“The Long Beach City Council is not pro-business or business friendly,” he said. “I think there are some councilmembers who don’t understand how the economy works – they don’t understand that time is money for a developer, so more delay means more cost.”

Is the December 20 decision by the council to nix the $320 million mixed-use development project, for which property owner Raymond Lin of TakiSun Inc. had already invested more than $4.5 million, an example of the stance the city is taking on new development?

Developer David Malmuth, and Lin, wouldn’t say the city is anti-business. Instead, they said the “no vote” sent a clear and negative message to current and prospective business owners.

“You can’t answer that definitively,” Malmuth said. “I think in this instance, we were told that this project would be evaluated on its merits and we played by the rules – the rules that we were given by staff, the council office and councilmembers themselves and, ultimately, the project was not evaluated on its merits. . . . That right there is sending the wrong message to business owners.”

Malmuth, who first attempted to work with Long Beach in the early 1990s, spent four years and $10 million planning the ill-fated DisneySea theme park for The Walt Disney Company. When the project, which called for a $3 billion resort of six hotels, a cruise ship terminal and an amusement park, failed to get off the sand in Long Beach, he picked himself up and presided over the highly successful renovation of Disney’s New Amsterdam Theatre in New York.

But eight years ago, Malmuth, whose father started a business in Long Beach, a city he said he loves, had a chance at another project and he didn’t flinch.

“I had driven by the site multiple times and remember thinking, ‘Boy, there has got to be something better than that hotel.’ A hotel that at the time was deteriorating and has deteriorated a great deal since,” he said. “My thought always had been that this is a fantastic location for a mixed-use project, that would support retail, residential and a hotel. Then given the fact that it is a gateway site, it seemed to me that it really deserved special attention, and it was too important to just put up another big box.”

But in his second go-around with the Long Beach City Council, Malmuth walked away feeling the same way – devastated.

“This brought up a lot of those old feelings, and not in a good way,” he admitted.

Though Malmuth has had two major projects fail in Long Beach, he said they were under very different circumstances.

“DisneySea really had a lot of supporters, there were certainly opponents, but there were more supporters and I think people felt it was a unique opportunity for Long Beach to do something great. The reason it didn’t proceed was really not about the City of Long Beach, it was really Disney and Disney’s internal issues, more so than anything the city did or didn’t do.”

That being said, Malmuth noted it was a very difficult time for him, much the same way that this has proven to be a trying time.

“It was hard,” he said. “The Walt Disney Company spent almost $10 million in almost a four-year period and, ultimately, had to conclude that the project was not going to move forward ... that was devastating at a personal level, professional level and it was 20 years ago, but it seemed very present after this last blow.

“It is devastating. We are not doing this for the practice, as Raymond [Lin] said, we are builders and that is what we want to do, we want to create something that produces a great place for the city and does so in a way that is environmentally responsible and financially successful.”

Malmuth quoted Mayor Bob Foster, who said at the December 20 council meeting that “someone would be severely damaged by the decision that is made ...”

“Well, that somebody was us. We were severely damaged, the community, the city, we were all severely damaged,” he said. “What kind of message does this send to the business community when a development team of Long Beach people goes forward, spends four years, reaches out to thousands of community members, gets tons of support, builds a great project that will deliver all kinds of benefits to the community and takes it to council and then ultimately that project is denied not because it’s not a worthy project, but because the rules change. How can people do business in that environment?”

DeLong agreed.

“Mr. Malmuth is right in saying that the project wasn’t judged fairly,” he said. “It is my opinion that the project should have moved forward, and I voted that way.”

And he pointed to the decision made four years ago by the city council to not update SEADIP [the 30-plus year-old Southeast Area Development & Improvement Plan], and instead evaluate projects “one-by-one as they are proposed on merit alone.”

“I disagreed with that decision at the time, and still do,” he said. “It isn’t fair. You can’t tell a developer to bring the project forward and that it will be judged on its merits and then tell him later that he went about the process in the wrong way. That isn’t fair.”

The project proposed plans for a 12-story, 150-foot high building with retail, residential and hotel use, along with 155,000 square feet of upscale retail, a science center, elevated open spaces, public art, 1,400 parking spaces and other features.

“I would support this project again if it comes back before the city council,” DeLong said. “That being said, I do believe that it is incumbent on the developer to come in with a revised project, but I do intend to support it. The community wants to see a development and it is our responsibility to make it happen. If we don’t come up with a viable project, we fail.”

