Praise the Density Gods: the Long Beach City Council has (finally) approved a project set to develop the three-decade-long empty lot at the southeast corner of Ocean and Pine in DTLB. The project? A 25-story mixed-use hotel development to be headed by China-owned, Seattle-based American Life, Inc.
Formerly home to the Jergins Trust Building, the property sold for $7M. American Life ousted Long Beach-based developer Ensemble—much to our agreement. Ensemble has taken on two residential developments that lack density and height: a five story building at 247 Seaside and another five-story stub at 442 Ocean. While their bid for site remains a mystery, what American Life brings to the table is impressive: 427 hotel rooms, 19,000 sq. ft. of prep space and meeting rooms, 8,000 sq. ft. of restaurant space and 28,000 sq. ft. of guest amenities, including a pool and sun deck. Even more, the project is also expected to incorporate a portion of Victory Park, which is now home to The Loop as well as provide 361 long-term jobs and 1,701 short-term jobs.
And what is on everyone’s mind, the Jergins Tunnel? The developer has agreed to incorporate the tunnel into its design somehow, providing public access to the long-shuttered but much-revered tunnel. While there are
“This particular site is extremely important to the City of Long Beach,” said Vice Mayor Suja Lowenthal. “This is a site that we have protected and guarded, and wanted to make sure that we waited for a development opportunity that allows it to be somewhat of a jewel in the crown.”
There’s an interesting caveat to the whole deal: it hinges on a transient occupancy tax (TOT) agreement where the City shares part of that tax with the developer. The amount? 50%. That’s right: American Life will keep 50% of the TOT revenue, or what is estimated to provide the development with some $27M over a 20-year period. The reason? To fill an “economic gap” of about $47M between the estimated cost of construction and the value of the future development.
Should the City disagree with the hotel brand chosen to represent the space, the contract can be terminated (and let’s hope we don’t get an empty lot for another 30 years).