[A. CALL TO ORDER]
          [00:00:05]
          HARBOR COMMISSION MEETING FOR MONDAY, JANUARY 12TH,
2025. 
          CAN I GET A ROLL CALL, PLEASE? YES YOU MAY. COMMISSIONER WARWICK. 
          HERE. COMMISSIONER FALK. HERE. COMMISSIONER COLLER. 
          HERE. COMMISSIONER CHRZAN. HERE. COMMISSIONER BAUER. 
          PRESENT. COMMISSIONER CARLSON. HERE. AND CHAIR ABELMAN. 
          HERE. WE HAVE FULL ATTENDANCE AND WE CAN CONDUCT BUSINESS. 
          EXCELLENT. ALL RIGHT. LET'S, COMMISSIONER CHRZAN,
WILL YOU LEAD US? PLEASE STAND. YOUR RIGHT HAND OVER YOUR HEART. 
          I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA AND TO THE REPUBLIC FOR
WHICH IT STANDS. 
          ONE NATION UNDER GOD, INDIVISIBLE, WITH LIBERTY AND JUSTICE FOR ALL. 
          YOU MAY BE SEATED. THANK YOU. THANK YOU. OKAY. 
          [D. APPROVE ORDER OF AGENDA]
WE NEED TO APPROVE THE ORDER OF AGENDA. IS THERE A MOTION TO DO SO? MOTION TO APPROVE. SECOND. OKAY. LIKE THAT. VERY NICE. 
          ALL RIGHT. ALL IN FAVOR? AYE. OPPOSED? EXCELLENT. 
          HAS BEEN APPROVED. OKAY. WHERE ARE WE MOVING DOWN TO? 
          [E. BLUE FOLDER ITEMS - ADDITIONAL BACK UP MATERIALS]
ARE THERE ANY BLUE FOLDER ITEMS? YES WE DO. WE HAVE THREE ITEMS THAT ARE ALL RELATED TO
ITEM L.1, WHICH IS THE LEASING OVERVIEW PRESENTATION. IN YOUR BACKUP DOCUMENTATION,
YOU HAD A BUNCH OF JUST KIND OF BACKUP MATERIAL. 
          WE'RE ADDING THREE MORE REPORTS TO THAT. IT'S KIND OF VISITATION STATISTICS RELATED TO
INTERNATIONAL BOARDWALK, THE HARBOR IN GENERAL, AND THEN THE ATTENDANCE OR VISITATION SPIKE DURING BEACH LIFE
FESTIVAL. 
          SO THREE SEPARATE DOCUMENTS. THEY CAME IN AFTER 3 P.M.,
SO WE DIDN'T GET A CHANCE TO CIRCULATE THOSE. 
          BUT WE WILL EMAIL ALL OF YOU TOMORROW. EXCELLENT. 
          PERFECT. ANYTHING ELSE? THAT'S IT. OKAY, COOL. 
          [F. CONSENT CALENDAR]
CONSENT CALENDAR ITEM. F.1 F.2. IS THERE A MOTION TO APPROVE ITEMS F.1 AND F.2 APPROVAL
FOR THE AFFIDAVITS OF POSTING MINUTES COMMISSION FOR JANUARY 12TH AND FOR THE MINUTES FOR DECEMBER 8TH. 
          CAN I GET A MOTION TO APPROVE? MOTION TO APPROVE THE CONSENT CALENDAR. 
          ALL IN FAVOR? ALL IN FAVOR? AYE. OPPOSED. EXCELLENT. 
          CRUISING RIGHT ALONG HERE. OKAY. ITEM G NOTHING THERE. 
          [H. PUBLIC PARTICIPATION ON NON-AGENDA ITEMS]
ITEM H, HERE WE GO. PUBLIC PARTICIPATION ON NON-AGENDA ITEMS. THIS SECTION IS INTENDED TO PROVIDE MEMBERS OF THE PUBLIC WITH THE OPPORTUNITY TO COMMENT
ON ANY SUBJECT THAT DOES NOT APPEAR ON THIS AGENDA FOR ACTION. 
          THIS SECTION IS LIMITED TO 30 MINUTES. EACH SPEAKER WILL BE AFFORDED THREE MINUTES TO
ADDRESS THIS COMMISSION. 
          EACH SPEAKER WILL BE PERMITTED TO SPEAK ONLY ONCE. 
          WRITTEN REQUESTS, IF ANY, WILL BE CONSIDERED FIRST UNDER THIS SECTION. 
          ARE THERE ANY. ARE THERE ANY? YES, WE HAVE MARIA YESIL. 
          SO COME ON UP. 
