Published: Thursday, May 23, 2002 Lease will finalize Pike deal   By John W. Cox, Staff writer LONG BEACH - A key lease agreement is expected to be executed today that would allow Developers Diversified Realty Corp. to begin construction on the long-delayed Pike at Rainbow Harbor waterfront project, city officials said Wednesday. The lease is an all-encompassing document that would give DDR possession of about 18 acres of city land between the downtown convention center and the Aquarium of the Pacific, where the company intends to build a dining, entertainment and retail project. City officials said that execution of the lease represents the last on a long list of requirements contained in a 1998 development agreement. Sunday was the final deadline for all terms of that agreement to be met, after which time DDR could have lost its right to develop the project. All the city needs in order to close the lease, said City Manager Henry Taboada, is a sheaf of papers signed Tuesday by Gov. Gray Davis. That set of documents, expected to arrive in Long Beach from Sacramento today, authorizes a property exchange agreement between the city and the State Lands Commission. The agreement is intended to remove development restrictions on the Pike site. "The only outstanding document was the land-swap agreement," Taboada said. With the execution of the lease imminent, a spokesman for DDR said the company plans to begin construction soon. "Our hope is that we can fence the property and begin demolition in the next two weeks," DDR spokesman Jeffrey Adler said. Construction firms are ready to move onto the property, and their work is expected to be completed within 18 months, he said. The portion of the project north of Shoreline Drive is scheduled to be built first, followed by the actual waterfront portion, Adler said. DDR staged a ceremonial groundbreaking on the site last week. Before that, the company had performed construction work relating to a water main and storm drain on the site. But actual site preparation and construction had been put on hold pending execution of the lease. In anticipation of the governor's signature on the land-swap agreement, DDR and the city have already deposited numerous other documents into an escrow account that has been ready to go. More to come In many ways, closing the lease is only the beginning. The city still has to sell $43 million in bonds to support construction of a 2,200-space parking garage to serve the site. Vince Coughlin, special assistant to the city manager, said the bonds are scheduled to be offered for sale on May 31, and that the sale process probably will take five to six weeks. In addition, DDR still has leasing work of its own to finish. While its leasing team has already signed a 14-screen movie theater, a 40,000-square-foot GameWorks arcade and at least 16 restaurants, it still is working to sign retail tenants. Company executives have said they are optimistic that retailers likely will come aboard soon after construction begins. Taboada said he views DDR's still-evolving tenant list as the project's last big question mark. "We still don't have much in the way of certainty of what's coming on next," he said. "But I have great expectations on what's going to be there, because it's a great piece of real estate."