Wednesday, June 28, 2000 $100 mil L.B. project OK'd   By John W. Cox, Staff writer LONG BEACH In a council chamber packed with supporters and opponents, the City Council gave final approval Tuesday to the $100 million Queensway Bay project, voting 7-2 to sell $43 million in bonds to support the waterfront entertainment, dining and retail complex. The decision came as crucial private negotiations continue with potential tenants such as Edwards Theatres, which hopes to open a 15-screen cinemaplex and an IMAX theater in the project. Barring last-minute leasing complications, Eric Mallory, vice president of Ohio-based Developers Diversified Realty, said his team tentatively plans to break ground in July. A council-imposed deadline for opening the project was extended Tuesday from May 31, 2001 to Oct. 31, 2001. "We appreciate the support of the council," Mallory said after the vote. The 7-2 council majority with dissents by 1st District Councilwoman Jenny Oropeza and 7th District Councilman Ray Grabinski carried through a series of three rather technical votes relating to the bond issue. The decision closes several years of public debate on Queensway Bay without a strong community consensus. More than 20 city residents testified against the project Tuesday on environmental and other grounds, while roughly half that many supporters from the business community rallied behind the project's estimated financial and tourism benefits. Belmont Heights resident Lynda Baxis called the project as an "ill-conceived, run-of-the-mill, cookie-cutter type project." "We want something better for the beach, for Long Beach," she said. Former 5th District Councilman Les Robbins sided with supporters in the business community, saying nearly $1 billion in proposed development projects downtown depend on the project moving forward. "Queensway Bay is a vital cog," Robbins said. If the council fails to approve the project, he added, "the aquarium certainly is going to be a victim." The Queensway Bay project is an 18-acre, 447,476-square-foot development south of Ocean Boulevard between the Aquarium of the Pacific and the Long Beach Convention and Entertainment Center. It is the commercial component of a 300-acre waterfront complex of the same name that includes the aquarium and Rainbow Harbor. Under the approved proposal, the project would consist of 12 buildings with more than 60 tenants, including the theaters, at least nine restaurants and two major retailers Cost Plus and Barnes & Noble. City staff estimate Queensway Bay will attract 10 million new visitors a year to downtown Long Beach and say it should generate $1.7 million a year new in new sales and business taxes and $800,000 a year in increased property tax revenue for the city. Although the project has been a goal of city planners for nearly a decade, few expected it to generate as much controversy as it has. Part of the debate has stemmed from the amount of public money proposed to be invested in the project. When the council selected San Diego-based developer OliverMcMillan in 1998, the project was to receive no city subsidy. The second-place bidder had asked the council to invest $38 million up front. The project proceeded without talk of a subsidy until early last year, when the council decided that OliverMcMillan's proposed parking structure lacked sufficient spaces. When it asked OliverMcMillan to add 700 spaces, bringing the total to 2,200, the developer insisted on the city's financial help. City Manager Henry Taboada negotiated a deal under which the city would forgive an estimated $4.5 million in water and building fees and kick in parking meter and other revenue the project is expected to generate for the city. In addition, the city has offered to forgive annual land lease payments of $1.45 million if the developer does not achieve a 12 percent profit over the project's first seven years. After seven years, the developer must pay half the rent even if it cannot meet that profit level. Protests also came from the downtown business community, concerned with potential competition. With the project so dependent on restaurants, Pine Avenue restaurateurs complained that the development would take away their business. Recently released city documents confirm that Pine Avenue is viewed as potential competition for Queensway Bay. A group of environmentalists has also tried to stop the project in favor of building a waterfront garden park. They say a garden would be more responsible and equally exciting as a tourist destination. Much of the council discussion Tuesday revolved around timing. After several delays, many council members said the time had come to stop negotiating and start building. "If we want a project built here, we'd better get with it now," 9th District Councilman Jerry Shultz said.