          GOOD EVENING, CHAIR ABELMAN AND COMMISSIONERS. 
          HAPPY NEW YEAR. THANK YOU FOR THE OPPORTUNITY TO SPEAK WITH YOU TONIGHT. 
          IN TONIGHT'S AGENDA INCLUDES L.1 THE LEASING OVERVIEW OF PIER AND HARBOR PROPERTIES. 
          I'D LIKE TO OFFER PUBLIC COMMENT THAT CONNECTS LEASING STRATEGY WITH THE BROADER
DEVELOPMENT PRESSURES FACING REDONDO BEACH. 
          THIS IS AN ITEM THAT'S ON THE AGENDA TONIGHT. 
          OH, OKAY. SO I'LL WAIT UNTIL. OKAY, THEN. LET ME JUST GO WITH ONE NON AGENDA THEN LET ME
SEE. 
          SORRY. YOU KNOW. LET ME SEE. NON AGENDA ITEM. 
          OKAY. SO KING HARBOR COMMISSION NON AGENDA. PUBLIC COMMENT. 
          OKAY. SO GOOD EVENING CHAIR. THANK YOU FOR ALLOWING ME TO FOR PUBLIC COMMENT. 
          I'M HERE TONIGHT TO SPEAK BRIEFLY ABOUT BRANDING AND MARKETING,
SPECIFICALLY HOW KING HARBOR IS PRESENTED OR UNREPRESENTED IN THE CITY'S PRIMARY DIGITAL PRESENCE,
INCLUDING REDONDO AND ITS MOBILE INTERFACE. BASED ON THE CITY'S OWN HOMEPAGE AND MOBILE EXPERIENCE,
KING HARBOR APPEARS FRAGMENTED AND SECONDARY, RATHER THAN POSITIONED AS ONE OF REDONDO REDONDO BEACH CITIES
DEFINING CIVIC AND ECONOMIC ASSET ON THE MAIN WEBSITE,
KING HARBOR CONTENT IS BURIED UNDER GENERIC NAVIGATION 
          [00:05:02]
LABELS LIKE HARBOR UPDATE, REVITALIZATION, RATHER THAN CLEARLY ELEVATE AS A DESTINATION. AN ECONOMIC ENGINE AND PUBLIC ASSET ON MOBILE,
WHICH IS HOW MOST VISITORS, TOURISTS AND YOUNGER RESIDENTS ACCESS INFORMATION,
THE HARBOR IDENTITY IS EVEN LESS CLEAR. THIS MATTERS BECAUSE BRANDING IS POLICY. 
          WHAT THE CITY HIGHLIGHTS COMMUNICATES PRIORITIES TO RESIDENTS,
VISITORS, INVESTORS AND LEASEHOLDERS. 
          KING HARBOR IS A WORKING HARBOR ORIGINAL DESTINATION. 
          A MAJOR REVENUE SOURCE AND A GENERATIONAL PUBLIC ASSET. 
          YET THE CURRENT BRANDING DOES NOT REFLECT THE IMPORTANCE FROM A GOVERNANCE PERSPECTIVE. 
          THIS RAISES KEY QUESTIONS APPROPRIATE FOR KING HARBOR. 
          I JUST WANT TO EMPHASIZE ON THAT WORD, KING. WE NEED TO USE THAT MORE. 
          IS KING HARBOR BEING MARKETED CONSISTENTLY AND INTENTIONALLY? IS THE HARBOR? IS THE KING HARBOR TREATED AS A CORE IDENTITY OR A SIDEBAR? OUR BRANDING AND DIGITAL STRATEGY ALIGNED WITH LEASING,
ECONOMIC DEVELOPMENT, AND LONG TERM STEWARDSHIP GOALS. 
          THIS IS NOT ABOUT LOGOS OR COLORS. THIS IS ABOUT CLARITY. 
          I. I CAN'T PRONOUNCE THAT WORD. HIERARCHY. AND RESPECT FOR THE ASSET. 
          AS DEVELOPMENT PRESSURES INCREASE CITYWIDE, CLEAR,
HARD, CLEAR KING HARBOR BRANDING BECOMES EVEN MORE CRITICAL. IF WE DON'T DEFINE KING HARBOR INTENTIONALLY,
OTHERS WILL DEFINE IT FOR US. 
          TIME. THANK YOU. THANK YOU. 
          THERE IS NO ONE ON ZOOM AND NO ECOMMENTS. THANK YOU. 
          ALL RIGHT, I, WE HAVE NO EX PARTE. WE HAVE NO PUBLIC HEARINGS,
NO ITEMS CONTINUED FROM PREVIOUS AGENDAS, 
          [L. ITEMS FOR DISCUSSION PRIOR TO ACTION]
ITEM L. LEASING OVERVIEW. YEAH. THANKS EVERYBODY. 
