Malibu Performing Arts Center property to be auctioned

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Property owner Vineyard Christian Fellowship of Malibu is bankrupt. The city had made an offer for the property that was deemed “too low.”

By Olivia Damavandi / Staff Writer

After recently declaring bankruptcy, the nonprofit Vineyard Christian Fellowship of Malibu must sell all its assets, including the property behind City Hall on Stuart Ranch Road that houses the Malibu Performing Arts Center, or MPAC. The city has made an offer to buy the property but Jim Stang, VCFM’s bankruptcy lawyer, says it’s too low.

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. Gene Shiveley is listed as the fellowship’s property manager and sits on its board of directors. In an interview in September, he said he was directly involved with the 1998-99 purchase of the property and construction of the MPAC building.

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 courts 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.

According to a paper trail of documents, the fellowship did try to make good on its loan, making partial payments; however, it wasn’t enough for the lenders, who gave warning that unless a full payment on overdue notices was made by Jan. 2, it would file a notice of default or foreclosure.

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.

The church had been in Malibu for 15 years.

Since its initial purchase of the land 10 years ago on Stuart Ranch Road, the 40,000-square-foot Malibu Performing Arts Center has been rebuilt with state-of-the-art recording and sound systems, a 500-seat theater and dance studios. MPAC opened in 2006. Music artists such as Barbra Streisand, Moby and Tom Petty have recorded or performed there, and MPAC has also been the venue of benefit concerts sporting such names as Dennis Leary, the cast of MAD TV, Jackson Browne, Los Lobos and Martin Short.

The fellowship has retained accounting firm KPMG to market and sell the approximately six-acre property at auction on May 13. Included with the sale of the property are the fellowship’s assets, which include the high-tech recording equipment housed inside the MPAC building.

“This is a special-use facility so the value of it could be dramatically different among different types of buyers,” Harold Bordwin, managing director of KPMG Corporate Finance, said Tuesday in a telephone interview. “So rather than us setting a price, we’re going to let the market dictate it.”

The property, according to a Malibu Times interview with Shiveley in 2001, was purchased 10 years ago for $7.25 million. During that same interview Shiveley said he believed that an appraisal then could possibly be in the neighborhood of $20 million to $25 million.

“If we were looking at this from a business point of view,” Shiveley had said, “it’s an incredible move, quite incredible. There are not that many places where you can triple your money in that short of time.”

The city discussed the potential price and terms of payment for the adjacent property on Monday evening during a closed session meeting. City Manager Jim Thorsen declined to comment on the negotiations, but on Monday night said the property, if purchased by the city, could serve as a new City Hall.

“The city has made an offer that is, in our opinion, below fair market value of the property,” Stang said. “We have not countered that offer. KPMG has been given a copy of the offer and I believe they will be contacting city attorneys to discuss it.”

Stang said no other formal offers to purchase the property have been submitted, but that numerous people have expressed interest.

Marshall Investments will claim the property in the case it is not sold at the May 13 auction.