TONIA REYES URANGA OBJECTS, BUT COUNCIL BAILS OUT BANCAP AND SEAL BEACH YACHT CLUB

TONIA REYES URANGA

Seventh District Councilmember Tonia Reyes Uranga cast the lone dissenting vote Tuesday night in the Long Beach City Council’s 7-1 decision (First District Councilmember Robert Garcia was inexplicably out of the room) to lop $3,000 a month off the rent it charges BANCAP Investment Group to lease a swath of Long Beach Marina-front property. Locals may better know the area as the location of the popular restaurant, Schooner Or Later.

BANCAP requested the reduction in the midst of a 25-year lease because one of its subtenants—the Seal Beach Yacht Club—has apparently hit on hard times due to declining membership and says it needs a $3,000 reduction in its monthly rent to stave off bankruptcy.

“I just want to be clear: the reason we’re helping them out is because of 40 percent loss of membership in a social club?” Reyes Uranga asked. “Why isn’t this just a negotiation between BANCAP and the [Seal Beach] Yacht Club? This is a sublease to BANCAP and not a lease with the city.”

In an April 19 letter to the City Council obtained by Redistricted!, former Long Beach Deputy City Attorney Jim McCabe—who used to supervise the city’s lease with BANCAP—said he was troubled by the same thing.

“In the good years, BANCAP got the benefit of rising subtenant rents. It obviously did not offer to share these increased rents with the taxpayers,” McCabe wrote. “Now times are tough. It wants the taxpayers to pay for the decreased rents it is getting from one of its sub-tenants.  BANCAP was willing to take the risk of fluctuating sub-lease rents when times were good. Now it wants the taxpayers to foot the bill when we have been in a recession.”

McCabe went on to suggest that the city’s willingness to grant a rent reduction was based on the fact that BANCAP’s founding principals are Stephen T. Conley and John W. Hancock, who are wealthy and well-connected social and political insiders.

McCabe also criticized the timing of the vote. It was originally scheduled for Feb. 16, when Councilmember Gary DeLong—in whose Third District the property is located—was campaigning for re-election. Conley was a co-chair of DeLong’s re-election committee and Hancock was on the campaign’s advisory council. McCabe noted that the vote reappeared on the council agenda one week after DeLong was re-elected.

“This is just plain cronyism,” McCabe charged in his letter.

Back at Tuesday night’s council meeting, City Manager Pat West responded to Reyes Uranga’s questions about the city’s intervention in the Seal Beach Yacht Club-BANCAP lease by turning to the Long Beach’s property service manager Victor Grgas—fun fact: a former mayor of Seal Beach.

Grgas recited background information that had been previously shared with council members but was not attached to the agenda item available to the public. He detailed a recent sharp decline in Seal Beach Yacht Club membership, suggested that the club might close if it didn’t receive a $3,000 reduction in its monthly rent—and said that the closure of the club would cost the city $110,000 more than the cost of reducing the rent to BANCAP.

However, Grgas did not explain why the city ought to take the $3,000 monthly hit rather than BANCAP. Nobody did. Reyes Uranga was alone in publicly considering other consequences.

“We are setting a precedent in terms of doing this,” Reyes Uranga warned. “Will this open the doors to other people requesting the same [treatment]?”

Grgas indicated that would not be a problem, although he based his prediction on the narrowest definition of what the council was considering.

“There is no other marina-related use that asking for this kind of relief,” he said. “This represents a special circumstance.”