          WE HAVE INVITED BRIAN CAMPBELL, OUR LEASING AGENT,
TO THE MEETING, TO KIND OF GO OVER SOME OF THE THE VACANCIES, THE TYPE OF USES OUT THERE, THE VISITATION OF THE HARBOR. 
          WE TRY TO DO THIS QUARTERLY FOR YOU GUYS TO GET A HANDLE ON WHAT'S HAPPENING OUT THERE
FROM A COMMERCIAL LEASING STANDPOINT ONE OF YOUR PURVIEWS AS A HARBOR COMMISSIONERS TO PROVIDE GUIDANCE TO TO US AS WE SEEK OUT TO REDUCE VACANCIES AND NEW
BUSINESSES. 
          SO THIS IS YOUR OPPORTUNITY TO ASK ANY QUESTIONS ABOUT EXISTING LEASES,
HOW THE PROCESS WORKS, AND THE BREAKDOWN OF THE TYPES OF USES WE HAVE OUT THERE. 
          AND IF YOU HAVE ANY GUIDANCE FOR US, WE WILL CERTAINLY TAKE IT. 
          SO I'M GOING TO INTRODUCE BRIAN CAMPBELL TO KIND OF WALK US THROUGH THE PRESENTATION. 
          AND THEN WE'RE AVAILABLE FOR ANY COMMENTS AND QUESTIONS THAT YOU MAY HAVE. 
          THANKS, CRAIG. CHAIRMAN, COMMISSIONERS, THANKS FOR THE INVITATION AGAIN TO COME TONIGHT TO
TALK ABOUT MY FAVORITE SUBJECT, WHICH IS, WHICH IS LEASING. SO WHAT I'VE GOT HERE IS A NUMBER OF DIFFERENT REPORTS. 
          IT'S A LOT OF PAGES, BUT I WANTED TO START FROM A MACRO STANDPOINT,
WHICH IS THE SOUTHERN CALIFORNIA MARKET, AND THEN HONE IT DOWN TO THE SOUTH BAY RETAIL,
SOUTH BAY OFFICE, THEN SPECIFICALLY THE MOST RECENT LEASING REPORT FOR JANUARY FOR PIER PLAZA, WHICH IS OUR OFFICE SPACE. AND THEN TAKE A LOOK AT SOME SOME TRAFFIC. 
          AND, YOU KNOW, THAT WE'RE SEEING IN INTERNATIONAL BOARDWALK USING SOME OF OUR SOFTWARE
FROM FROM PLACERAI, DO SOME COMPARISONS YEAR OVER YEAR. AND THEN ALSO I RAN SOME NUMBERS ON BEACH LIFE
FESTIVAL, WHAT HAPPENS DURING THAT FIRST WEEK OF MAY EACH YEAR? AND IT'S KIND OF INTERESTING TO SEE HOW THAT DYNAMIC IS CHANGING OVER TIME WITH THE NUMBER
OF PEOPLE THEY'RE BRINGING, AND ALSO THE IMPACT IT'S HAVING ON THE OTHER RETAIL TENANTS IN THE AREA. 
          IN OTHER WORDS, IS IT A NET BONUS FOR THEM HAVING BEACH LIFE YOU KNOW,
HAPPENING OR IS IT OR IS IT REALLY CANNIBALIZING AWAY FROM FROM OTHER BUSINESS AND YOU'LL SEE A LITTLE BIT LATER ON IT. 2024 IT DIDN'T LOOK LIKE IT WAS HELPING OUR
EXISTING RETAIL TENANTS DOWN AN INTERNATIONAL BOARDWALK, BUT I THINK IN 2025 IT IT DID. SO IT'S INTERESTING JUST TO UNDERSTAND THOSE DYNAMICS. 
          IT HELPS US FROM A LEASING STANDPOINT AND ALSO FROM THE CITY FROM A POLICY STANDPOINT. 
          [00:10:04]
THEY SET THE POLICY AND THEN WE IMPLEMENT THAT IN,
YOU KNOW, YOU KNOW AS IT IMPACTS LEASING. 
          SO I'M GOING TO GO THROUGH ALL OF THESE REPORTS SEQUENTIALLY. 
          IF YOU HAVE ANY QUESTIONS STOP ME. BUT I'LL GRADUALLY TALK THROUGH ALL THESE REPORTS. 
          THEN I'LL OPEN IT UP FOR QUESTIONS AND ANSWERS. 
          AND I'M HERE AS LONG AS, AS LONG AS YOU NEED. 
