Santa Monica Mirror: Jun 20 - June 26, 2024

Tech Entrepreneur and Developer Company Buy Promenade Shops for $103M: Report

Acquisitions

Include 1202, 1222, 1225, 1232, 1339, and 1344

Third Street Promenade

Federal Realty Investment Trust has sold eight parcels along Santa Monica’s Third Street Promenade to two buyers with core businesses outside real estate, according to a report by The Real Deal.

Tech entrepreneur Daniel Negari, founder of XYZ.com, acquired seven parcels for a combined $84.5 million. United El Segundo, a gas station operator turned developer, purchased the remaining parcel for $19.5 million.

Negari’s acquisitions include 1202, 1222, 1225, 1232, 1339, and 1344 Third Street Promenade, along with 301 Arizona Avenue. His most expensive purchase was the 24,600-square-foot building on Arizona Avenue, priced at over $900 per square foot, one of Santa

Monica’s highest commercial deals in the past year.

Real Deal reported that Negari used approximately $61 million in loans from the Royal Bank of Canada for the acquisitions. The Arizona Avenue

building is currently 50 percent vacant, according to online listings.

Negari is not new to Santa Monica real estate; he bought 310 Wilshire Boulevard for $9.4 million in 2018.

United El Segundo purchased 214

Wilshire Boulevard, a 31,000-squarefoot building occupied by Wally’s Wine. The company recently proposed a 29,000-square-foot office building on Sunset Boulevard, featuring a digital billboard wrap.

Michelin-Starred Chef James Kent Passes

Away, Saga Hospitality Group Announces

Chef Kent Is Remembered for His Culinary Excellence and Charity Work

The Saga Hospitality Group announced the death of Michelin-starred chef James Kent on June 15 with great sadness on its Instagram. Chef Kent is survived by his wife, Kelly, son Gavin, and daughter Avery.

Chef Kent was the creative mind behind Pacific Park’s newest food destination, Snackville, at the Santa Monica Pier.

The statement said, “We are heartbroken to share that James Kent passed away unexpectedly earlier today. The Saga Hospitality Group family is focused on supporting each other and, most importantly, Kelly, Gavin, and

Avery as we grieve James’ loss.”

Jeff Klocke, General Manager at Pacific Park on the Santa Monica Pier, said in an emailed statement, “It is with profound sadness and a heavy heart that we acknowledge the sudden passing of our partner and friend, Chef James Kent. He was a valued member of our Pacific Park team and contributed immensely to our culinary vision of the amusement park. We extend our deepest condolences to his family, friends and colleagues.”

James Kent was executive chef and owner of Crown Shy and Saga restaurants, both located in the landmark Art Deco building at 70 Pine Street in New York’s Financial District. Crown Shy, the first of those restaurants, opened in March 2019. Just six months later, the restaurant was awarded a Michelin star. Saga, a fine-dining restaurant in the tiered spire of the building, opened in August of 2021. In October 2022, Saga was awarded two Michelin stars. One floor above Saga is Overstory, a cocktail

bar ranked 17 on the list of the World’s 50 Best Bars.

Kent was an active supporter of a number of charities working to eradicate childhood hunger in New York City, including No Kid Hungry and ReThink Food, for which he sits on the Chef’s Council. Kent has twice co-chaired the annual Chef’s Benefit dinner for Cookies

for Kids Cancer, a nationally recognized organization that provides funding for pediatric cancer research. He was a mentor for the Ment’Or organization devoted to inspiring culinary excellence in young professionals and preserving the traditions and quality of cuisine in America.

Slain Jameson’s Pub Manager Described as a “Provider and Father Figure” by Loved Ones

His Last Days Were Spent Taking His Niece and Nephew Out for Ice Cream

By Zach Armstrong

Family members, friends and coworkers of Jay, the late Jameson’s Pub manager who lost his life last week after trying to break up a fight outside the bar, are mourning the loss of a man they describe as a compassionate provider.

In the early hours of June 11, a brawl erupted once the pub’s manager asked patrons to leave. A man involved in the

altercation, 26-year-old Leonard Hector Korpie of Venice, punched Jay amid the altercation. Once officers arrived, the manager had lost consciousness and was not breathing.

Jay was then transported to a nearby hospital, where he succumbed to his injuries.

All three patrons involved in the incident were initially arrested and booked at the Santa Monica Jail, according to SMPD. L.A. County district attorney’s office filed a homicide charge against Korpie, who was reportedly being held on a $2 million bail.

A GoFundMe has been created for Jay’s family as they mourn his loss. At the time of this writing, it has raised just north of $11,000 out of its $20,000 goal.

