Joshua H. Silavent - Staff Writer
February 12, 2013 – The Long Beach City Council, as the successor agency to the former redevelopment agency, gave its approval in December for the Shoreline Gateway project to move forward after years of starts and stops that left many wondering if the mixed-use residential and retail development in Downtown Long Beach would ever get off the ground. Developers are awaiting final approval from the state department of finance before breaking ground on the initial phase, likely sometime in the third quarter absent a major delay.
The proposed development has been halted on several occasions since its inception in 2004, first because of the recession, which “really changed the economics of the deal,” Jim Anderson, CEO of Anderson Pacific, LLC, told the Business Journal. Later, as the state moved to dissolve the city’s redevelopment agency, the project was delayed another year as the owner participation agreement (OPA) with developer Shoreline Gateway, LLC (a subsidiary of Anderson Pacific) had to be restructured.
The project includes the construction of two towers along Ocean Boulevard between Alamitos Avenue and Atlantic Avenue. Original plans called for the East Tower to go up first, but this has now been scrapped. When the recession hit, the envisioned 35-story condo tower became economically unfeasible to construct at this time, Anderson said. The West Tower is now phase I. As part of the OPA, construction of the East Tower, which Anderson said will be a for-sale property, must begin within two years of completing the West Tower.
An 18-story building with 221 multi-family rental units and 9,500 square feet of leasable retail space, the West Tower “is much more in tune with the market today,” Anderson said. “It will be a real unique and special place downtown,” he added, particularly given its proximity to dining and entertainment districts like Pine Avenue and the East Village, plus easy access to the waterfront. Construction of the $75 million project is expected to take about 21 months and pre-leasing is likely to begin a few months prior to completion.
An original $6 million loan for site plans and drawings for the East Tower development provided by International City Bank has been paid off by the city but remains as part of the latest agreement, Anderson said. He added that as the project becomes successful, Shoreline Gateway would repay the loan, or it could be turned into equity for the city as part of a profit-sharing arrangement. No additional city financing will support the project, Anderson said.
City management reports that selling city-owned parcels to Shoreline, and the subsequent development of the West Tower, is expected to generate $7.46 million in net present value tax revenue over a 15-year period – an estimated $2.14 million more than if the properties were sold on the open market, which would likely result in a five-story project.
“This is a very important corner for downtown,” Anderson said. “[The project] matches the name. It’s a gateway from the east to downtown.”