The ball is in our court

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From the Publisher/Arnold G. York

Like many people in Malibu, I’ve been involved in a number of real estate transactions over the years, buying and selling both homes and commercial property. I’ve made some offers that were accepted and some that were rejected, and some that sort of blew away in the wind.

I’ve been following the trail of the Malibu Bay Company Development Agreement, which was recently rejected fairly soundly at the polls by the Malibu voters. Following the defeat of Measure M, the city of Malibu sent a letter on city letterhead to Malibu Bay Company President Jerry Perenchio inviting him “to participate in a dialogue on how to best meet each other’s needs.” In a surprising degree of unity, the letter was signed by all five city council members, all five planning commissioners, and Patt Healy of the Malibu Coalition for Slow Growth, John Mazza of Malibu CAN and Efrom Fader of the Malibu Township Council. The only ones missing from the letter were Steve Uhring of CAN, who, we were told, didn’t want to sign it, and Ozzie Silna, who pretty much banked the opposition to Measure M.

The question is, is this letter a real invitation or is it just posturing in preparation for the next City Council election in the spring?

I think we have to look back a bit and try to figure out what just happened to make any sense of the city letter.

The Malibu Bay Company put an offer for a development agreement on the table for us as voters to consider. It was a serious offer, a very specific offer, a very complicated offer, and it included significant cash. It also had a number of contingencies, which probably wouldn’t be unusual for a real estate project of this size, which attempted to roll all of the 12 MBC properties into one deal.

We, the people of Malibu, rejected the MBC’s offer at the polls. Trying to divorce it of all the emotion generated by the election, what we said fundamentally was the offer simply wasn’t good enough. We wanted more for what we perceived we were giving up, and probably the offer had too many contingencies, which I suspect made people very nervous. Part of the ‘no’ votes were some people who are simply fundamentally opposed to anything being built. But I think they were more the minority. I suspect the majority of the ‘no’ voters simply weren’t comfortable enough with the deal to take the chance, and found it was safer to vote the deal down. That would seem to me a perfectly reasonable approach. But the question remains, now that we’ve said no, what happens next?

What the letter would seem to imply is the MBC should engage in new dialogue and come back with another offer. The problem with that negotiating strategy, and that’s really what it is, is it’s based on a fallacy. The fallacy is that the MBC has to come back with another development offer to develop their properties. The reality is it doesn’t. All it has to do is apply for development permits, parcel by parcel. It already has two applications in the pipeline, one for the Chili Cook-Off parcel and one for the Ioki parcel. Both are in the Civic Center area and neither would require a vote of the Malibu residents. Undoubtedly, the MBC would have a battle on its hands, parcel by parcel, but on the other hand, so would the city; it would all be very expensive and ultimately the MBC would get to build. Where and how much would probably end up being decided by a court, outside of Malibu. That, to my mind, would be a very poor way to develop whatever is left in this town.

A much better way would be to negotiate a deal. However, if I owned the property, which I don’t, I sure wouldn’t be interested in going back to the bargaining table until I had some indication the city and the opposition were serious about arriving at a deal. There is only one way I can see to do that; that is the city and the opposition has to get together, agree on what they want and then make a serious offer to the MBC. That means they’ve got to commit to an offer, in writing, with specific conditions, a specific timetable and probably an earnest money deposit of some sort or something else to show they’re serious. A good starting point might be the development agreement that was just rejected. Pull out the pieces that were not liked and come back with a counter offer that essentially says, OK, we’ll accept this.

If we don’t, then it’s just a vague amorphous invitation. Nothing is really going to happen, even if there are some negotiations going on. It would be nothing but public relations for everyone, which would be sad, and a major missed opportunity.

We have to keep our eye on our goals. There are things we want. We want a community center. We want ball fields. We’d love some sort of park in the Civic Center. We need an emergency room. We need some cash. We need some open space. Those were our goals before, and they’re still our goals. Just because we didn’t like one deal doesn’t mean we can’t still accomplish those goals, but to get them we have to act. We have to be able to say, this is what we’ll agree to, whether it’s a development agreement or parcel-by-parcel, with a plan; it would be a shame to miss this historic opportunity. I suspect the ball is back in our court and it’s our turn to propose.