“Jay meant the world to so many

people and in an instant, he was taken away from us.” the GoFundMe post states. “He was an amazing brother, uncle, cousin and friend. Jay went to work at Jameson’s Pub, doing what he loves, and we never thought we wouldn’t see him again.”

After losing his father at a young age, Jay took on the role of a father figure within his family by raising his baby sister, helping his brother and caring for his mother when she became ill, the post states.

Just like his siblings, Jay’s niece and nephew loved spending time with him. His last days, the post states, were spent taking his niece and nephew out for ice cream, along with enjoying time with them and his sister.

“This senseless act of hate has

immensely devastated a family that was full of love and joy.” the post goes on to say. “Our hearts are forever broken and our family will never be the same without the patriarch of the family.”

Judge Blocks Barrington Plaza Evictions, Citing Legal Violations

Owner Douglas Emmett Inc.

Sought

to Evict Nearly

600 Tenants

Last Year, Citing Safety Upgrades

The eviction of hundreds of tenants at the Barrington Plaza apartment complex failed to meet state and local legal requirements, a judge tentatively ruled last week, as reported by the Los Angeles Times.

Owner Douglas Emmett Inc. sought to evict nearly 600 tenants last year, citing the need to install fire sprinklers and other safety upgrades following two major fires. Since the eviction notices, hundreds of residents have left,

but more than 100 remained and the tenants association filed suit, claiming the evictions were unlawful. They emphasized their fight to preserve rentcontrolled apartments in an increasingly expensive neighborhood, the L.A. Times reported.

Superior Court Judge H. Jay Ford III’s tentative ruling allows the tenants to stay in their homes. The civil case trial occurred in April at the Santa Monica Courthouse.

Two laws were pivotal: the Ellis Act, which permits landlords to exit the rental business, and the Los Angeles Rent Stabilization Ordinance, which controls rent increases and outlines Ellis Act applications. Ford ruled that the owner did not meet the requirements of either law.

The judge found that Douglas Emmett Inc. intended to renovate and re-rent the units, not remove them from the rental market. The company can still contest

the ruling, which is not final.

The L.A. Times reported the Barrington Plaza Tenants Association as celebrating the ruling by stating, “This

victory is a testament to the strength, resilience, and unity of our community. The court has recognized our rights and ruled in our favor.”

Acclaimed Sandwich Pop-Up Opens Flagship Store in Santa Monica

Bread Head Was Launched by Chefs

Alex

Williams and Jordan Snyder

By Zach Armstrong

Bread Head, a Los Angeles eatery known for various pop-up locations, has established its flagship restaurant location in Santa Monica near the intersection of Montana Ave. and 16th St.

Its menu boasts several sandwich options including the Muffaletta (Fra’mani Salami Cotto, Mortadella, Pit Smoked Ham, Provolone, Swiss, Castlevetrano Olive Salad, Garlic Mayo), the Calabrian Turkey (RC Provisions Roasted Turkey Breast, Hooks 1 year Cheddar, Iceberg Lettuce, Calabrian Mayo) and the Combo Grinder (Fra’mani Salami Cotto, Hot Coppa, Pit Smoked Ham, Aged Provolone, Pepperoncini, Iceberg Lettuce, Tomato, Red Onion, Roasted Peppers, Everything Spice, Lemon Pine Nut Spread, Red Wine Vinaigrette).

Specialty beer and natural wines will soon be featured at the flagship store, according to What Now Los Angeles.

Bread Head was launched by chefs Alex Williams and Jordan Snyder, former colleagues at the Michelin-starred Trois Mec. The pair created their menu through pop-ups and catering events, which made them known for their refined sandwiches with homemade focaccia. Last year, they partnered with Greg Willsey and Michael Pasternak to expand nationally, according to the eatery’s website.

With the first Bread Head sandwich shop opened in Santa Monica, more locations are planned, according to its website.

Thief Steals $4K of Jewelry from 3rd Street Promenade Store

The Owner Says a Similar “SmashAnd-Grab” Incident Took Place Earlier This Year

By Zach Armstrong

A Ring camera placed inside Third Street Promenade’s See Sea Jewelry store captured the moment a thief smashed through the storefront glass before robbing the business of approximately $4,000 in valuables.

The robbery took place last week shortly before 2 a.m. at the Santa Monica store located at 1405 3rd St. Promenade, adjacent to Santa Monica Boulevard, as reported by ABC7.

In the video, a man wearing a gray hoodie and a backpack is seen stuffing items from the display area into his

front pocket of his hoodie, along with grabbing necklaces.

