The Long Beach skyline is going to have a new addition within the next three years.
The Shoreline Gateway Project, which was approved back in 2007 with the help of the now defunct Redevelopment Agency, was again approved by City Council on Tuesday, Nov. 20 — slightly modified.
On Nov. 5, 2007, the Redevelopment Agency entered into an Owner Participation Agreement (OPA) with Shoreline Gateway, LLC to develop a massive project located at the corner of Ocean Boulevard and Alamitos Avenue, diagonal from Villa Riviera.
The project called for two phases: A 35-story east tower with 221 market rate ownership residential units and 12,600 square feet of retail space, and a 21-story mixed use west tower. However, the turn in the real estate economy derailed the project — and then the RDA was disbanded.
Tuesday, Development Services recommended that the City Council amend the OPA in order to get a different iteration of the project going.
“The city of Long Beach now has the opportunity to stimulate the redevelopment of this site in support of the original vision, while enhancing the economic potential for additional property tax revenues,” said a statement in the staff report.
The new plan is to move forward in reverse. Phase One would now develop the west tower. This time, the west tower would be an 18-story mixed-use development comprising 221 rental units (that could eventually become ownership condominiums) with approximately 9,500 square feet of leasable retail space.
There are five parcels of land at Shoreline Gateway and the RDA had control of four. The city, which is the Successor Agency for RDA, would sell three parcels to Shoreline Gateway, LLC for $100. The RDA originally would have sold the parcels for more — about $5 million — but it also would have helped the project with equivalent tax relief.
“With the elimination of the RDA, the tax increment went away,” said Robert Zur Schmiede, deputy director of development services. “We didn’t have that future flow to apply to future development.”
Selling at $100 is way to substitute for that help, officials said, in addition to honoring a $6 million loan that was agreed to before the RDA dissolved. Shoreline Gateway, LLC also has gone out and found investors to make the situation work on its end.
For its part, Shoreline Gateway, LLC will partner with Ledcor Properties Corporation and PNC Realty Investors for the development.
“Ledcor developed the two towers across from City Hall (400 W. Ocean Blvd),” Zur Schmiede said. “They’ve done a lot of high rise in various markets and know Long Beach.”
The total construction cost for the project is estimated at about $80 million. Staff decided to move forward and recommend continuing with this changed Shoreline Gateway Project after studying alternatives and how much that could benefit the city, Zur Schmiede said.
The staff study said that, projecting for 15 years, about the best that could have been expected independently would have been a lesser five-story project. The 15-year net value of tax revenue from the west tower was predicted at about $7.46 million versus about $2.27 million for any other possible expected project.
There is an option to develop a Phase Two within one to two years of issuing the certificate of occupancy being given for Phase One.
“Once complete, the Shoreline Gateway Project will be a landmark in downtown Long Beach,” said a statement in the staff report. “It will further revitalize downtown through the redevelopment of underutilized property and will provide additional market rate residential units in downtown.”
Jim Anderson, who is president of Shoreline’s managing member Anderson Pacific and has served in multiple capacities for the Downtown Long Beach Associates, said he was happy with the reconfigured project.
“This particular location is something we have been interested in and have owned property in for eight years now,” he said. “The concept was always mixed use — primarily residential, but ground floor retail. It’s something you’ll see every day when you come along Ocean Boulevard. The project was meant to be special.”
The project also was considered during the implementation of the new Downtown Plan.
Anderson estimated that that it would take about two and a half years to complete the west tower, with the earliest construction could start in about the third quarter of 2013.
“I think it compliments what is there on Ocean (Boulevard),” Zur Schmiede said. “You have the Villa Riviera there on the southeast corner and then west of that is the beginning of the high rises downtown. This is kind of a key corner.”