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Owners of Ailing Shoreline Village Consider Filing for Bankruptcy : Financing: Investors have 35 days to pay $430,000 in overdue rent. City is negotiating for a settlement.

July 14, 1994|JOHN POPE | SPECIAL TO THE TIMES

A decline in tourism and the closure of one of Shoreline Village's anchor restaurants last year have led owners of the downtown waterfront shopping and dining complex to consider filing for bankruptcy, officials said.

Shoreline Village Associates, a group of investors that leases the property from the city of Long Beach, owes about $430,000 to the city for nine months' rent. It also is behind on loan payments to another creditor, said general partner Michael Lapin, but he would not disclose any details.

Long Beach City Manager James C. Hankla said the city sent the group a default notice on July 7, which gives the investors 35 days to make the rent payments.

However, Hankla said city officials are negotiating with the group for a possible settlement. He would not elaborate.

"We're trying to be supportive," Hankla said. "They are good operators who got caught up in a cash-flow problem."

The investors may seek protection under Chapter 11 of the federal bankruptcy laws if an agreement with the city cannot be reached, Lapin said. The group negotiated a 50-year lease with the city when Shoreline Village opened in 1983.

Although his group does not keep figures on tourism at Shoreline Village, Lapin said, sales have dropped there since 1992.

The development, a 60,000-square-foot complex with 30 outlets near the foot of Pine Avenue, now has three vacant shops, more than any time in its 10-year history.

Lapin blamed construction at the Long Beach Convention Center and the state's recession for declining sales at the shops. And, he said, his group could not recover financially after a key tenant, the Mardi Gras restaurant and night club, closed its doors last year.

The Mardi Gras--along with Parker's Lighthouse restaurant--were anchor tenants at each end of Shoreline Village.

The Mardi Gras was usually packed with customers until closing time, Lapin said, but its parent corporation, International Onion Inc., had severe financial problems and eventually went out of business. The company also owned the now-defunct Red Onion restaurant chain.

When it closed, the Mardi Gras was 10 months behind on its rent payments, Lapin said, and several more months passed before a new tenant, the Cantina Tiburon restaurant, was found, Lapin said.

Marj Rankine, owner of the Scottish Heritage Center gift shop at Shoreline Village, said that the expansion that closed down the Convention Center for two years hurt her sales.

"It hit us very badly," she said. "The business conventioneer is a very big part of our customer base."

Rankine said she is looking forward to October, when conventions will resume with a three-day League of California Cities conference. Officials expect more than 2,500 to attend. Convention Center officials said the expansion will allow larger conferences and more tourists to help the local economy.

"I can literally look at my sales receipts to see when there were big conventions in town," Rankine said. "The village is suffering now, but the future does look brighter."

Shoreline Village is a key component of a waterfront redevelopment project called the Queensway Bay Plan, which proposes adding more shops, restaurants, hotels and an aquarium in the area.

Queensway project manager Robert Paternoster said Shoreline Village's financial problems "certainly aren't going to help the plan, but hopefully they won't have an adverse effect either."

Paternoster said the overall waterfront expansion and the now-completed renovations of the Convention Center will boost tourism. "The (complex) is still viable," he said.

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