On Tuesday morning, two men were cleaning the store’s exterior of shattered glass, while wooden planks were placed where the glass entrance used to be. According to one store worker present, the exterior should be repaired by next week.

See Sea Jewelry owner Sun Jung told ABC7 that a similar “smash-and-grab” incident took place earlier this year, going on to state “There’s police during the day and such but we need security at night because we see so many windows being broken at night … Security here doesn’t seem to improve as years go by, so I’m starting to have uncertainty about the location.”

Golda Zahra In Concert Golda Zahra In

“A promising young opera singer.” -The Los Angeles Times

The Broad Stage Saturday, July 13, 2024, at 8 pm At 13, 2024, With

Join an unforgettable evening and the Dream Orchestra

perform the opera music of Puccini, Verdi, as well Broadway classics including Sound of West Side and much

Join us for an unforgettable evening as Golda and the Dream Orchestra perform the opera music of Puccini, Verdi, Rossini, as well as Broadway classics including The Sound of Music, West Side Story, and so much more!

The Up Zoning Scam (Part 2)

SMa.r.t.

Santa Monica Architects for a Responsible Tomorrow

Last week’s SMart article (https:// smmirror.com/2024/06/sm-a-r-t-columnthe-up-zoning-scam-part-1/) discussed the ambitious 8895 units (including 6168 affordable units) that Santa Monica is required to build by Sacramento within the 2021-2029 time period. Because of certain factors outside the City’s control, even with the State’s gutting of all local control and codes, it will still be very hard to meet that target, particularly the 69% affordable housing mandate.

So, what’s a poor developer to do? With a virtually flat population growth, a high vacancy rate, the usurious cost of money, plus outrageous construction and land costs, why would anyone build in Santa Monica? And certainly, no developer(s) are foolish enough to flood the City with 8895 empty units since that would not only tie up all their expensively borrowed construction cash but, even worse, devalue the income and valuation of all their other existing Santa Monica rental properties.

There are two main reasons developers will still build in Santa Monica. First is to capitalize on this one-time bonanza of essentially no code and quality constraints. The developers have won their battle to be able to build anything, anywhere, and now just need to finally conquer the Coastal zone (where the real profits are), which is the last area that still has some protection from overdevelopment. Scott Weiner is even now trying to gut the Coastal Zone’s development controls. This total State theft of local power may not last forever, especially when the real limits to growth (global warming, water, and power shortages, seismic and sea level events, etc.etc.) start to kick in and when the inevitable resident backlash appears.

Deep pockets needed

Second, deep-pocketed developers take the long view. Regardless of what contraindications the future holds, they feel the area west of the 405 will always be desirable and profitable. Our mild climate coastal location upwind of LA, with a decent (but shrinking) school district, our proximity to LAX, UCLA, and major hospitals, all will provide long-term protection of their investments in Santa Monica. They need to capitalize now, but then they only need to have deep enough pockets to hold on for the big long-term payoff. In other words, our seaside town is being killed by all our very own desirable traits, which are irresistible to developers. They want to exploit our value now, even if they will kill, with their skyscrapers, the very same thing that makes the City desirable: its low-key beachside ambiance. So what will happen? First, Santa Monica developers will rush in to grab all the current State zoning giveaways and

submit plans for a suffocating number of skyscrapers. You will see an incredible parade of proposed outrageously tall buildings in glossy publications, but you will have no forum to object to them because the State has purposefully removed any requirement for public hearings. No developer wants to spend their evenings being harangued by residents who will be adversely effected by their oversized developments.

Feeding Frenzy ahead

After the application feeding frenzy, our local Planning Department will approve every skyscraper request (including the huge list of discretionary itemized waivers they are not actually required to approve) in the foolish attempt to eliminate even the smallest disincentive or make any improvement to the project and thus reach the magical 8895 unit target. So, on paper we will probably meet the target to permit that ambitious number of units but, of course, not the 6168 affordable unit goal since that was just bait to sell it to the naive residents. There never was, nor will there ever be, any mechanism to actually permit and build 6168 affordable units in Santa Monica over the remaining 5 years of this 8-year housing element cycle ending in 2029.

Now, with permits in hand, ready for an imaginary 20% population boom, the development community will simply sit tight and trickle out just a very small number of skyscrapers, which will actually get built next year, with a little more trickling out every year after that so as not to flood the market and lower prices everywhere. Since the apartments will be virtually all (85-90%) for upper-end tenants, this strategy relies on harvesting wealthy rental residents from Brentwood,

West LA, Beverly Hills, etc., not to mention New York, EU, and even China. The reason these new units will be rented to wealthy outsiders is that with a 10% vacancy rate, wealthy Santa Monicans living here already have plenty of choices if they want to relocate within Santa Monica itself.

