Published: Friday, May 24, 2002 DDR gets go-ahead for Pike   By John W. Cox, Staff writer LONG BEACH - After three years of setbacks, Developers Diversified Realty Corp. on Thursday got the last go-ahead it needed to begin building The Pike at Rainbow Harbor, a $100 million waterfront dining, entertainment and retail complex formerly known as the Queensway Bay project. Lease documents recorded at the Los Angeles County Registrar-Recorder's office Thursday afternoon gave Ohio-based DDR possession of one of the city's most valuable properties - 18 acres of land between the downtown convention center and the Aquarium of the Pacific. "People will see construction activity there very shortly," DDR spokesman Jeffrey Adler said. "We're very eager to see something emerge from the ground." Construction is expected to take between 15 and 18 months. Execution of the 66-year lease effectively settles a dramatic struggle that had pitted DDR and city officials against Long Beach environmentalists, Pine Avenue merchants and various skeptics. It also provides an answer to what will become of former beach property that sits vacant amid the downtown's highly touted rebirth. City officials predict that The Pike, with its 14-screen movie theater, 40,000-square-foot gaming arcade and at least 16 restaurants, will attract tourists and money from across Los Angeles and Orange counties. At least $4.5 million in taxpayer money has been dedicated to the project, not including countless staff hours and the city's sale of $43 million in bonds to pay for a 2,200-space parking garage at the project. Thursday's real estate transaction, coming on the eve of a deadline that, if missed, could have expelled DDR from the project, also averts lawsuits and countersuits that some had predicted would have been filed if the project did not move forward as planned. Any such delay could have pushed back the development by a year or more, which could have eroded developer interest in the entire downtown area. "How do you spell relief?" City Manager Henry Taboada quipped, as he showed off a celebratory cigar given to him by assistant city manager Jerry Miller. The final task before city staff now, Taboada said, is the sale of the bonds. That process is expected to begin May 31 and stretch over five to six weeks. For more than a decade city officials have pondered what to do with the Pike property, so named for the amusement zone that occupied the site from the early 1900s until 1979. DDR came into the picture in 1997, when it partnered with San Diego-based Oliver McMillan. That partnership fizzled in 2000, leaving the project in doubt. Adding to the uncertainties were leasing problems and the bankruptcies of two theater tenants that had agreed to be the project's anchors. While DDR hosted a long-delayed ceremonial groundbreaking last week, the final push was provided this week when Gov. Gray Davis authorized a land-swap agreement between the city and the State Lands Commission that removed development restrictions on the Pike site. The city gave the commission title to 10 acres of land along the Los Angeles River in exchange for the right to build retail and a movie theater on the Pike complex. Environmentalists say their fight against the project is not over. Citing recent changes in the project that they say were forbidden under the land-swap agreement, such as phasing in construction and changes in the total project size, they have threatened to push their case at future commission meetings. Even so, their recent lawsuit targeting the land-swap agreement was dismissed by a judge. Adler said that construction will begin within two weeks. "The property will be fenced in short order and demolition follows," he said. "And then grading the project is under way."