More feedback on LADWP leases

By Deb Murphy

A week after the November 22 meeting between Los Angeles Department of Water and Power and Owens Valley business lease holders, feedback ranges from hopeful skepticism to skeptical hopefulness—an improvement over the frustration expressed at previous public meetings.

The crux of the frustration is the one-time transfer policy, part of the now-resolved ranch leases, allowing existing lease holders to sell their business and transfer the department lease once. Those new business owners/lease holders would be faced with an open, competitive bid on the land, a precarious situation for any businessman. The existing policy, leases transferring to new business owners, has been in place for the past 80 years.

One take-away from last week’s meeting is the possibility of the department selling its currently leased land.

In a phone interview immediately after the November 22 meeting, LADWP Aqueduct Manager Jim Yannotta stressed this was just the start of the conversation. “We’re partners in the Owens Valley,” he said. “Part of our mission is to support the business environment.” Yannotta stressed there would be more meetings to hear concerns of lease holders. “We’re evaluating a number of leases. We need to make sure we move forward.” But he stressed any policy had to be in compliance with the Los Angeles City Charter and the Charles Brown Act, as well as business owner concerns.

The department’s reason for the current round of discussions is compliance between the charter, requiring open competitive bids, and the Act, passed to protect the Owens Valley business community where more than half the land is opened by LADWP. The Act allows lease transfers if in the public interest.

The perpetually glass-half-full Jim Tatum, Bishop city administrator, is encouraged with the possibility of current and future lease holders’ ability to buy the land under those businesses.

A possible scenario, according to Tatum, would allow current lessees to pay the minimum appraised value on the land—no open competitive bids. That possibility would also be extended to future business owners with LADWP leases two of the previous three years. If the department’s legal staff can get a handle on that process and appraisals are consistent with land values in Owens Valley, the issue of business owners or potential buyers recouping their investment could be resolved.

With the number of Bishop area businesses conducted on department land, Tatum is committed to keeping the process moving toward a good resolution.

Land sales on reasonable terms would put Owens Valley in charge of its own destiny,” was Supervisor Jeff Griffiths response following the meeting. Griffiths is sticking with the interpretation that the Act exempts LADWP from the Charter’s competitive bid policy, leaving the question of why these charges are taking place now.

There is some hope,” he said.

Mike Allen, owner of Allen Outdoors, leans more toward the skeptically hopeful end of the spectrum. For now, he’s going to sit tight and wait.

On the battle between the City Charter and Charles Brown Act, Allen feels the Act trumps the Charter. “My understanding is the Charter is a living document, it can be changed,” he said.

Allen checked out the technicality of getting a loan on LADWP land under existing business improvements. “How do you get the value of land with nothing on it” he asked, when there are actually business improvements wholly owned by the lessee sitting there. Following the explosion of the real estate bubble in 2008, loans on bare land and businesses are harder to get, Allen said, admitting the Owens Valley presents a unique situation.

 

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2 Responses to More feedback on LADWP leases

  1. Anna Martini December 4, 2016 at 7:49 am #

    Woulk love to see a map showing what DWP owns downtown. How many businesses are on leased land?

     
  2. Trouble December 5, 2016 at 12:21 pm #

    Sounds to me like DWP is trying to figure out a way to get fair market prices for land they basically stole .I can see how that might complicate matters.

     

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