This may sound like some weird dystopian novel, a City frantically making way for wealthy outsiders while being flooded with homeless citizens (who are also mostly non-natives), but this is now our new normal. Recently, as of November 2023 (about 1/3 of the way into the 8-year housing cycle), the City shows that 2663 units were in plan check plus 2378 units already approved plus 813 units actually under construction, for a grand total of 5854 units in the “pipeline.” So, just 1/3 of the way into the eight-year cycle, we already have two-thirds of the required projects in the pipeline. This is exactly what you would expect from Sacramento’s neutering of all local codes, review boards, and commissions: developers always jump in whenever they can make even a little more money than before.

Exactly as Planned

So the system is performing exactly as expected by the developer lobby, but another prediction is also coming true exactly as planned: the new State laws were not designed to create affordable housing: the 6000+ affordable units were just a fig leaf for the Sacramento power grab. If we look at the what is now actually in that 5854 unit pipeline, in the affordable housing category, there is a wimpy 1081 units (18.5% ) compared to the 4773 market-rate units (81.5%). In reality the ratio of affordable to market-rate housing should be the reverse: 69.3% to 30.7%.

Another way of saying this is the total number of market-rate units in the pipeline is already, at year 3, about twice (4773 to 2727) what is needed for the entire 8 year period! This ratio is not likely to change in the remaining 5 years. It will probably get worse.

Finally, the dark side of the State’s up zoning scam is visible. First, there are no penalties for not meeting the affordable housing requirement. Even if the State says that any City that does not meet its mandated targets might be put in the Builder’s Remedy penalty box (where every project must be approved by right), this is a toothless punishment since the entire state is already essentially in the Builder’s Remedy penalty box. The damage has already been done. Sacramento has already normalized that developers can do whatever, whenever, however they want. Local desires and quality controls are irrelevant.

Second, there is no mandate that any units (affordable or otherwise) need to be actually built (only permitted). Some people suspect the vast majority of projects (including their 1000 affordable units) will never actually get built. But a small number of skyscrapers will, as we said, trickle out being built every year. This will initially have tragic impacts on the immediate residents, including traffic gridlock, shading, lost photo voltaic opportunities, years of construction disruption, etc. etc. But the impact by each skyscraper will initially be concentrated on a few nearby blocks. But eventually the whole City will be overrun as the negative impacts of each skyscraper start to overlap.

Nonetheless, the vast majority of the permitted skyscrapers will initially exist only on paper. They will lie dormant like a volcano waiting to suddenly explode with devastating consequence on a new several-

block area. Because the explosion can occur at any time, the adjacent existing properties will suffer devaluation instantly the moment the skyscraper is approved/ permitted, but the existing owner will not be able to get their property taxes reduced until they actually sell it at discounted price if the prospective buyer wants to key the existing use and not, for example, build a competing skyscraper.

Max corner cutting

Third, the developers will exploit and expect to receive every possible code waiver. Expect microscopic units, essentially no parking, minuscule open spaces, and countless other reductions in the quality of housing. The poster child for this is type of project is the proposal for 601 Broadway: 24 stories, 264 units, including 40 (15%) affordable units and a ridiculous 103 parking spaces (each apartment gets 39% of a parking space), all from an out of state REIT, Real Estate

Investment Trust, the preferred vehicle of housing speculators. Notice that the deep pockets needed for this “permit and hold” strategy insures that only large corporate developers can play this game. The “Mom and Pop” developer is typically too small and under-financed to play.

Fourth, today, with this development binge, we are guaranteeing the housing affordability crisis of 2079 because all of today’s “affordable” units need be affordable for only 55 years; after that, they can go up to market rate. However, there is no guarantee that the units will actually stay affordable at the original affordability levels for over half a century since neither the City nor the State has any auditing/enforcement mechanism to insure that they stay affordable. The temptation to cheat for rental property owners may be irresistible.

Fifth, the real loss is the opportunity for the 73% of Santa Monica tenant residents to become owners. None of these new projects are condo projects, so

Santa Monica has, again, institutionalized a permanent underclass of renters who have no retained value from the thousands of dollars they donate monthly to their corporate landlords. In spite of SMRR’s heroic efforts, renters are always an exploited class. The rents, of course, will be set just high enough that renters cannot save enough to become owners and thus escape the rental treadmill. The State should have mandated not only affordability but also ownership options. In other words, if you are burning $4000 or $5000 on rent, you should be buying.

