BCHD is the WORST Negotiator Ever?

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SUBJECT:

PUBLIC COMMENT - OPPOSE: BCHD PLAN TO PRIVATIZE PUBLIC LAND AND PAY THE DEVELOPER TO USE THE LAND

****COPY THE LETTER BELOW INTO AN EMAIL****

PUBLIC COMMENT RE: BCHD BOARD MEETING 9/28/22

Mayors and Councils of BCHD Owners, Redondo Beach, Manhattan Beach, Hermosa Beach

Mayor and Council of Torrance

Planning Commissions of Redondo Beach and Torrance

Los Angeles Local Area Formation Commission

Media

BCHD Board

SUBJECT: BCHD PLAN TO PAY A PRIVATE DEVELOPER TO USE PUBLIC LAND

Yet again, BCHD has misrepresented the proposed Healthy Living Campus (HLC) project to the public and shortchanged the public’s right to review and comment on the District’s plans with a last minute release of information.

BCHD CEO and staff are recommending the BCHD Board approve contracts with a private Developer/Owner/Operator that result in BCHD’s taxpayers being forced to PAY the Developer $71,698/YR.

This comment is a formal objection to BCHD’s proposed action to lease 3 acres of public owned and zoned land to a private Developer/Owner/Operator for a 100% privately owned/operated, market priced assisted living facility for $1.5M per year land lease rate. According to BCHD’s consultants, the assisted living will service 80% non-residents of the District at full market rents.

This comment is also a formal objection to BCHD’s proposed action to lease space in the private developer’s new, expensive building for programs that service 91% to 95% non-residents of the District at an annual rent of $1,571,698 per year with a 2% annual escalation rate. BCHD should not be spending District funds on very expensive new office space for 90%+ non-resident services, or for any other reason.

BCHD should not be locking in a LOSS on the NET LEASE REVENUE. BCHD’s prior written claims stated that the HLC plan would provide $2.2 to $3.3M in profit for use of the persons served by the District (the residents).

*BCHD PROPOSES TO LOCK IN A NET LOSS ON HLC PRIVATE DEVELOPER LEASE

BCHD CEO and staff are recommending that the BCHD Board of Directors (Poster, Chun, Bholat, Diehl, and Koo) approve a NET LEASE PAYMENT to the private Healthy Living Campus (HLC) Developer/Owner/Operator PMB/Watermark of $71,698/year. IF APPROVED, BCHD TAXPAYERS WILL PAY THE PRIVATE DEVELOPER TO USE 3 ACRES OF PUBLIC LAND FOR 65 to 95 YEARS.

*TAXPAYERS PAY $71,698/YR TO ALLOW USE OF 3 ACRES OF PUBLIC LAND

District taxpayers will be forced to pay the private Developer/Owner/Operator (D/O/O) $71,698 per year while the private developer profits from the use of the publicly owned and zoned land along with its 100% ownership of the assisted living facility that charges market rates. BCHD consultant study shows the assisted living will service 80% NON-RESIDENTS of the District (MDS, Exhibit 3-3).

*BCHD CEO ASKS APPROVAL FOR $1,500,000/YR LEASE TO THE PRIVATE DEVELOPER

BCHD’s 9/28/22 Board packet requests Board of Directors approval of a lease rate to the private D/O/O of $1,500,000 per year (Cain presentation, 9/28/22, p5). That is for a lease term of 65 to 95 years. It allows the private developer to build a Phase 1, 110-foot tall, 300,000 sqft building.

*BCHD CEO ASKS APPROVAL FOR $1,571,698/YR LEASE BY BCHD FOR OFFICE SPACE

BCHD’s Board packet also requests the Board of Directors approval of a lease for space in the private developer’s new building. The space will be used for:

(1) PACE program (95% NON-RESIDENTS of the District)

(2) “allcove” program (91% NON-RESIDENTS of the District)

(3) Office space for BCHD

*BCHD CLAIMED $2.2-$3.3M GAIN, NOW LOCKS IN LOSS WITH PRIVATE DEVELOPER

BCHD will pay the private developer $1,571,698 per year (Cain presentation, 9/28/22, p7) in annual lease rent along with a 2% escalation. The cost of BCHD’s rent to the private developer exceeds BCHD’s lease payment from the developer by $71,698 per year. The Board will be locking in a NET LOSS on a project that the Board claimed to the public would be a source of profit to the District of $2.2M to $3.3M per year (Cain presentation, 6/16/20, p7)

*BCHD CEO/BOARD FAIL TO ACT IN THE BEST INTEREST OF DISTRICT RESIDENTS

BCHD’s CEO is recommending a set of actions that

1) result in a NET LOSS on the leasing of 3 acres of public owned and zoned land;

2) obtain 0% BCHD equity ownership of a 65 to 95 year project;

3) use public land for a private assisted living facility for the benefit 80% non-residents of the District;

4) rent space for the “allcove” program that serves 91% non-residents of the District;

5) rent space for the PACE program that will enroll 95% non-residents of the District; and

6) result in a non-conforming 110-foot tall, 300,000 sqft building immediately adjacent to 30-foot residential uses.

BCHD must act in the best interest of the District Residents and reject this deal and these contracts endorsed by the CEO and proposed by BCHD’s investment bankers that are paid to close a deal to receive their commission.