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January 2000, Real Options, Ground Lease Contacts and Marina del Rey

David Dale-Johnson
Ho-hum. Long term ground lease you say. What could be as dull? Well, consider the plight of the County of Los Angeles. The County owns most of the land on which Marina Del Rey was developed in the late ‘50s and early 1960s. The Board of Supervisors, at that time chose to enter into long-term ground leases with developers of the various parcels. Several efforts had been undertaken since the late 1800s to create a commercial harbor in the Playa del Rey estuary. With San Pedro ultimately winning the battle to be the home ofLos Angeles’ harbor, the Marina area was to remain either a haven for duck hunters or be developed into a recreational harbor. Formally opened in April 1965, the harbor area is home to over 5000 boat slips and according to has the highest density restaurant seating outside New York City. So what is the County’s plight if it owns this valuable land generating income in perpetuity for the County?