While DeLong supported the project, he did not, according to some in the development community, step up to the plate or go to bat for it as he could have. And Malmuth said that “the reality is, without a champion for your project at the political level, you will never get traction.”

Malmuth and Lin are still unsure what course of action they will take as far as bringing the plans back to life. But Malmuth said during the public comment portion of the January 10 council meeting that they “sense there is an opportunity to go back and talk with councilmembers and see what modifications to the project might make sense.”

The duo said they have been approached by councilmembers and others who have said they “really need to think about how to make the project work.” That being said, Malmuth admitted to walking out of the December 20 meeting feeling “frustrated and upset and not wanting anything to do with the city.”

“It is not the best thing for the city, for us or our supporters to walk away from this; there is still an opportunity to try to come to a solution, but we don’t know what it is right now. But to not at least give that an opportunity to emerge, we sell the city short and we have never done that. If anything, we have been too ambitious,” Malmuth said.

One of the most frustrating parts of the entire process for Malmuth was that this was a project produced by a Long Beach team, by people he said have deep roots in the community.

“Our support comes from the people that live here. How many times do we see a development project that has 70 percent support?” he asked. “We aren’t giving up yet, but we don’t even know what that means. We are evaluating our options, we think this is a terrific project and we don’t want to see it die. We hope it is doable because we think there is much more to be gained by something being done here than by nothing.”

DeLong seconded that sentiment saying that he thinks the city council failed nearly a month ago when it voted 5-3 to kill the project. Councilmembers Suja Lowenthal, Patrick O’Donnell, Gerrie Schipske, Dee Andrews and Steven Neal voted against it.

“It was a failure to not approve some type of project at this location, especially seeing that the overwhelming majority of residents wanted to see something done,” DeLong said. “I don’t know that we will necessarily approve a project as large or as tall as the developer wants, but we do need to make an effort to find some compromise that works for everybody.

“But bottom line is, it was a failure at city council. We need to find a project that works for the developer, creates jobs for residents and creates tax revenue for our city.” The project was estimated to pump $2 million annually into the city’s general fund through sales and utility taxes and other fees and permits.

Lin, who with his sister, Amy, has been leasing the property since the early 1990s and purchased the land in 1999, said he is still frustrated by the vote, but is willing to give the council another chance in hopes of keeping his dream alive.

“This is our dream,” Lin, who has lived at the hotel with his wife, Tiffany, since 1997, said. “We have been involved in this property for over 20 years, so why would we walk away now? This is our dream. You know we were very shocked, very sad that we were turned down, but are hopeful that we get a second chance to bring this back to the table and hopefully find some way to get the project off the ground.” Lin said his verdict is still out on whether Long Beach is business-friendly, but said he would love to be a part of the business owners in the city who can say to those interested in doing business that “Long Beach is a great place to start a business and family.”

Some, including DeLong and Malmuth, said the recent 7-0 vote by the State Supreme Court to eliminate all redevelopment funding, is yet another reason to not only reconsider this process, but change the way the City of Long Beach works with business.

“We definitely, as a council, need to make more of an effort to be business-friendly,” DeLong said. “We need to bring new projects into the city. We need to streamline our building and planning process wherever we can and try to get projects through faster. On top of that, we also need to try to reduce cost where we can so we can be as business-friendly as possible.”

Malmuth pointed to Foster’s State of the City address on Monday night, January 9, in which the mayor stated that “the likely end of redevelopment in the city means the city has to work that much harder to entice private investment and private development.”

This statement came across as quite ironic to Malmuth given what happened to the second+pch project.

“We think the city is going to have to re-look at projects like ours if it is going to find opportunities for significant investment to have in the city,” Malmuth said. “I just don’t see that there is a long line of developers that are waiting to invest $300 million into projects. The climate over the last couple of years has been horrible in the development business. That being said, it’s extraordinary on many, many different levels that Lin and his family have been willing to continue to put money into this project given the tremendous amount of uncertainty.”

Malmuth said that often times, “people use this big bad brush to paint developers, but that’s not fair. We have made huge sacrifices trying to make this successful and we did it not because we were chasing big dollars but because we were chasing a big dream.

“As a life endeavor for me, it is really worthwhile to spend my time trying to do things and transform places, because I remember what people look like when it is dead and degraded and what they look like when it is alive and vibrant,” he said. “You can see it on their faces, and I see what people look like when they walk around this property. I see the thought bubble of them saying, ‘Wow this is the best Long Beach can do?’ So to be denied the chance and opportunity to work with a great team of people and a community to do that it is really a great loss.”