Porno
Teens

General Articles

Share |
E-Mail ArticleE-Mail Article Printer-FriendlyPrinter-Friendly

It’s a Go

Author: Bill Meagher
June, 2012 Issue

Corte Madera city leadership is fighting against imposed housing requirements by streamlining the approval process.

 
For years, a billowing trail of steam rose over Highway 101 in Marin County, originating from the paper cup factory whose products kept lots of McDonald’s Happy Meals company. But now, the Tamal Vista Apartments rise up from the former Win Cup factory and, as it turns out, the upscale units come with their own fascinating backstory.

To begin with, the town folk in Corte Madera didn’t really want the 180 apartments—“It’s too big,” or “too dense.” Rather, the town council approved the project because it served a purpose, not because a dense apartment complex was at the top of everybody’s must-have list.

Then there’s ABAG, the Association of Bay Area Governments. This little-known organization annually tells cities and towns how much added housing will be needed locally based on demographics, historical changes and job growth projections. And those numbers hardly ever make cities happy. In the case of Corte Madera, the town was so pissed off, it resigned from the commission, complete with heated rhetoric and a pioneer spirit that had some folks at public meetings talking about tyranny and Redcoats or, at the very least, the right to arm bears.

There’s also Victor MacFarlane, the 61-year-old San Francisco-based developer who’s counting on the Tamal Vista project to help him rebuild his hard-earned reputation after his MacFarlane Partners brought the country’s largest public pension fund into a deal that lost almost $1 billion.

That’s billion, with a "b."

Finally, there’s the fact that the project was submitted in September 2011 and, by February 2012, Town Hall had signed off on it. For those of you scoring at home, that means it was approved in five months—in a county where approval for some projects runs neck-and-neck with the aging of decent scotch—and that included enough time to have the approval appealed and slapped down.

Building blocks

Our story begins around New Year’s 2007, a little north of Los Angeles, on a 15,000-acre tract of land known as the Newhall Ranch. It’s the largest undeveloped property left to build houses on in Southern California, and the plan was for MW Housing Partners III, a company jointly owned by MacFarlane Partners and Weyerhaeuser Realty Investors (WRI), to invest in the project called LandSource Communities Development. The simple strategy was time honored and penciled out on paper: The fund would hold the land and sell it off as developers needed it, over many years, as the land continued to appreciate in value.

For more than a decade prior to LandSource, MW Housing was already one of the top single-family housing investment managers for the California Public Employees Retirement System (CalPERS); MW Housing Partners III and LandSource was just the latest in a series of investment ventures between the two. And MacFarlane Partners had managed commercial real estate investments for CalPERS since the early 1990s, building its reputation by researching and identifying the benefits of investing in and developing projects built around transportation elements in neglected urban areas. Over the years, MP grew to manage as much as $10 billion in real estate for CalPERS, including the very high-profile Time Warner Center in Manhattan. For that same deal, MP partnered with former LA Laker star (now LA Dodger owner) Magic Johnson.

So CalPERS throwing in with MW Housing III on the LandSource deal didn’t raise any eyebrows. But in summer 2007, the credit markets froze and commercial real estate markets that had been pumped full of cheap debt began to leak. By June 2008, the project was drowning in debt. Badly overleveraged and out of time, LandSource filed for bankruptcy protection after failing to restructure $1 billion in debt. This left CalPERS in the lurch for a whopping $970 million, according to the Wall Street Journal.

What have you done for me lately?

Though MacFarlane had performed well for CalPERS for better than a decade, the rapid loss of assets likely left the pension fund looking for a fall guy. But while the LandSource deal was bad news for MP, it certainly wasn’t the only dark cloud drifting over the Sacramento-based pension fund when it came to commercial real estate.

It lost $500 million on the ill-fated $5.4 billion purchase of Peter Cooper Village in Manhattan, the deal that became the poster child for hubris and hutzpah in the overheated national commercial real estate market. CalPERS invested $91 million in Boston for the Columbus Center, a project to build condos and stores over a section of the new Massachusetts Turnpike. The project is still stalled. The pension fund also plunked down $100 million for property in Sacramento to build a pair of 53-story towers; the land is still sitting there. In Portland, Ore., CalPERS and a partner ponied up $109 million to buy a portion of the “Mechanical Pencil” building. The fund then defaulted on a $70 million mortgage and turned the keys over to the bank. And in East Palo Alto, Calif., the fund invested $100 million in a plan to take 1,700 rent-controlled apartments, upgrade them and then bump rents to market price. But the project hit rough waters when the tenants objected, and the public protested. After allegedly putting 1,500 low-income tenants on the street and losing a legal battle, the project’s banker, Wells Fargo, foreclosed on the project.

