Mailbag: Pacific City leaves sea of questions

Pacific City, LEED, Little League, Angela Rocco DeCarlo, Paul Cross, Makar Development

Now that the dormant Pacific City project on Pacific Coast Highway is showing signs of life, it is all but certain that a prior $20-million promise of Pacific City for funding of a new senior center will not come to fruition. It should not be forgotten that Makar, the former owner of Pacific City, expended a considerable amount on non-LEED-certified design and engineering studies for the center. Is the city legally liable for those expenditures?

In this regard, the project initially was touted by some as being free to the city of Huntington Beach because it was to be built on five acres of city parkland with the building expenses to be absorbed by Makar. Underpinning the promise was an anticipated Makar obligation of $20 million in park fee obligations flowing from a project density of 516 condominium units. In the amazing world of corporate finance, the new owners of Pacific City will construct the same number of units, as apartments, and apparently will end up paying considerably less than $20 million and nothing at all until "final inspection" on a building-by-building basis.

The carrot offered by the city (dense development) continues to exist, but the reward to the city is much diminished. As well, under the arrangement presently proposed by the new owner, another reward to the city of a new hotel and retail development along PCH need not start construction until at least half of the apartments that can be converted to condos have been constructed. The city could impose penalties if the hotel and retail construction subsequently are not initiated, but as time passes, the city, anxious to end its embarrassment over a gaping hole along PCH, likely would agree to additional demands from a developer. I suggest that the city hold fast to the requirement for simultaneous construction of dwelling and commercial components, although there might be some give on the exact mix.

Paul Cross

Huntington Beach

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