Harbor Lights

Proper property management
by Harry Munns
Published February 21, 2008

Even during more stable times, Redondo’s tiny pleasure boat harbor would qualify as “a work in progress.” There has hardly been a time when there wasn’t some sort of buzz about King Harbor. Re-zoning, land swaps and Heart of the City were preceded by fire, pier construction bond defaults and much, much more. The result of all that history is what grammatical scholars might call a “mish-mash.”

Nowhere is the mish-mash more visible than on a map of who controls the various parcels of land and water within the harbor enterprise.

The pallet created by assigning colors to the individual properties and their proprietors looks like a top-down view of a Crayon box. Fourteen different entities participate in managing more than 20 parcels of land and adjacent marinas.

One color pops up all over the map: The one assigned to the city of Redondo Beach.
You’d expect the city to control the parks, fire station and fishing pier. Some of Redondo’s other properties -- individual restaurants, a patch of dirt and an abandoned building -- seem a little out of place in the city’s real estate portfolio.

The city’s role as property manager has begun to concern folks at City Hall as well as citizens and members of the business community.

In January, Larry Kosmont of Kosmont Companies presented a Pier and Harbor Asset Management Plan to the Harbor Commission. At the heart of the Kosmont study was the question, “Should the city divest itself of its direct tenant leases entirely and trust all harbor enterprise lands to the private sector under ground leases?”

Not surprisingly, property managers seem unanimous about getting the city out of their business. “The city should leave it to private businesses that know how to do it and do it efficiently,” said Sean Guthrie, vice president of MCL Marina Corp.

The Kosmont study wasn’t quite as resolute in its findings. The report focused on five properties including, 655 N. Harbor Drive, Joe’s Crab Shack and the round building.

There weren’t really a lot of surprises in the report. For example, Kosmont said, “…while the harbor area has excellent potential, many of the existing facilities and amenities are tired, aging, disconnected and not sufficiently appealing to much of the mainstream local and regional patrons.”

Spend 15 minutes walking in the harbor area and almost anyone would come to the same conclusion. Such viewpoints have a purpose in the report from a study commissioned by the city. You can bet that sometime in the future someone in city government will justify a decision or action by saying, “According to the Kosmont study…”

Kosmont sees the RB pier and harbor as an “open air shopping center by the sea.” He considers it very similar to a shopping mall. “You have a corridor with the high-end stores like Nordstrom’s. Down another corridor you have the lower-priced shops. Down another one you have restaurants,” Kosmont said.

The Kosmont study broke the issue of the city as property manager into two recommendations. Short-term, the city should “acquire leaseholds on properties where private entities have not produced desired results and reposition the properties.” The long-term advice was to “aggregate leaseholds” and “encourage private management.”

In other words, the city should take control of problem properties, rehabilitate them into productive entities in the harbor real estate community, then turn them over to private companies already engaged in harbor property management.

When he considers King Harbor, Larry Kosmont uses the analogy of an old house that needs more work than the owner is capable of completing. “You get it to a point where someone else can see your vision then you sell it to them,” he said.

If the city follows the Kosmont recommendations, it may preclude the kind of comprehensive redevelopment some citizens believe King Harbor needs. A few of the colors in the Crayon box might get blurred, but the basic make-up of the harbor will remain the same. Kosmont expects the timeline for upgrading the various properties and professionalizing property management in the harbor to be in the 10 to 15 year range.

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