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Santa Monica Place: Might over Blight and the Bottom Line:

PART II

In Part I, the City Council decided to declare two blocks in downtown Santa Monica blighted in order to embark on a redevelopment project that would result in a new shopping center that would increase tax revenues. Supported by business and development interests and by City Hall, the plan was opposed by many residents. A lawsuit was brought against the City to try to stop the project from going forward.

At the Coastal Commission: “poorly designed, inequitably financed, environmentally unsound”

On Feb 9, 1976 the project came before the Caltfornia  Coastal Commission. More than 70 Santa Monica residents and business people showed up for the hearing held in Torrance.

Tom Hayden, who was running for the Democratic nomination to the US Senate at the time submitted a letter stating that the project “embodies all the drawbacks of urban development; poorly designed, inequitably financed, environmentally unsound and without enough positive value to recommend its passage by the regional commission.” He continued, “It is my belief, and the belief of a broad coalition of residents and consumers in Santa Monica that this redevelopment is not in the best interests of the community.”

Others pointed out that the City’s assertion that the area was blighted was propaganda because the city itself owned one of the two blocks of the redevelopment area; that the plan would have a “direct adverse effect on the coastal environment;” and that traffic concerns and the appearance and landscaping were not addressed.

An initial approval of the local Coastal Commission was appealed by six parties raising questions about energy conservation, access, planning, aesthetics, use of revenue from the project, and the effect on surrounding low income communities.

The State Coastal Commission gave the project final approval on June 11, 1976 — subject to several conditions. The conditions were summarily as follows: (1) to include 10,000 sq ft of open deck space with ocean orientation, (2) a public transit re-imbursement program for mall employees for 30 years, (3) completion of the affordable housing in the Ocean Park Redevelopment Project required for displaced residents before mall opening, (4) a new 4th Street ramp of the SM freeway completed before the mall could open, (5) project heights reduced to 85 feet (from 112) so it would not overwhelm surrounding buildings and the promenade, (6) must meet the day’s newest statewide energy conservation standards.

Prop U: “The City believed enough in the democratic process to put the issue on the ballot…”

With the Coastal Commission hurdle passed, the city moved from the planning stages to the implementation stage. The campaign began for Proposition U, a ballot measure authorizing public financing of the parking structures for the shopping center which the city had committed to provide for the developers.

High ranking democrats in the area opposed Prop U.

The campaign for Prop U spent $6,900.00. The committee against the proposition raised $619.99. The “no” side’s 25 donors, clearly had lower incomes than the “yes” side’s 50 donors who gave not two times as much but ten times.

The six council members who were in favor of the proposition actively campaigned for it and all were donors to the campaign.

Council announced plans for including a Senior Citizen Center in the shopping center three days before the election. Mayor Nat Trives “conceded that he hoped the commitment to locate a senior citizen center would dispel charges being made by some Prop U opponents that the redevelopment project would amount to a ‘rip-off’ of taxpayers.” Donald Brunson, chair of the Commission on Older Americans, “hailed the proposed shopping center as ‘one of the greatest things that can happen in Santa Monica,’ as he began plans for his new senior center and continued to campaign actively among his constituency of high turn-out elderly voters.

Prop U passed by a narrow margin 54:46% of voters, who likely encountered literature in favor of Prop U at a rate of 10 to 1 of that against.

One precinct in Ocean Park where many of the leaders of the opposition lived voted against Prop U by a margin of over 2:1. A precinct north of Montana voted very strongly in favor of U but not by quite so large a margin. One other precinct had a very strong showing in favor of the proposition: that of Donald Brunson, chair of the Commission on Older Americans who was precinct captain and campaigned extensively. Voters in most other precincts were much closer.

Spokesperson for the developer Bruce Alexander had this to say: “The City believed enough in the democratic process to put the issue on the ballot and I would hope that opponents would believe enough in the democratic process to let the project go forward without such nuisance law suits as are now pending.”

The Outlook

R.D. Funk, editor of the Evening Outlook, spoke up on October 22, 1976 in the last piece on the last page of a 12 page special insert on Prop U. He supported the ballot measure and the shopping center overall and took special care to refute accusations that he had greatly benefited from the sale of his large property to the Redevelopment Agency. He simply asserted that “The project is going to be good for Santa Monica and that’s what counts. That’s why we’re for it.”

The City paid the Evening Outlook owners $2,332,396, including $655,896 for fixtures, including a press, which the City planned to resell but was unable to get a single bid on. They did finally sell the press, for which they paid $450,000 for $78,000 to a newspaper in Venezuela. The Outlook built a new building and bought new presses.

The Lawsuit, part II: Judgment

The City, now secure in its funding with the passage of Prop U, turned its attention to the lawsuit brought by Lynda Vitale and Sharon Gilpin.

Superior Court Judge Laurence J. Rittenband (who later heard the Roman Polanski case) ruled that the suit related to interpretation of redevelopment law rather than conflict over facts or events.

If he ruled in favor of the plaintiffs, the project would die. Judge Rittenband ruled in favor of the City. “The question is,” he wrote, “shall we (the courts) substitute our judgment for that of the City if there is substantial evidence to support the City’s actions? The courts are very reluctant to do so.”

And the project moved forward.

Land Acquisition

The cost to the city for acquiring the land was approximately $5 million in land, relocation costs, administration fees, and demolition.

There were 19 parcels, owned by 11 entities, including about 35 businesses and 13 dwelling units. Appraisals were on file and anyone who didn’t accept an offer within 90 days would have their property “taken” under the city’s eminent domain powers.