          SO THE FIRST REPORT IS SOUTHERN CALIFORNIA, THE RETAIL MARKET. 
          IF YOU CAN READ THESE NUMBERS, I DON'T HAVE A ZOOM BUTTON ON THIS,
BUT EFFECTIVELY, WHAT IT IS SHOWING IS THE DIFFERENT TYPES OF OF VACANCY RATES IN THE, IN THE DIFFERENT TYPES OF RETAIL CENTERS THAT ARE
AVAILABLE OUT THERE, EVERYTHING FROM MALLS ON, ON THE UP SIDE TO JUST GENERAL LOCAL CENTERS. 
          FROM A LEASING STANDPOINT, SOUTHERN CALIFORNIA IS LOSING TENANTS. 
          IT'S LOSING POPULATION. THE LEASING IS PROBABLY AS BAD AS IT'S BEEN SINCE JUST A COUPLE OF YEARS AFTER THE FINANCIAL CRISIS BACK 2011,
2012, TENANTS ACROSS THE BOARD. 
          NOW, THIS IS NATIONALLY, BUT IN PARTICULAR SOUTHERN CALIFORNIA. 
          THE LOS ANGELES AREA IS IS PROBABLY THE WORST AREA IN THE COUNTRY FOR FOR RETAIL RIGHT
NOW. 
          IT'S IT'S JUST BLEAK. IT'S A COMBINATION OF,
YOU KNOW, LACK OF HOUSING, THE EXPENSIVE HOUSING YOU KNOW, TAXES, EXPENSES. IT'S JUST, YOU KNOW, EVERYTHING IS IS CONSPIRING AGAINST US. 
          YOU'VE GOT YOU'VE GOT HOLLYWOOD, YOU KNOW, HOLLYWOOD LOSING A LOT OF BUSINESS. 
          THAT'S 20% OF THE OVERALL ECONOMIC POWER IN SOUTHERN CALIFORNIA. 
          SO THAT THERE'S, YOU KNOW, THERE'S NATIONAL POLICIES THAT ARE THAT ARE IN PLACE,
WHICH ARE NOT WHICH ARE NOT HELPING US OUT. 
          BUT THIS NUMBER HERE AND ALL THIS IS AVAILABLE TO YOU,
OBVIOUSLY ONLINE, WE HAVE HARD COPIES IF YOU WANT TO FOLLOW UP ON IT ON IT LATER. 
          BUT YOU CAN SEE WHERE THE NET ABSORPTION HAS FOR EVER SINCE COVID HAS JUST GONE DOWN,
DOWN, DOWN. THERE'S A LITTLE BIT OF A SPIKE IN THE FOURTH QUARTER. 
          A LOT OF THAT IS FROM THE WEST HARBOR PROJECT DOWN IN SAN PEDRO. 
          I DON'T KNOW HOW MANY OF YOU ARE FAMILIAR WITH THAT. 
          BUT THEY BROUGHT IN ABOUT 300,000FT² OR SO OF SPACE THERE,
ABOUT 80% LEASED. 
          SO A LOT OF THE ABSORPTION IN SOUTHERN CALIFORNIA REALLY HAPPENED JUST RIGHT,
RIGHT DOWN THERE. 
          SO IT SKEWS THE NUMBERS A BIT, BUT YOU CAN SEE WHAT THE FORECAST IS GOING FORWARD. 
          AND IT IS JUST NEGATIVE ABSORPTION WHICH WHICH MEANS WE'RE LOSING MORE TENANTS THAN THEY
WERE GAINING OR TENANTS ARE, ARE DOWNSIZING. OR TAKE STARBUCKS FOR EXAMPLE,
SHUTTING DOWN A CERTAIN NUMBER OF THEIR OF THEIR STORES ACROSS THE ACROSS THE BOARD. 
          SO RENTS SAME THING HERE. YOU KNOW, THE VERTICAL LINE RIGHT TO THE LEFT OF THE WORD
FORECAST. 
          RIGHT THERE IS WHERE WE ARE RIGHT NOW. YOU CAN SEE WHERE RENTS ACROSS THE BOARD HAVE BEEN
DROPPING FOR A NUMBER OF YEARS. 
          THEY'RE EXPECTED TO CONTINUE TO DROP THROUGHOUT MOST OF 2026. 
          AND THEN THEY THINK WE MIGHT START SEEING AN INCREASE,
YOU KNOW, BACK UP UP THROUGH 2028 2029. 
