The Santa Ana City Council will be conducting a Public Hearing on Monday, at the end of their Council meeting, regarding the proposed amendments to the developer agreement with Mike Harrah, regarding his One Broadway Plaza project.
Click here to read the Public Hearing Agenda. Click here to see the entire City Council agenda for Monday’s meeting.
The Planning Commission approved the proposed amendments at their meeting on June 14, by a 3-2 vote. Acosta and Yrarrazaval opposed. Alderete and Betancourt abstained.
The amendments include:
- Deleting the 50% pre-leasing requirement.
- Allow Harrah to apply for Redevelopment Funding.
- Adust the timing of the funding for neighborhood traffic studies.
- Allow additional time to refill any excavated area.
- Delete the minimum 51% ownership interest provision.
I am not sure about the redevelopment part of this, but the rest of it isn’t unreasonable. I would however like to see our City Council press for more changes to the Developer Agreement, as follows:
- Let’s allow Harrah to build condos as well as offices in his tower. Wouldn’t that be neat for executives to finish work and then take the elevator to their condo?
- Why not build an observatory on the roof? Maybe we can get UCI or CSUF to help fund it and manage it. What a boon it would be to our scientific community! And what fun for the rest of us.
- How about building a public park atop the building? What a view!
- Can we renegotiate the size of this building? Perhaps 60 floors instead of 88?
This project will bring jobs and economic growth to our city. I don’t mind Harrah bringing in partners and I would love to see him build a mixed-use project instead of offices only. I don’t think he should go down the redevelopment road – but if he wants that money then how about some affordable living units in the tower too?
City staffers are recommending that the City Council approve the amendments. Their report notes that the project qualifies for LEEDS silver status, which means it will be built to save energy. The report also states that of the 13 large projects that have been submitted to the City for approval in the past five years, only two have been built – CityPlace and the Skyline Towers.
The City Council meeting will start after a closed session meeting at 5 pm, at Council Chambers, located at 22 Civic Center Plaza.
Our city should not be cutting “deals” with Mike Harrah for many reasons, the first and foremost is that we VOTED on this building and the conditions for building it (at great expense to both sides) and I don’t believe the city should just “change” those conditions and neither should you if you believe in democracy. For more on this read attorney Julie Humphreys excellent letter to the planning commission;
City of Santa Ana
Planning Commission
22 Civic Center Plaza
Santa Ana, CA 92701
Re: AMENDMENT TO DEVELOPMENT AGREEMENT NO. 2004-01
Filed by One Broadway Plaza LLC, to modify certain provisions of the development agreement to delete the 50 percent pre-leasing requirement; to allow the applicant to request assistance from the Redevelopment Agency; adjust the timing of the funding for the neighborhood traffic studies; allow additional time to refill any excavated area; and to delete the minimum of 51 percent ownership interest provision for the One Broadway Plaza (OBP) office tower at 1109 North Broadway.
Dear Planning Commission,
I strongly object to the above request to amend Development Agreement No. 2004-01. The 50% pre-leasing requirement, the private funding, the promised neighborhood traffic studies and improvements, building & excavation timelines, and OBP ownership interest were all integral parts of the Development Agreement that was previously approved, not only by the city, but by public electorate in a city-wide vote. Because the residents of the City of Santa Ana—in a public referendum—voted to approve this development as represented in Development Agreement No. 2004-01, I seriously question whether the Planning Commission has the authority to modify the Development Agreement that was fundamental to the voters’ approval.
It is quite clear from the information on the ballot that the voters were approving the project and other changes the construction would bring based upon these significant protections and assurances contained within the Development Agreement. From the voter pamphlets to the language of the referendum itself, the voters knew that in order to prevent the building of an empty, un-leased building—or one filled with relocated government tenants—the developer would have to pre-lease the building 50% with “class A” tenants prior to construction. The voters knew that the developer was required to provide significant traffic improvements (and studies) prior to construction. The developer traded on his ownership and commitment to the project in obtaining City Council and voter approval for the project. And, last, but not least, the voters knew that this was a privately-funded project and that they were not being asked to use public funds to build this project. Each and every one of these elements was fundamental to obtaining prior approval for this project.
All of the grandiose promises of this proposed development have come to naught. Yes, there is now an empty lot, but better an empty lot than an empty building. And if the plan is simply to relocate public agency tenants from other downtown buildings to this one—there would be no net growth for Santa Ana, and a lot of empty buildings.
The residents of the City of Santa Ana will have to live with this project long after any temporary construction jobs it may create have ended. If the project does not make financial sense as a private venture, it makes even less sense to use precious Redevelopment dollars—the public’s money—to invest in this failed, private business venture. The prospective tenants of this project have all spoken: there is simply no interest in leasing new office space in this location. Moreover, this is not the only way for the city to create jobs. There is a glut of unused office space in this city and this County, and it would be irresponsible for the city to pour public funds down this private trough when there are so many other real public needs and many more worthwhile public projects that would benefit more city residents—any one of which will also create jobs.