If the sale of bonds proceeded while a lawsuit was pending, the City would likely have to pay higher interest on them. So council voted to use money from the general fund to front the land acquisition until the bonds could be issued. The first land acquisition deal to be closed was with the  Outlook.

Three owners, representing 12 percent of the land, did not accept offers, in protest, and were subject to eminent domain proceeding. Four of nineteen businesses went out of business as a result of being moved from the redevelopment site.

Bricks, plate glass, lumber, asphalt and scrap metal, as well as fixtures such as toilets sinks and carpets were salvaged from the demolition of the redevelopment site and sold in order to help reduce the cost of demolition.

Lawsuit, part III: “We are not buying those girls off.”

Gilpin and Vitale appealed to a higher court on June 3, 1977. In the meantime, the city sent legal counsel to negotiate a settlement with them. Time was of the essence as the bond issue was beginning. Negotiations were broken off two weeks later by the plaintiffs because “we have concluded that the City will not accept a settlement that will compensate for irreversible adverse effect the citizens of Santa Monica will be required to incur if the shopping center is built.” Council members were angry at the breakdown in talks.

In July, 1977,  Vitale and Gilpin had new attorneys, Peter Wallin and Ed Dikes, who both had solid experience with redevelopment law. The reasons for the Legal Aid Foundation giving up the case are unclear to this day.

During a special meeting of City Council, a sum of money to “expedite” the lawsuit was allocated. No one offered an explanation of “expedite” except to assure them that they weren’t negotiating. “No way, I can promise you it is not a settlement. We are not buying those girls off,” said Councilmember Christine Reed.

In November it was the City’s turn to change counsel when Eugene Jacobs sent in his letter of resignation. Apparently Jacobs divulged an appeal deadline to the plaintiffs. The city found this inexcusable but Jacobs felt it was ethically unavoidable. City Attorney Richard Knickerbocker took over the job in-house. Another outside firm, Kaplan, Livingston, Goodwin, Berkowitz and Selvin, would take over the pending appeal.

In January 1978, negotiations for an out-of-court settlement resumed. Gilpin and Vitale were no longer represented by an attorney. But, at the very end, attorney Rosario Perry walked down to city hall to represent them in the final play of the negotiations to ensure that the final agreement reflected the terms they had settled on.

The Settlement: “Petty blackmailers…leading the city into becoming a slum.”

A settlement was finally reached on January 24, 1978. The city would devote 20% of surplus tax revenue from the project (after bond payments are made) to rehabilitating low-income housing for a period of 30 years. Two pocket parks were to be built on city-owned lots at Broadway and Park Drive and at Cloverfield between Santa Monica Boulevard and Broadway. $50,000 would go toward child care payments for needy families through Family Service of Santa Monica. $50,000 would go to the newly established Sojourn House, a battered women’s shelter at 245 Hill Street and would provide employment training there through a federal program. The City was to establish 10 depository stations for recycling. Of a $1.3 million community block grant due the city, $600,000 would go to housing rehabilitation.

Council member Perry Scott voted against the agreement, stating that the terms amounted to harassment. Council member Nat Trives felt that the “settlement represents a small amount of money for the betterment of the community,” adding that the City was already committed to many of the issues.

Some homeowners attended the City Council meeting to protest the city’s adoption of the settlement. In particular, they opposed the money that was to be set aside for affordable housing. One speaker accused the “petty blackmailers of leading the city into becoming a slum.”

Today, the state requires that cities set aside a full 20 percent of all redevelopment increments for affordable housing; the Vitale/Gilpin budget item, ahead of its time, is satisfied by that allocation.

Santa Monica Place in the Sun

The shopping center would open one year later than originally planned: October 1980. It was 95 percent leased at its opening.

In February, 1981, four months later, sales per square foot were running $200 above the national average of $135 for shopping centers.

The center was plagued by parking and traffic problems as soon as it opened. Floods of people came off the Santa Monica Freeway. Signage to direct traffic down alternate routes and traffic light adjustments were implemented. Residents still struggle with the traffic impacts of Santa Monica Place today.

The Arizona Farmers Market, an instant success, opened the summer after the shopping center to try to enliven business on the Promenade, which was struggling as anticipated by business owners there.

In 1988, Rouse announced that it wanted to upgrade the stores in the shopping center to a more upscale fashion conscious group of businesses. Sales had been trailing since 1986 as new shopping areas became successful — such as Montana Avenue, Main Street and shopping centers in other parts of LA.

Redevelopment Again

Santa Monica’s downtown commercial core has been in existence since 1875. For nearly a century, it flourished without interference. In the past 40 years, the Third Street Promenade has been dramatically rebuilt twice, according to fashionable retail models of the day and upgraded further in 2002 with the implementation of the “transit mall.”

Santa Monica Place, using the trendy enclosed mall model of the 1970s, was meant to be the final fix for the downtown economy and was pushed through by an adamant City Council. It experienced a downswing and overhaul in its first decade. Ten years later, the current owners would like to tear it down and begin again, using the latest urban mixed use model in which retail, housing and open space are all piled in to a narrow, vertical configuration.

Let’s not, once again, attempt to outpace the natural growth of the economy using trendy planning models. This time, the project could be so large and so expensive that when it too goes out of fashion and ceases to be profitable, our city will have to live with it disrupting the skyline forever. Let’s craft a solution unique to Santa Monica with its fantastic setting, character, history and people, a solution with the agility to survive many fluctuating economic cycles.Nina Fresco is Chair Pro Tem of the Santa Monica Landmarks Commission.

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