          BUT IF YOU IF YOU DRAW A HORIZONTAL LINE ACROSS WHERE,
SAY MID 2028 BACK TO WHERE IT WAS IN MID 2021. I MEAN, THAT'S EIGHT YEARS. WE MIGHT GET BACK TO WHERE THEY WERE BEFORE. 
          OKAY, SO IN THE MEANTIME FOR LANDLORDS, THEIR EXPENSES KEEP GOING UP. 
          YOU KNOW INSURANCE KEEPS GOING UP, YOUR REPAIRS KEEP GOING UP. 
          I MEAN, ROOF REPAIR I MEAN ALL THAT SORT OF STUFF JUST KEEPS COMING UP. BUT THE RENTS JUST
AREN'T AREN'T THERE. 
          SO THERE'S THERE'S PRESSURE ON LANDLORDS. THERE'S PRESSURE ON TENANTS. 
          THE ECONOMY. WE JUST WE JUST TALKED ABOUT THAT. 
          I MEAN YOU CAN YOU CAN READ THAT FOR, FOR YOURSELF. 
          THIS GOES INTO A LITTLE BIT MORE DETAIL OF WHAT YOU CAN JUST READ IN THE LOCAL NEWSPAPERS
ABOUT THE DIRECTION OF OUR ECONOMY. 
          IT'S HARD. THERE'S SOME SOME LINEAR NUMBERS RIGHT THERE WHERE LOS ANGELES COMPARES TO THE
UNITED STATES AS FAR AS EMPLOYMENT BY INDUSTRY AND THOUSANDS AND ALL THOSE RED NUMBERS IS LOSS OF IS
LOSS OF JOBS. 
          THERE'S THE UNEMPLOYMENT RATE THERE. YOU CAN SEE WHERE CALIFORNIA IS IN THE GOLD AND
UNEMPLOYMENT RATE REALLY SPIKED DURING COVID BECAUSE OF THE SHUTDOWNS AND IT JUST HASN'T CAUGHT UP WITH WHERE THE REST OF THE COUNTRY IS. 
          AND IT'S NOT EXPECTED TO FOR FOR QUITE SOME TIME FOR PROBABLY ANOTHER FIVE YEARS OR SO. 
          SO HERE'S AN INTERESTING DYNAMIC. OKAY. MEDIAN HOUSEHOLD INCOME. 
          THE FORECAST IS THAT IT'S GOING TO CONTINUE TO GO UP. 
          [00:15:02]
BUT IF YOU TAKE A LOOK AT THE GRAPH RIGHT BELOW THAT,
POPULATION GROWTH, IT'S GOING DOWN. 
          SO WHAT'S HAPPENING HERE, WHAT WE THINK WITHOUT WITHOUT DOING REAL IN-DEPTH DRILLING IN ON
THE ECONOMICS HERE, WHAT WE THINK IS HAPPENING IS THAT A LOT OF MIDDLE INCOME PEOPLE ARE LEAVING. 
          THEY'RE LEAVING THE STATE. AND WHO'S LEFT ARE BUSINESS OWNERS,
HIGHLY PAID PROFESSIONALS. 
          ALSO, AS THOSE YEARS GO BY, PEOPLE ARE IN THEIR CAREERS A LITTLE BIT LONGER. 
          THEY TEND TO MAKE MORE AND MORE MONEY SO THAT MEDIAN INCOME IS GOING UP WHILE THE
POPULATION IS IS GOING DOWN. 
          THAT'S NOT HEALTHY FOR GENERAL RETAIL EITHER. 
          WHEN YOU START LOSING, YOU KNOW, A LOT OF THAT MIDDLE CLASS. 
          NOW SOME OF THAT MIDDLE CLASS IS MOVING UP TO THE UPPER CLASS. 
          YOU KNOW, OVER, OVER THOSE YEARS. BUT THOSE NUMBERS IN GENERAL ARE NOT GOOD FROM A REAL
ESTATE PERSPECTIVE. 
          ALL RIGHT. SO I'M GOING TO SEGUE DOWN TO THE BEACH CITIES PALOS VERDES AREA. 
          THE ONLY REASON WE INCLUDED PALOS VERDES IS THAT'S JUST WHERE COSTAR,
YOU KNOW, INCLUDES THEM. 
          I MEAN, I WISH THEY WOULD JUST DO A BEACH CITIES BECAUSE IT'S REALLY A COMPLETELY
DIFFERENT MARKET, BUT THESE ARE THE NUMBERS THAT WE'VE GOT. SO THIS IS THE MOST RECENT FOURTH QUARTER BEACH
CITIES RETAIL REPORT. 
          AND YOU CAN SEE UP AT THE TOP OF THE REVENUE. 
          OKAY, THE RED NUMBER 66.8000FT². THAT'S THE NEGATIVE ABSORPTION,
OKAY. 