VOTE “NO” ON THIS PROPOSED AMENDMENT.
Sincerely,
Julie Humphreys
Secondly, Mike Harrah is a TERRIBLE business man, just look at The Performing Arts Center that he built, at the time he bragged how he had spared no-expense on the place, eventually spending 22 million dollars on it;
“Harrah said he had budgeted $5 million for the theater. He’s up to $22 million. “We’re a little over,” he said, smiling and gathering his long grayish beard, flecked with red at its tip.”
FYI, he’s now trying to sell the white elephant to OCHSA for 13 million, only a 9 million dollar LOSS and I’m sure he has been hemorrhaging money every month for the last 5 years running the place, I knew when I first heard about the 22 million that this place could NEVER support that kind of investment, so why didn’t he? Because it was a VANITY PROJECT, just like OBP.
Mike Harrah also has a very sketchy financial history and you know the old saying “If you lie down with dogs don’t complain when you have fleas”. I’m sure Mike Harrah would have no-problem saddling our city with another white-elephant vanity project;
From the LA Times (1990);
Once-High-Living Tustin Developer Files for Bankruptcy
Debt: Michael F. Harrah, who formerly owned a theme attraction near Lake Havasu and collected classic cars, is claiming almost $30 million in liabilities.
SANTA ANA — Flamboyant Tustin developer Michael F. Harrah–former owner of the English Village theme attraction near the London Bridge at Lake Havasu, Ariz.–has filed personal and business bankruptcy petitions in federal court here, claiming nearly $30 million in liabilities.
Harrah listed only about $8,000 in personal assets and the unspecified value of his 20% interest in the Ramada Lake Havasu resort hotel owned by Harrah Corp. Unlimited as his only business asset.
In his personal filing, Harrah also listed an unspecified debt to the Internal Revenue Service for unpaid federal income taxes from 1985 through 1989.
His attorney, Don Teague, said Harrah–once a high-living multimillionaire–currently lives in a rented home in an unassuming mixed residential-commercial neighborhood in central Garden Grove.
Harrah, who listed a business address in Tustin but who works out of the offices of a Fullerton-based building company, could not be reached for comment.
The 6-foot, 6-inch developer listed numerous lawsuits and judgments by developers and former business associates among his liabilities.
Teague said that in filling out the bankruptcy filings, he listed every possible debt and claim “because we didn’t want to leave anything out.” Thus, he said, Harrah’s personal and corporate liabilities were likely overstated.
A review of some of those debts bears out Teague’s disclaimer.
The suits and claims apparently stemmed mainly from disputes over payments for or performance on various development projects, although the largest is a claim for $10 million in damages by Orange County restaurateur Geril Muller.
Muller is suing over Harrah’s use of the name Ambrosia for a short-lived restaurant he opened in Costa Mesa in 1986. Muller founded the original Ambrosia in 1975 and operated it until 1985.
Harrah later leased the facility from Muller and opened his own restaurant, where the menu featured buffalo and alligator steaks and where a special space was set aside for Harrah to display vehicles from his classic car collection. That collection apparently has been sold, as Teague said Harrah’s only vehicle is a late-model Dodge pickup truck.
In at least two cases, debts listed by Harrah no longer are owed, or even claimed, according to attorneys for the companies listed as creditors.
anonster,
Wow! You are up early and thinking clearly. Thanks for contributing your comment to this post.
It is an unusual situation in that the city clearly has the right to alter development agreements, but as you pointed out this project was voted on.
The agreement, as it stands, is unusual, which the city staff pointed out in their notes re the public hearing.
It is not uncommon for developers to go broke then get back on top again. Donald Trump is in that number. I am not defending Harrah, just pointing out that the straits he is in are shared by many developers, particularly now with our economy in the tank.
I think that the sale of the performing arts center to OCHSA is a boon for them – and if they are getting such a steep discount all the better.
That is the thing about Harrah, his hands are not clean but he has done a lot of good for the city, even if it has at times been inadvertent.
As you stated, the voters DID approve this project. Their intent is clear. I think that speaks volumes. For the record, I did oppose it. At this point however, with our city’s budget in tatters and very red, I am open to doing whatever we can to create jobs and expand our tax base.
I do have reservations about the amendments – in particular I don’t think redevelopment funds should be granted to Harrah. And I would like to see him granted a mixed use permit so he can include condos in the building as well as offices.
Well, its done! its finally going to get built! i think we need MORE of these types of developments.