Thursday, November 3, 2011

WTC Owners Seek to Break Long Beach Port Deadline on HQ Purchase

With the clock ticking on the Port of Long Beach's purchase agreement to buy the World Trade Center in downtown Long Beach as a new headquarters, the current owners of the building are seeking to break the port governing board's deadlock on the $130 million deal.

Legacy Partners, the current owners of the 27-story office building, have taken advantage of an extension in the 60-day agreement to extend the deadline to Nov. 15. The previous deadline had been set to end the agreement earlier this week.

Legacy has also taken steps to break the 2-2 deadlock on the five-member port board due to one commissioner's recusal on the vote.

The port has been seeking to replace its circa-1959 headquarters building – determined to be seismically unfit – for nearly a decade. The WTC is one of several properties that port management have considered over the past year as a possible location to move the more than 450-member port staff.

The port had planned to internally fund and build a $220 million state-of-the-art "green" headquarters in the port, but Long Beach Mayor Bob Foster shot the plan down last year as too expensive, despite no planned expenditures of taxpayer funds. Since the mayor's decision, the port has been looking to lease or purchase a nearby office building to house the port staff.

In preparation to purchase the WTC, the port entered into a 60-day due diligence agreement with Legacy on Sept. 12.

Despite approving the 60-day agreement, the two freshmen commissioners on the port board – Rich Dines and Doug Drummond – have since blocked moving forward with the purchase. Commissioners Thomas Fields and Nick Sramek have voted to move forward with the purchase, but Commission president Susan Wise has been forced by the City Attorney to recuse herself from the vote because she subleases an office space in the WTC from her husband. This has left the port board in a 2-2 deadlock over the purchase of the WTC.

Dines and Drummond have said that they would prefer the port to purchase land and build a new headquarters building in downtown. The only properties offered up that meet these criteria are owned by Skip Keesel, a prominent Long Beach attorney and a major supporter of Mayor Foster.

Dines and Drummond, who were appointed to the port board by Mayor Foster earlier this year, have both indicated that they support a new direction for the port that places more emphasis on following the direction of City Hall. Technically the port functions as a semi-autonomous department of the city, though recent moves by Mayor Foster have sought to reign in that autonomy.

Legacy asked City Attorney Robert Shannon to reconsider his opinion that Commissioner Wise must recuse herself from voting on the WTC deal, but earlier this week Shannon declined to change his opinion or extend the deadline.

Legacy has also asked the state Fair Political Practices Commission – which operates as the final voice in government conflict of interest situations – to assess the situation with Commissioner Wise. The group has requested a speedy hearing from the FPPC.

Commissioners Dines and Wise are out of the country on a trade mission and are not expected to return to the US until Monday at the earliest. However, if neither can make it to the Monday board meeting, it would leave the possibility of a three-member quorum vote on the issue, with the already stated positions of the remaining commissioners giving a 2-1 edge in favor of purchasing the WTC.

If no vote is taken Monday, the final full meeting within the deadline period would be Nov. 14.