So CalPERS was more than capable of getting into real estate mischief without MacFarlane, but $1 billion isn’t chump change. MacFarlane Partners and CalPERS soon parted ways, with noisy chat in real estate circles from Manhattan to Seattle centering on whether MacFarlane was pushed…or did he jump? For the record, in 2009, MacFarlane Partners released a statement that announced its resignation as real estate adviser to the pension fund. CalPERS had no comment on why it and MP were no longer an item.

While the California State Teachers Retirement System, Teachers Retirement System of Texas, Illinois State Board of Investment and New Jersey Division of Investment have all invested millions in commercial real estate investment funds managed by MacFarlane Partners, the setback with CalPERS impacted MacFarlane. The last time the development company went to raise funds, it put just $200 million together—and the investors all hailed from Europe.

While Victor MacFarlane has paid a price professionally for the LandSource deal, it certainly isn’t the most daunting challenge he’s faced. And through the years, his success has brought him opportunities, like becoming the majority investor in DC United, the professional soccer team in Washington, D.C. He also bought the penthouse at the St. Regis in San Francisco, a place comfortable enough to hang your hat, even if you own several different chapeaus. He’s since sold off his interest in the soccer team and, after failing to sell the primo pad for $70 million, he quietly handed the keys back to the bank.

That was then, this is now

The trademark vapor twisting in the air above the WinCup factory is long gone, but the aging buildings that housed the paper cup mill still hang around, three stories of low-slung cement warehouse fronting the street across from the fun factory known as the DMV. The structures sport paint chips, and the awnings show their age not in the graceful way of classic building, but rather like a place where the years have taken a toll. The warehouse bays sit empty where semis once lined up to tote disposable cups to market. The parking lot holds a sign that advertises the project to come and, in keeping with Marin’s embrace of Mom Earth, the project promises to qualify for LEED Silver status with the units ready for occupancy in fall 2013. The apartments will include 3,000 square feet of resident-serving retail, maybe a dry cleaner and a coffee shop (the bean reigns supreme in the land of organic millionaires).

The old cup factory is part of what Corte Madera’s general plan refers to as an “overlay area,” where a light industrial use or a multi-family project would work. Planners had approved up to 180 units in the zoning of the property before MacFarlane ever knew about the land. And while the project was approved in rapid fashion by Marin standards, Corte Madera councilman Michael Lappert explains that has more to do with the town’s planning operation and philosophy. “We believe in the rights of property owners to try to do what they want with their property, as long as it’s legal,” he says. “We tell people, ‘Bring your plans in, and we’ll tell you how it will work.’ If we ask somebody to do these five things, and they do them, we don’t turn around and say, ‘OK now do these 12 things, and then do these 10 things.’ We don’t micro manage.”

Lappert, who’s also a reserve officer with the Twin Cities Police Authority (serving Corte Madera and Larkspur), is talking on the phone and warns that if something big happens, he may have to hang up. He says the approval of the high-density, multi-unit Tamal Vista project was the product of the town’s general plan rounding into shape in April 2009, the annual ABAG numbers coming in, and the town coming off an expensive lawsuit over its role and responsibility in not presenting enough opportunity for housing to be built. It was a perfect storm of sorts.

The lawsuit was brought in 1998 by Legal Aid of Marin, on behalf of Marin Family Action, which alleged the town failed to enact an approved housing element that would create zoning for housing that’s needed for future growth. The court ruled that Corte Madera needed to put a housing element in place that included ABAG-required affordable housing. The court also said the town needed to pick up the court costs of Legal Aid of Marin and the California Housing Law Project. Together, those bills ran close to $100,000. As a result of the settlement, the town ended up with a housing element and approved a 79-unit affordable complex, called San Clemente Place, which was completed in 2007 by EAH near the California Highway Patrol office.

“We looked at all that, saw the ABAG numbers and said, ‘This is perfect,’” Lappert says, referring to the Tamal Vista project. What’s more, it will include 18 units dedicated to workforce housing, a sticky issue all over Marin County.

