Controversy Continues in Lumber Yard Shopping Center Lease Sale

• Partners Deny Recent Allegations That Indicate They  Built the Project on Speculation

BY BILL KOENEKER

Before the Malibu Lumber Yard high-end shopping center was built, the Malibu City Council announced they chose Richard Weintraub and Richard Sperber to construct and remodel the old hardware store and lumberyard site and awarded them the ground lease because they were both locals, who were raising their families in Malibu and were committed to the long-term success of the project. So much so, the council gave the two businessmen a 39-year ground lease with options for a total of 54 years.

Consequently, the recent remarks by the real estate broker who sells leasing space at the Lumber Yard has caused a quiet uproar in Malibu over his controversial comments.

Jay Luchs, of CB Richard Ellis, was quoted in a national publication, California Apparel News, that both Sperber and Weintraub, “always planned on building it and selling it. It is an investment property.”

However, Luchs has backed away from that statement when questioned by the Malibu Surfside News, saying he never read the article and the question was about high-end retail real estate properties in general.

“Richard and Richard never told me that they were building it to sell it. I could see how that would read differently in Malibu,” he said.

Asked about the $38 million price tag he was quoted as saying was the asking price for the 30,000-square-foot mall when it was put up for sale in late July, Luchs also backed away from that statement.

 “There is no asking price. That is a number I came up with, that is in the range. from $35 to $40 million. That is my guess. I am not the selling agent,” he said.

Luchs insisted the retail sales slump of the last two years is over for many merchants and now would be a good time to sell.

“Now I am seeing things get better. The vacancy rate is getting much better. Is everyone doing better? No,” he said.

A shopping center owner was quoted in the article saying nobody is selling if they don’t have to.

Weintraub and Sperber were quick to deny ever having made those comments and confirmed there is no asking price since neither claim to know what the price might be.

Weintraub was asked by The News if the reason for the sale had anything to do with widespread and persistent rumors that he and his company were not doing well financially, and he was being forced to sell.

He said the rumors about him being in financial trouble are completely untrue. “I have bought $40 million in real estate in the last 60 days. There is no question that we are living in a different world. Each of the properties have issues,” Weintraub said.

He denied letting go of his interests in the hotel project, once-owned by Adamson Companies.

 “My partner is in bankruptcy. I increased my ownership in the property recently. I am completely committed to it,” he insisted.

Another question was cleared up about the final plans for his ownership of the Sportsman Lodge located in the San Fernando Valley.

”We did not do the full retail [plan], but we completely remodeled. It is beautiful. We are constructing a flagship building for Equinox,” he said.

Returning to a discussion about the Lumber Yard, Weintraub deferred a question about why sell now and what a partner could do that neither he nor Sperber could or could not do, to his partner.

Sperber told The News things have not worked out as he anticipated. Costs were more than anticipated. Rents were not what was expected. Construction costs, like the additional money needed for the septic system, were much higher. And he said, “The bad PR.”

“It is very stressful. I really did not do this for the money. Sure, I could make some money. I even thought when my kids grew up they could work in one of the stores,” he said.

And now the city council is waffling on the loan modification and has made the entire enterprise risky, according to Sperber.

“Getting the loan extension is very important,” he said. “I don’t think some of the city council knows what they are doing. It really was an administrative process.”

Sperber went on to say he wasn’t sure the current city council wanted him or his partner as owners any longer.

“I don’t know if the city is happy with the ownership, if they are delaying this bank loan. If we don’t get this loan what if they foreclose on us? I guess some corporate owner could buy us out. The real story is this loan.

“I don’t want to own this asset if the city does not want us as owners,” he concluded.

Sperber said the LLC is a 50-50 partnership and Weintraub is the general partner. He said that either one of them could buy out the other. 

Weintraub heads up Weintraub Financial, a Malibu-based real estate holding and development company.

Sperber is the co-CEO of ValleyCrest Landscaping, described as a billion-dollar-a-year business.

Recently, Michael Dell of Dell Computers purchased a majority share of the family-owned company.

Luchs sells tenant space for not only the Lumber Yard, but also, he said, for Malibu Village, where he acquired a small ownership interest, but also sometimes places tenants in the Malibu Country Mart.

Luchs also brokers deals for tenants and landlords in Beverly Hills and also along Melrose Avenue.7