          IN A HEALTHY MARKET, YOU'VE ALWAYS GOT POSITIVE ABSORPTION. 
          WE'RE GOING IN THE OTHER DIRECTION. NOW VACANCY RATES ARE NOT BAD,
5.6%, BUT THE ASKING RENTAL RATE GROWTH, WHAT THE TYPICAL HISTORICAL RENTAL RATE GROWTH,
WHICH IS ABOUT 1.5% PER YEAR, IT'S ACTUALLY A MINUS TWO. 
          SO AGAIN THAT'S REALLY A NEGATIVE A NEGATIVE SIGN. 
          SO FROM A LEASING STANDPOINT YOU CAN SEE IN MORE DETAIL HERE THE NET ABSORPTION AND NET
DELIVERIES AND VACANCIES. 
          DELIVERIES IS NEW BUILDINGS BEING BROUGHT BACK TO MARKET. 
          OR OLDER BUILDINGS THAT HAVE BEEN THAT HAVE BEEN GUTTED AND BEEN BEEN REHABBED. 
          SO WEST HARBOR AGAIN SKEWED THESE NUMBERS SO THAT IT SHOWS MORE NET ABSORPTION THAN, THAN REALLY HAS HAS HAPPENED. BUT ON THE BOTTOM,
THE BOTTOM VACANCY RATE GRAPH WHERE YOU CAN SEE WHERE MALLS TOOK A HUGE HIT DURING COVID BUT HAVE COME BACK VERY STRONG,
WHEREAS EVERY OTHER CATEGORY OF RETAIL, NEIGHBORHOOD CENTER, JUST A GENERAL RETAIL STOREY,
A STORE, A POWER CENTER, STRIP CENTER, ETC. HAS JUST PLATEAUED OUT AT ABOUT AT ABOUT 5%. 
          SO HERE'S THE AVAILABILITY RATE. AND IT'S JUST THAT MEANS HOW MUCH SPACE IS HAS BEEN
AVAILABLE. 
          HOW MUCH HAS BEEN LEASED UP. SO YOU CAN SEE EXCEPT FOR THE GOLD COLORED LINE WHICH IS
MALLS WHICH HAVE HAD THE MOST DRAMATIC DOWN. 
          AND THEN RECOVERY. EVERYTHING ELSE IS JUST IS JUST FLAT. 
          SO AGAIN THIS FOLLOWS VERY CLOSELY THE SOUTHERN CALIFORNIA MARKET ASKING RENT GROWTH. 
          IT'S JUST GOING DOWN. HERE'S THE MARKET ASKING RENT PER SQUARE FOOT HAS BEEN GOING DOWN,
EXCEPT FOR MALLS DOWN AT THE BOTTOM BECAUSE THEY'VE SEEN THE MOST DRAMATIC RECOVERY. BUT FOR THE LAST YEAR, RENTS HAVE GENERALLY BEEN GOING DOWN. 
          NOW, IF I COULD JUST SKIP DOWN TO WHERE WE ARE,
WE HAVE NO VACANCY IN OUR RETAIL RIGHT NOW. 
          SO BOTH FISHERMAN'S WHARF INTERNATIONAL BOARDWALK,
THE MARINA OVER THERE, CAPTAIN KIDD'S CALIFORNIA SURF CLUB, ETC. WE HAVE NO VACANCY RIGHT NOW. THE ONLY VACANCIES WE HAVE IS IS IN SOME OF OUR OFFICE
SPACE AT PIER PLAZA. 
          SO OUR RENTS ARE PEGGED WITH A 3% ANNUAL INCREASE. 
          OUR RETAIL RENTS. SO OUR RENTS ARE GOING UP. OUR VACANCY IS BETTER THAN IT WAS,
YOU KNOW, THAN IT IS GENERALLY. SOME PEOPLE WOULD SUGGEST THAT WE SHOULD RAISE OUR RENTS. 
          THEN, YOU KNOW, IF WE'RE FULL, THEN MAYBE WE'RE NOT CHARGING ENOUGH. 
          WHAT I WOULD SAY IS THAT MUNICIPALLY OWNED REAL ESTATE SHOULD BE LOOKED AT DIFFERENTLY
THAN PRIVATE OWNED REAL ESTATE OR INSTITUTIONAL REAL ESTATE. 
          THE REASON WHY YOU'RE INTERESTED IN CASH FLOW. 
          YOU'RE INTERESTED IN CASH FLOW, FOOT TRAFFIC,
THE VIBE, THE ENVIRONMENT. 