Corte Madera Mayor Bob Ravasio, who’s a realtor when he isn’t wielding a gavel at public meetings, says the Tamal Vista approval process was longer and more complicated than it initially sounds, and he arrived at this conclusion by talking to planning types. He says the general plan process actually started way back in 2004 and was adopted five years later. And the housing element was OK’d in April 2011, after the town found out that ABAG said it needed to allow for the development of 244 new units by 2014. That number was dropped to 165 after the town received credit for 79 affordable units with the completion of the aforementioned San Clemente project.

So with just 165 units needed and 180 units teed up with the Tamal Vista project, the town is on the upside by 15 units. But in a way, that doesn’t really matter. ABAG came out with new numbers last year and, according to that data, the town needs more than 500 new units over 30 years.

After town officials and other elected officials across the county expressed disbelief at those projections, something happened. The numbers shrunk.

Now, ABAG says Corte Madera needs just 270 housing units. But don’t try talking to Lappert about any of ABAG’s numbers, because he’s all done. “Have you seen the job [creation] numbers they had? They say there will be 3,000 new jobs in Marin. Whose ass are they pulling these numbers out of? Are we all going to be doing each other’s laundry and mowing each other’s lawns?”

He waits a beat. “We [Corte Madera] understand that housing is needed. We understand that rich folks need someplace for their nannies to live.”

Mayor Ravasio says the town’s vote to quit ABAG is largely symbolic for the time being. “The downside to leaving ABAG, at this point, is still being evaluated. Our vote to leave doesn’t take effect for 15 months; right now, we’re still members. One downside would be that we may lose access to future grant money (ABAG acts as a clearinghouse for some state housing funds). However, in reviewing data for the last 10 years, we don’t see a lot of risk.”

Ravasio also mentions the possibility that his town will lose its influence with ABAG by pulling up stakes. But then he points out that the organization called for Corte Madera to zone for 244 units in a place that’s “built out.” His point is, what’s less than zero?

“There is zero downside to getting out of ABAG,” says Lappert, who’s been vocally advocating the move for a dozen years.

In the end, maybe everybody is getting what they want. Corte Madera has been seething over the job and housing proclamations coming down from ABAG for years. The latest move to tell the regional planning agency to pound sand comes with little risk. It costs the city about $2,300 per year to belong, so it will save some cash. And the only grant ABAG ever sent the town’s way was $60,000 for bicycle path construction—and, says Ravasio, “The town spent considerable additional funds to pay consultants to comply with the grant’s reporting conditions.” While the state can still crack the whip on the town when it comes to housing, in years past, it’s been pretty much a paper tiger.

Meanwhile, Lappert, Ravasio and the majority of the town council [Councilwoman Alexandra Cock voted against telling ABAG bye-bye] get to look independent and decisive.

As for MacFarlane Partners, it’s well aware of what Marin demographics and rental profiles look like. The WinCup complex is set up for public transit; it’s a very short drive to the ferry landing and walking distance to bus connections on Highway 101. Tenants are also a pleasant stroll from the largest old-school movie theater in Marin, Book Passage (the best bookstore in the county) as well as a shopping center and no less than 16 eateries and restaurants.

Perhaps the only party feeling down at this point is ABAG. And, according to published reports, Corte Madera hasn’t yet notified the agency that it’s withdrawing its membership, which runs until July 2013.

Nevertheless, ABAG’s Ezra Rapport was quoted recently as saying he plans on reaching out to Corte Madera Town Hall. “I’ll be contacting officials from Corte Madera myself to let them know we’re disappointed they didn’t communicate with us.”

That could be an interesting little chat. Here’s a little tip for Mr. Rapport: If you call councilman/officer Lappert and he hangs up in the middle of the conversation, it was an emergency.

Probably.

 

 

In this Issue

From Outlaw to Industry Leader

Dennis Hunter was born ahead of his time, and it cost him roughly a decade of his life, either underground and on the run, or behind bars. He co-founded CannaCraft, Inc., the highly successful S...

The Evolving Face of Cannabis

Welcome to NorthBay biz magazine’s inaugural Business of Cannabis issue. When I started working for the magazine as a freelance writer eight years ago, I would never have guessed I’d be ...

The State Of Cannabis

  The North Bay’s cannabis industry is becoming more stable as operators have largely recovered from the stark changes imposed by last July’s regulations. Businesses across the tri...

See all...

  

 

Upcoming Events


20-Aug-2019 01:00 pm


22-Aug-2019 04:00 pm