Malibu Lumber lease done deal

Richard Weintraub

Some critics remain disappointed that the site will not include a lumber company; others say the city is getting a raw deal.

By Jonathan Friedman / Assistant Editor

After nearly a year of negotiations, the lease agreement between the city and Malibu developer Richard Weintraub was approved by the City Council at Monday’s meeting. The 39-year lease approval came one week after the Planning Commission approved Weintraub’s 30,000-square-foot project.

Weintraub is designing the project (which is technically a remodel of the three Malibu Lumber structures as 50 percent of the existing exterior walls will remain) with fellow Malibu resident Richard Sperber, who heads the landscaping business ValleyCrest Companies. It will include state-of-the-art landscaping, including “green walls” consisting of environmental friendly vegetation and flowers, as well as a courtyard and tidal pool, and a play lawn. Reclaimed wood decking will be used throughout the three-building complex, which also has two large “sheds,” and two main buildings would have sky gardens.

“We’ve put a lot of effort into creating a design of what Malibu is, what Malibu was and what Malibu will be in the future,” Weintraub told the council during the meeting.

The deal calls for Weintraub to pay $925,000 per year as a base amount beginning with a payment in March. Minimum rent will go up by 5 percent every five years, and after the 16th year the rent boost will equal the increase in the consumer price index during the prior five-year period. Also, Weintraub has agreed to pay an amount equal to 30 percent of the income he receives from his sublets over a certain threshold, which will initially be set at $2.2 million, but that could go up. There is also an opportunity to extend the lease to 54 years.

At least 3,000 square feet of the facility must be sublet to local businesses, and those businesses would only have to pay, at most, 80 percent of the average rate charged to the other tenants renting the facilities. And Weintraub, who has said he will charge local tenants $7 per square foot, said they would be paying even less than the 80 percent amount. Weintraub said not receiving a maximum rental rate was worth retaining local businesses, which Malibu is losing.

“We are facing a desperate situation, and I think it’s going to become more prevalent as the years go on,” Weintraub said.

The various council members applauded themselves for the deal, with many saying they had feared they would never be able to reach such a satisfactory conclusion.

“Everyone on this council did what no other council had the courage to do, and that was ask for the stars,” Mayor Pro Tem Pamela Conley Ulich said. “And we got it.”

But not everybody was pleased with the deal. Malibu Coastal Land Conservancy President Steve Uhring said he was disappointed the property would not be replaced with another lumber company. The council members said they had tried to do that, but no lumber company could afford rent more than $500,000 per year.

Another regular council opponent, John Mazza, said the city was getting a raw deal because when it originally asked for potential renters to bid on the property, it stated there was a potential to build up to 27,000 square feet. But now Weintraub would be getting 30,000 square feet, while still paying the $925,000 originally proposed.

The city officials responded that the rent amount asked for never depended on the square footage. Also, they said the city would be making more money in the long run because of the percentage threshold bonus amount that Weintraub would be paying.

When the city bought the Chili Cook-Off site from Malibu Bay Co. last year, it made an agreement with Malibu resident Jerry Perenchio’s company, Malibu Bay, that if it were to replace any structures, they would be the same size as the originals or smaller. City Manager Jim Thorsen said in a telephone interview on Tuesday that it was recently determined in a survey that the remodeled buildings would actually be 15 square feet smaller than the original Malibu Lumber buildings.

Malibu Bay attorney Dick Volpert said this week in an interview that he did not know yet how the facility matched up in size.

“I haven’t checked it out yet,” Volpert said. “Yes, we will look at them, just because that is what we do. So, far as I know, the city has complied with the requirements [in other portions of the agreement].”

The city is in need of the rent money from the Malibu Lumber site because it must use those funds, plus the money it receives from the Malibu Animal Hospital and Coldwell Banker, to pay off the debt it incurred in buying the Chili Cook-Off site.