The beginning of a new year is always exciting. My calendar book is just beginning and the computer screen is a big empty page waiting for the year’s events to leave their mark.
If December is the month to look backward into the year just passing, then January is the time to look into the crystal ball and try to guestimate what’s coming and what to watch for.
So here goes:
-The Formula Retail ordinance is working its way through the process to decide if we’re going to put some limitations on the uses of commercial developments. Proponents see Malibu changing, turning into an upscale shopping district, and fear the loss of Malibu’s soul. Opponents claim the ordinance won’t work and, in fact, it may have the opposite result of chasing out the Mom and Pop’s. This one’s got a way to go and is probably going to be ultimately settled at the ballot box.
-The Civic Center commercial landowners approved a Community Facilities District that will ultimately finance some sort of a sewer system in the Civic Center. The initial money that the city is fronting is just for design and preliminary stuff so they can ultimately plan it and then figure out what everyone has to pay, and that’s when the real fighting will begin, over what everyone’s fair proportional share should be. The city has the Los Angeles Regional Water Quality Control Board breathing down its neck, so it needs a working plan and a project to get out from under the county-imposed prohibition that kicks in in 2015 for commercial and downstream 2019 for residential. The residential fight is a bit off in the future but the commercial portion is here and now.
-Councilmember Skylar Peak is back on the front page, this time related to an investigation over what may be nothing more than a simple traffic accident on Christmas morning—or perhaps something more. People are beginning to talk more about his absences from Council meetings and what appears to be his sometimes nonengaged manner while there. At some point this is going to come to a head.
-The Skate Park still hasn’t found a home. The city is now trying to wheel and deal to get the rest of the land on Bluffs Park, perhaps in exchange for Charmlee Park, a multiparty deal that will probably include the state, the Santa Monica Mountains Conservancy, certainly the California Coastal Commission, possibly some private landowners. I’m certain an alphabet soup of public and private agencies might want to dip their beaks also.
-There are a bunch of future expenses headed our way, the biggest being a new water system for Malibu and Topanga. Our drinking water comes from Waterworks District 29, a county district. Its system is antiquated and the pipes are worn out. Additionally, we don’t have enough reservoirs and storage tanks. The early estimates look like a $280-million price tag for an up-to-date system, with Malibu’s share being roughly $150 million.
-The issue of an independent school district for Malibu will probably be back, but somewhere along the line we’re going to have to make some assurances that the City of Malibu is willing to put up or guarantee some significant dollars to replace the dollars we’re going to lose if it’s ever going to happen. Currently, the City of Santa Monica — a very wealthy city — puts in $14.5 million per year to the school district and Malibu makes up about 20 percent of the school district. So, indirectly, Malibu gets about $3 million plus of the Santa Monica contribution. My guess is that they’re going to require Malibu guarantee to replace those dollars before they OK a separate district.
-So, you begin to see that there is a repetitive theme running through this column. In 2013, along with the years to come, the City of Malibu is going to need more and more money. It’s pretty much the story of most cities as they mature.
Past councils did an excellent job and we currently appear to be in decent shape. The Lumberyard deal was a beauty. We bought the land from Jerry Perenchio for a steal, which he certainly knew. We not only got the land that is now Legacy Park, but we also got income-producing property that pays for the loans we made to buy the property. Also, we have participation leases so, over time as the rents rise, and they will, the city will have an excess cash flow from the Lumberyard project. All in all, a wonderful real estate deal.
The city can also raise money through development agreements with developers, which is the way many cities pay for their new roads and schools and such. But you can’t just extract money from them for what they are legally entitled to do, so to get those additional dollars you have to add some sweetener. That’s always a difficult political choice and you only get the dollars if they build out the project.
Lastly, for a city there are generally three other alternatives: big box stores, car agencies — neither of which will ever happen in Malibu. The last alternative is a hotel or hotels and they can be cash machines if done right, because the city gets to charge a transient occupancy tax (often called a TOT) and keep the money. It’s part of what Santa Monica did, and it works. But it’s a tradeoff, and ultimately the decision is political. This year I think we’re going to begin addressing some of these tradeoffs.
Stay tuned.