Malibu Performing Arts Center, which will be auctioned June 15 as part of bankruptcy proceedings by property owner Vineyard Christian Fellowship of Malibu.
Valued at $27.6 million, according to a January 2008 appraisal, the 40,000-square-foot Malibu Performing Arts Center, or MPAC, is a fiber optic office building with state-of-the-art recording and sound systems, a 500-seat theater and dance studios. Included with the sale of the property are the fellowship’s assets, which include the high-tech recording equipment, housed inside the building located on Stuart Ranch Road.
“The [City] Council believes that this is a very fair price for the purchase of a building that will become Malibu’s city hall,” Mayor Andy Stern said last week in an e-mail to The Malibu Times. “If the city is the successful bidder at the auction, the city will issue certificates of participation to fund the purchase.”
The city’s $15 million offer was chosen as the first by Jeffrey I. Golden, the Chapter 11 trustee for the bankruptcy estate of Vineyard Christian Fellowship, to encourage bidding by other interested parties. This tactic, commonly referred to as a “stalking-horse bid,” allows the bankrupt company to avoid low bids on its assets.
In becoming the stalking-horse bidder, the city, if outbid, will receive a break-up payment of $300,000 from the trustee. If it is the successful bidder, for a purchase price greater than its initial $15 million offer, the city will receive a bonus of $150,000 from the trustee.
Neither Robert Tramantano of King Consulting, the firm handling the sealed bid negotiations, Jim Stang, VCFM’s bankruptcy lawyer, City Manager Jim Thorsen, Administrative Services Director Reva Feldman or Mayor Stern could comment on any other aspect of the auction, including the total number of offers made.
The city had made an offer to buy the property in March, but Stang, in a telephone interview with The Malibu Times that month, called it “too low” and said while no other formal offers to purchase the property had been submitted, numerous parties had expressed interest.
Gene Shiveley, the fellowship’s property manager and board of directors member, two weeks ago told The Malibu Times that “quite a few” offers had been made, and that tenants’ leases and all building operations are still valid.
Local broker Tony Dorn, who owned 25 percent of MPAC after his role as one of its original developers, said Tuesday in a telephone interview that while it is possible the city could be outbid by a bigger company, the MPAC building would make an “exceptional” city hall.
“It’s modernized, well parked and near emergency services,” Dorn said, calling it “advantageous” for the city to acquire an existing building so that it wouldn’t have to endure the pre-development process.
The property, according to a Malibu Times interview with Shiveley in 2001, was purchased by Vineyard Christian Fellowship of Malibu 10 years ago for $7.25 million.
The fellowship was formerly known as the Vineyard Christian Fellowship Church, until a rift in 2004 between church leaders and the founding pastor, the late Dave Owen, caused Owen to leave and start a new church in Agoura.
Prior to bankruptcy, the fellowship received a notice of foreclosure after defaulting on a $12,750,000 loan from Minnesota-based Marshall Investment Group in 2005.
Toward the end of 2007, the fellowship informed the investment group it was refinancing its property and planned to simultaneously pay off the loan. However, the Corral Fire, the fellowship said, interrupted the refinancing. The fire did not damage the organization’s building, but the grounds were destroyed and necessitated $100,000 in repairs, stated James Ellis Allen, the attorney representing the Vineyard Christian Fellowship, in court documents. In addition, Allen had stated that the fellowship’s operations were shut down for several months because of the fire damage and ensuing rains.
The city council continued discussion of price and terms of payment of the upcoming auction on Tuesday during a closed session meeting.