          THAT'S THAT'S DOWN THERE. WHY PRIVATE LANDLORDS,
INSTITUTIONAL LANDLORDS TOLERATE A CERTAIN AMOUNT OF VACANCY IS BECAUSE THAT'S HOW THEY PUSH RENTAL RATES UP. THEY'RE GOING TO SUFFER A CERTAIN AMOUNT OF VACANCY. 
          BUT THAT'S HOW THEY VALUE THEIR PROPERTIES. THAT'S HOW THEY GO OUT AND REFINANCE. THAT'S
HOW THEY SELL THEM BASED ON WHAT THEIR WHAT THEIR RENTAL RATES ARE. 
          THEY'LL TOLERATE FIVE, SEVEN, EIGHT, NINE, 10% VACANCY RATE IF THEY CAN SQUEEZE THOSE
NUMBERS UP HIGHER. 
          THAT'S NOT WHAT YOU'RE TRYING TO DO HERE. SO THAT'S THAT'S WHY WE'RE HAPPY. 
          [00:20:05]
IT'S 100% LEASE. AND ALL OF OUR LEASES, AS I SAID BEFORE,
HAVE GOT TO BAKED IN 3% ANNUAL INCREASE ON THEM. 
          SO REDONDO BEACH FROM A RETAIL STANDPOINT IS IS DOING PRETTY GOOD. 
          I'LL TALK ABOUT A LITTLE BIT LATER ABOUT WHAT MY THOUGHTS ARE AS FAR AS THE FUTURE RENTAL
RATES, AND PERHAPS HOW WE OUGHT TO BE SHIFTING OUR FOCUS A LITTLE BIT FROM A MARKETING
STANDPOINT. 
          ALL RIGHT. HERE'S AN OFFICE SUBMARKET REPORT. 
          SAME AREA BEACH CITIES PALOS VERDES. THIS IS THE ONLY PLACE WHERE WE HAVE WE HAVE VACANCY. 
          PIER PLAZA'S GOT ABOUT 67,000FT² OF SPACE OR SO. 
          AND WE'VE GOT ABOUT 7000FT² OR SO OF VACANCY. 
          WE'RE ABOUT 89% LEASED. WE'VE WE'VE LOST SOME TENANTS. 
          WE'VE GAINED SOME TENANTS. WE HAD EIGHT NEW TENANTS THIS,
THIS LAST YEAR THAT WE'RE ABLE TO GET THROUGH THROUGH THE CITY. 
          SOME ARE EXPANDING AND AND SOME ARE NEW. WE'VE GOT A NEW ONE THAT'S COMING UP NEXT MONTH
FOR ONE OF OUR SMALLER VACANT SPACES. 
          IT'S AN INSURANCE AGENCY. SO IF YOU GO THROUGH THE OFFICE MARKET,
IT'S, NET ABSORPTION IS DOWN, ASKING RENTAL RATES ARE A LITTLE BIT BETTER. VACANCY RATE IS HIGHER. 
          PART OF THAT IS BECAUSE OF THAT DYNAMIC I JUST TALKED ABOUT IS THAT YOU KNOW,
OFFICE OWNERS TYPICALLY WILL TOLERATE A HIGHER VACANCY RATE BECAUSE THAT'S HOW THEY KEEP THEIR THEIR VALUES PUSHED UP. SO IT'S 9%. WE'RE AT 11%. 
          WE'RE LAGGING A LITTLE BIT ON THAT. YOU CAN TAKE A LOOK AT THE AT THE NET ABSORPTION HAS
BEEN BAD. 
          THE VACANCY RATE ON THE BOTTOM GRAPH THERE IS FOR THE BEACH CITIES PALOS VERDES MARKET
AREA FOR FOUR AND FIVE STAR BUILDINGS. 
          THESE ARE BRAND NEW, THESE ARE BRAND NEW OFFICE BUILDINGS,
LIKE WHAT YOU MIGHT SEE OVER THERE IN HAWTHORNE BOULEVARD OR OR SOME OF THE NEWER ONES BEING BUILT, YOU KNOW, ALONG THE PACIFIC COAST,
PACIFIC COAST HIGHWAY. 
          WE'RE NOT A 4 OR 5 STAR PROJECT. WE'RE PROBABLY A TWO PLUS STAR OR SO. 
          AND YOU'LL SEE THAT GRAPH. DOWN. I THINK I MISSED THAT. 
          I THINK I MISSED THAT PAGE, BUT LET ME SKIP FORWARD TO THIS. 
          THIS IS THE MARKET ANNUAL RENT GROWTH. YOU CAN SEE IT'S SLIGHTLY BETTER THAN THAN RETAIL. 
