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Long Beach : Agreement Reached on $125-Million Hotel Project

May 02, 1985

A pair of developers, including a giant Japanese construction firm, agreed Tuesday to build a 500-room Sheraton hotel and a 24-story office tower on a prime Ocean Boulevard block just north of the Convention Center.

However, the development agreement, signed by Newport Beach businessman Stanley Cohen and the North American Taisei Corp., stipulates that the board of directors of the Japanese firm must still approve the $125-million project.

The Taisei board is scheduled to vote on the project May 23 in Tokyo, and every indication is that it will be approved, said Cohen, who has held negotiating rights since 1982 on the block bounded by Ocean, Long Beach Boulevard, First Street and Elm Avenue.

"We're very confident that this is coming together," said J. Edward Tewes, city community development director. "We have (the) agreement and we have strong indications from Taisei management and the executive committee of its board that they approve of the project in concept."

Cohen, who also helped develop the new Crocker Plaza office building on Ocean, said the new hotel and 400,000-square-foot office building would be joined by an atrium, which will house retail shops.

Taisei, described by city officials as the largest engineering, construction and real estate company in Japan, would invest about $25 million in the project with the additional $100 million borrowed from financial institutions, said Cohen.

If the deal is sealed by late May, the site could be purchased and cleared by next spring, officials said. Construction would take about two years, said Cohen.

The Los Angeles County Board of Supervisors has unanimously approved a long-term lease for the construction of a $40-million commercial-industrial complex at the former Long Beach General Hospital site.

The complex will be the first major project built under a county-sponsored state law permitting the development of government-owned surplus property by the private sector.

Chief Administrative Officer James C. Hankla told supervisors Tuesday that the complex should net the county between $1 billion and $1.3 billion over the life of the 66-year lease.

The vote ended months of negotiations between the county and the developers, Goldrich and Kest Industries of Culver City and the Sheldon Appel Co. of Santa Monica.

The companies, which will operate jointly under the name Long Beach-Signal Hill Business Center, will build the complex without any capital from the county. A 1988 completion date has been set. The 26-acre former hospital site is at Willow Street and Redondo Avenue.

After the lease ends, the buildings will become county property. The plan calls for construction of 11 buildings.

Profits at the city-run Port of Long Beach were up 43% for the first three quarters of this fiscal year even though income from basic port operations increased just 2.4% compared to the same nine months in 1983-84, officials said this week.

Net earnings through the third quarter, which ended March 31, were $24.1 million, up from $16.8 million for the same period last fiscal year. Profits for all of last fiscal year were about $21 million.

Profit is up so dramatically this year because $2.5 million in costs to move port tenants to new facilities in 1983-84 did not reoccur this year, according to Paul Brown, port finance director.

In addition, the port's cash balance in savings and loans increased from $84 million last year to $109 million this year, yielding about $1.64 million more in interest income. Profits climbed also because losses from depreciation dropped by almost $1 million as old port buildings were torn down.

Revenues from basic port operations, such as leases of port property and tariffs, increased by only $1.07 million, or 2.4%, to $46.35 million during the first three quarters, said Brown. But, as new port facilities are completed during the next two years and all facilities are back in use, profits should jump, he said.

Sharp tariff increases, the first in more than two years, are also expected to increase profitability when they take effect July 1.

Operating costs, including administration, were almost identical to last year's, Brown reported.

The city's crime rate, pushed down by a 12% decline in reported robberies, dipped about 1% during the first three months of the year compared to the same period last year, police reported.

Between Jan. 1 and March 31, 1985, 11,032 crimes were reported in the city compared to 11,123 during the same period last year.

While homicides rose by more than 38%, up from 13 during the first three months of 1984 to 18 this year, car burglaries and grand theft both dropped by about 9%, according to statistics released by Long Beach police.

Petty theft and bicycle theft both fell by about 13%, but assault rose by 5%, up from 333 last year to 350 this year. Reported residential burglaries jumped 6% citywide and commercial burglaries rose 1%.

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