So, the State imposed up zoning has done an incredible job in solving an imaginary problem (the alleged lack of profits for property owners) but is hopelessly failing to solve a real problem: the lack of affordable units. This is not a surprise as our seaside City segues to Miami Beach, then to Honolulu, and finally to Hong Kong. The lack of surprise is due to the fact that in a capitalist society, you simply cannot build your way to affordability. It

has never happened. Ever. If you could, then those dense seaside cities listed above would have the cheapest, most affordable housing. Instead, the developer-feeding frenzy on our horizon will leave you with a less livable, more gentrified, less sustainable, and less resilient city which its residents and visitors won’t recognize.

Thank you, Sacramento.

By Mario Fonda-Bonardi AIA

S.M.a.r.t Santa Monica Architects for a Responsible Tomorrow

Thane Roberts, Architect, Mario FondaBonardi AIA, Robert H. Taylor AIA, Architect, Dan Jansenson, Architect & Building and Fire-Life Safety Commission, Samuel Tolkin Architect & Planning Commissioner, Michael Jolly, AIR-CRE Marie Standing. Jack Hillbrand AIA

For previous articles, see www. santamonicaarch.wordpress.com/writing

Cypress Equity Investments Acquires Santa

Monica Retail Center for $7M

The Retail Center Was Sold for 274%

Market

Cypress Equity Investments has acquired a prime retail center at 20312037 Wilshire Blvd. for $7 million.

The purchase of the 3,149-square-foot property, situated on a 6,970-square-foot

parcel at the corner of Wilshire Blvd. and 21st Street, significantly enhances CEI’s presence in Santa Monica.

The acquisition, handled off-market by Kennedy Wilson Brokerage’s President Ed Sachse and Senior Vice President Christine Deschaine on behalf of Auerbach Realty Holdings, adds to CEI’s holdings in the area. CEI already owns adjacent properties at 2025 Wilshire Blvd. and 1152 21st Street, creating a combined 25,457-squarefoot assemblage on a newly zoned thoroughfare.

“Cypress was the ideal buyer for this

asset,” said Sachse. “I’m pleased we were able to facilitate a sale that gave our client the value they were seeking for their long-held property.” Auerbach Realty Holdings had owned and operated the center for over four decades.

The retail center, known for its daily needs shopping offerings, was sold for $2,222 per square foot—274% above the Santa Monica market average of $810 per square foot for retail properties, according to CoStar.

In anticipation of the site’s redevelopment, the Kennedy Wilson Brokerage team also assisted in

Homeless Man Arrested in Santa Monica for Burglary and Arson

Suspect Faces Multiple

Charges

After Incidents

Patrol officers responded to a commercial burglary call on Saturday, May 25, at approximately 11:30 p.m. in the 2900 block of Lincoln Boulevard. The business owner had received an alert from the alarm company indicating a break-in through a skylight.

Upon arrival, officers found the suspect, identified as Allen Francisco Contis, 49, still inside the premises. Contis, who is currently homeless, was taken into custody without incident. He was issued a citation and released per the Los Angeles County Bail Schedule.

On Wednesday, May 29, officers

responded to multiple arson reports in the 1500 and 1600 blocks of Lincoln Boulevard and the alley east of Lincoln Boulevard. Witnesses identified Contis as the individual responsible for setting fire to a discarded tire, a city-owned trash can, and a small garage adjacent to a multi-unit apartment complex.

Officers located and arrested Contis without incident. The Los Angeles County District Attorney’s office has charged him with two counts of felony arson and one misdemeanor count of giving false information to a police officer.

The burglary case will be presented separately to the District Attorney.

Anyone with information about these incidents or Contis is encouraged to

contact Detective Tavera at Hector. Tavera@santamonica.gov or the Watch Commander at 310-458-8427.

relocating Noma Sushi, a beloved neighborhood restaurant that had been operating at the property since 1982. “We were able to support Noma in finding a new location in the immediate trade area, ensuring continued patronage by their regular customers,” Deschaine said.

SANTA MONICA COLLEGE

FIREWORKS • LIVE MUSIc

SATURDAY, JUNE 29

GATES OPEN 5 P.M. | FIREWORKS AT 9 P.M.

Corsair Field | 1900 Pico Blvd, Santa Monica, CA

$5 Parking (Enter at Pico Blvd. & 17th St.)

Live music by Westside Crew

PROHIBITED: Animals, alcohol, weapons, smoking, chairs with pointed legs.

SANTA MONICA

Susan Aminoff;

Tom Peters; Rob Rader;

VICKY SWARTZ