Bungled Boutique Hotel May Be In Big Trouble
Friends probably remember that FFFF has been relentlessly critical of the dubious scheme approved by our City Council to underwrite a downtown boutique hotel and uber-dense apartment project on a parking lot owned by the City and used by Metrolink commuters.
Here’s a reminder: three councilmembers Bruce Whitaker, Shana Charles and Ahmad Zahra voted to sell this property to a developer for a mere $1.4 million (less site material removal) while simultaneously time jacking up the value of the land by approving density 2.5 times the limit specified in the Transportation Center Specific Plan. It was a gift of public funds at least ten million dollars.
Here’s the fun part. The original and completely unqualified baby daddy of the project, Craig Hostert, didn’t have the wherewithal to make the deal. After years of failing to perform on his Exclusive Negotiating Agreement and numerous extensions, Hostert’s West Park Investments, LLC joined its non-existent forces with TA Partners Development of Irvine, Johnny Lu, proprietor.
Mr. Lu, the new face of the project, appeared at council meetings to seal the deal with a ration of gobbledygook bullshit.
Now it appears that Mr. Lu may not have been the best choice of partner according to the Real Deal Real Estate News.
It seems that Johnny has gotten himself in over his head on two projects in Irvine, including second bridge loans that he has now defaulted on. And of course Sunayana Thomas, Fullerton’s crack “business development” director seemingly failed to inform the City Council of Mr. Lu’s impending financial embarrassment, something that should have been revealed in even a cursory perusal of TA Partners’ asset to debt ratio and its balance sheet.
And then, of course there is the problem with the completely incompetent concept of rushing the approval to transfer of title to the land, before the deal had received final approval.
By now the Council has possibly, though not necessarily been informed by the Fullerton City Manager, Eric Leavitt, of the problem, but where does the deal stand? Title to the property has been transferred from the City to and through Lu’s companies*, presumably for the original sale amount. But if TA Partners can’t perform, will the City get its now very valuable property back, or will it be encumbered by bankruptcy receivers? Will the City, in order to save face as it always has, permit Mr. Lu to assign his rights and interests to another party as a face-saving strategy? If that happens, will the original bad idea still go forward, or will the Council approve something even worse as a sop to a new developer so to avoid admitting their horrible mistake in the first place?
You can try asking Whitaker, Charles, or Zahra, the architects of this inexcusable and completely avoidable mess, but don’t hold your breath waiting for a response.
* Topic of future post
Ah, Fullerton. Where intelligence, common sense and accountability go to die.
You nailed it. Another developer will be dredged up, just like Johnny Lu was, and plan will get even worse.
The people of Fullerton are going to have to pay a bailout premium to somebody.
And now Hoogerbooger will pop up telling us how deviating from the Council-approved Specific Plan without actually changing it is a GOOD thing for some dumb reason or another.
There’s no way Whitaker supported this foolishness.
Guess again. Maybe (probably) he was confused.
Yes. Bruce did. He had some reason that somehow if he didn’t get a hotel (which he ain’t) he might get some affordable housing which Fullerton is in desperate need of. For heavens sake, a one bedroom apt. at The Malden Station is $2700/month. I cant image paying $2,700/month for a 550 sq. ft apartment with mile long corridors. Good Lord!
Side note, Zahra and Charles are always cheer leading in support of affordable housing instead got two black eyes. If I’m not mistaken, Mayor Jung made motions to build affordable housing on that property, but Zahra and Charles so badly wanted a Boutiqe Hotel. PHONY, two faced liars!!!
Didn’t Charles say if a hotel was in built in Downtown people who visited the Community Center would have a place to stay? Furthermore, that was her rational for voting yes. Hope her students have ear plugs on when she’s teaching.
Thank God we have two intelligent minded people still holding the ship down. BRUCE, PULL YOUR HEAD OUT. If Zahra and Charles supports something, anything, that should be a sign to do the opposite!
I remember several foolish minded people standing up and cheer leading for this half ass designed monster Boutique Hotel, and it’s neighboring 7 story cliff dwelling apartment complex. Everything from A-Z was cheese ball.
Oh well, it’s gonna be fun to see how Zahra, Charles, and Whitaker respond to questions about their darling bankrupt TA Partners Chief in Command, Johnny Lu.
DJ, Jung gets no points for wanting to build housing there. It’s a useful parking lot and if the City ever got its shit together they’d be charging the aging yuppies to park there and in the parking structure.
The ironic thing was that the City rushed this through to protect it from the new laws governing surplus property. Except that it wasn’t surplus property at all.
Bruce Whitaker talked himself into the idea that he was preventing something even worse and by the end of the debacle he WAS getting something worse but went along with it anyway.
Sad.
God, this reminds me of the City Lights fiasco conducted by Gary Chalupsky, Paul Dudley and Jim Armstrong.
They awarded the SRO project to a guy named Caleb Nelson who seemed to be living out of his truck.
The ENA on this was extended many times. The guy couldn’t perform and Fitzgerald/Domer kept pushing it.
The worst part was that there was never even an RFQ put out to see who could do what. The City accepted an unsolicited propsal.
Fitzgerald, Chaffee, Quirk-Silva. The Three Musketeers of Muddled Messes. And now they’re all gone.
And let’s never forget the crooked slime sack Chaffee who finally voted to pull the plug but a few weeks later changed his vote on the promise that Fitzgerald/Pringle would hold a fund raiser for him – which Pringle would have done anyhow.
Zahra, Charles and Whitaker couldn’t run a lemonade stand.
And Zahra thinks he’s Mr. Big Economic Development, even though he’s never has a job in the United States.
The Shitty City of Fullerton will sit on their hands for 15 years and the Development Agreement will expire.
Correction Harpo. You say the price was $1.4M but, what about the Escrow Holdback of $500k to address the discovery of any Hazardous Substances discovered on the Property during grading? It looks like the City will never see that because there will never be any grading, so the real price was $900k not $1.4M. That’s less than the cost of the asphalt, utilities and landscaping on the property.
Read again:
“Here’s a reminder: three councilmembers Bruce Whitaker, Shana Charles and Ahmad Zahra voted to sell this property to a developer for a mere $1.4 million (less site material removal) “
Well, the good thing is no one will have to look at the disgusting architecture of TA Partners and the sidewalk and street along Santa Fe and Pomona will not get reduced and abandoned.
Not necessarily. I think this thing is going to be re-assigned to somebody else. If not, the whole house of cards created by Fitzgerald, Flory, Domer, Chaffee, Zahra, Whitaker and Charles etc. comes crashing down.
Can’t let that happen. No one will learn a damn thing.
I see legal eagle Dick Jones of the “I Can’t Believe It’s A Law Firm” law firm has been dishing out up his standard work product.
Make it a paid parking structure operated by a competent vendor with a percentage of the profits paid to the city.
Mistakes were made. Things happen. Hindsight is 20/20/
The old Terry Galvin mantra, picked up and run with by the egregious Gary Chapulsky, with cover from Dudley, Armstrong and a host of feeble minded councilmembers who were just there for show.
I wonder who hooked up Hostert with Johnny Lu.
For some reason Fitzgerald springs to mind.