$1.5 Million MLY Bailout Still Unsigned by Developers

• Critical Candidates Urge Revocation

BY BILL KOENEKER

It has been the hot button issue of the city council campaign. The accusation that developers of the Malibu Lumber Yard received favorable treatment and the city council members demonstrated bad business judgment when they granted an interest-free $1.5 million deferral of the participation rent over 15 years in exchange for connection of a sewer pipeline from the animal hospital to the MLY treatment plant. Both are on city-owned property.
It now turns out the highly controversial agreement that the city council has vehemently supported has never been consummated. City Manager Jim Thorsen confirmed this week that despite it having been in their hands for months, the agreement has not been signed by the developers and returned to the city.
Thorsen said Richard Weintraub and Richard Sperber’s attorneys are still vetting the agreement approved by the council nearly six months ago. “We expect the applicants to sign it,” he added, saying no money has been deferred and the pipeline is not operational. He did not say when signatures are expected.
The revelation came to light when city council candidate Mike Sidley, an attorney, sought to obtain the actual legal documents and determined that the only copies the city could provide were unsigned. It was not clear whether this was a surprise to the council or if members had been kept apprised of the delay.
The accusations resurfaced at this week’s Malibu City Council meeting when Steve Uhring, president of the Malibu Township Council and a political operative for several of the candidates, told council members that most people don’t think this is a good business deal and the bailout casts a cloud over the departing council members.
“That could not be further from the truth,” said outgoing Councilmember Andy Stern. “What has surprised me in the last month is the number of people thanking us. I am proud we are going out in the high light,” he said.
Mayor Sharon Barovsky, who said she recognized the matter has become a campaign issue, said that if the council could not have worked out a deal, “We would have had to close the animal hospital. I don’t think anybody wanted that.”
Thorsen, when asked by the mayor, explained that the wastewater problems at the animal hospital owned by the city and leased out are not the obligation of the tenant but of the city.
Councilmember Jay Wagner, who had insisted on the inclusion of the pipeline exchange in the agreement, said, “We knew one way or the other we had to fix it.”
“And it is not clear we could have put in another system,” said Councilmember John Sibert, because of the impending Civic Center septic prohibition by the Regional Water Quality Control Board.
The mayor said the potential costs to the city are far less than the amount of the interest free deferral.