          THE FORECAST IS SLIGHTLY BETTER THAN THAN RETAIL. 
          SO OFFICE DOESN'T LOOK QUITE AS BAD FOR FOR THE SOUTH BAY AREA. 
          NOW IF YOU LOOK AT OTHER PARTS OF LOS ANGELES,
DOWNTOWN IN PARTICULAR, IT'S A DISASTER. 
          I MEAN, IT'S 20 PLUS PERCENT VACANCY RATE. YOU'RE SEEING HIGH RISE BUILDINGS BEING
FORECLOSED ON. 
          I MEAN, IT'S IT HASN'T WE HAVEN'T SEEN ANYTHING LIKE THAT SINCE PROBABLY AT ONE POINT IN
THE LATE 1980S, JAPANESE INSTITUTIONAL OWNERS OWNED OVER 50% OF ALL OF DOWNTOWN L.A.. 
          AND THEN THAT COLLAPSED WHEN THE JAPANESE ECONOMY WENT DOWN AND HAS ONLY RECENTLY STARTED
TO RECOVER, YOU KNOW, 30, SOME 30 SOME YEARS LATER. BUT DOWNTOWN L.A. 
          IS BAD RIGHT NOW. SO WHERE WE WOULD LIKE TO SEE THIS COMING YEAR IS LEASE UP A LITTLE BIT
MORE OF OUR VACANT SPACE DOWN THERE AT PIER PLAZA. 
          IT'S AN OLDER PROJECT, NEEDS A LOT OF WORK, HAD A LOT OF ROOF LEAKS. 
          YOU KNOW, IN THIS LAST STORM THE CASH FLOW IS,
IS BASICALLY COVERING THE EXPENSES DOWN THERE. 
          BUT WE NEED TO DO THAT BECAUSE IF YOU HAVE A VACANT PROJECT,
YOU ALL SORTS OF BAD THINGS ARE GOING TO START HAPPENING. 
          I MEAN, YOU'RE GOING TO HAVE AN UPTICK IN VANDALISM,
YOU'RE GOING TO HAVE, YOU KNOW, IT'S GOING TO BECOME A DE FACTO SHELTER FOR, YOU KNOW, FOR HOMELESS FOLKS, CRIME, ETC. JUST BAD THINGS HAPPEN FROM THAT. 
          SO KEEPING TENANTS LIKE JERRY TECHNOLOGY, OUR BEST AND BIGGEST TENANT DOWN THERE,
HAPPY IS A GREAT THING. 
          HAVING SAVOIR FAIRE, FOR EXAMPLE, DOWN THERE IS A GREAT THING AS FAR AS INCREASING THE
VIBE AND THE USABILITY AND FOOT TRAFFIC OF PEOPLE AFTER THEY PICK THEIR KIDS UP AND WALK AROUND DOWN IN THE PIER AND AND EAT OR GO SIGHTSEEING. 
          SO THESE NUMBERS, ALL YOU GOT TO DO IS JUST LOOK AT THE RED ON HERE AND JUST SEE THE
DIRECTION THAT THAT THAT THINGS HAVE BEEN GOING SINCE 2014 AND WHERE THEY'RE GOING. ALL RIGHT. HERE'S HERE'S THE PAGE I WAS LOOKING FOR. 
          SO LOOK AT THE BOTTOM GRAPH HERE. THE ONE AND TWO STAR RENT AND VACANCY. 
          THAT'S THAT'S MORE WHERE PIER PLAZA WOULD PROBABLY WOULD PROBABLY FIT IN. 
          SO YOU COULD SEE THAT THIS, THIS CLASS OF BUILDING HAS BEEN STRUGGLING FOR FOR QUITE SOME
TIME. 
          OKAY. WE THINK IT WILL IMPROVE OVER THE NEXT COUPLE OF YEARS. 
          BUT AGAIN, IT'S GOING TO IT'S GOING TO REQUIRE A CONTINUING INVESTMENT IN KEEPING THAT
PROPERTY, KEEPING THAT PROPERTY UP AND SUITABLE FOR, FOR LEASING. 
          [00:25:07]
AND IF I COULD JUST INTERJECT SOMETHING REAL QUICK,
UNLESS YOU GEEK OUT ON THIS STUFF LIKE I DO, THIS IS JUST GOING TO MAKE YOUR EYES ROLL UP. 
          OKAY. BUT FOR SOME OF YOU THAT FIND LITTLE BITS AND PIECES OF THIS THAT YOU'RE INTERESTED
IN, THAT'S WHERE THE QUESTIONS AND ANSWERS AND THINGS LIKE THAT I COULD DRILL INTO A LITTLE
BIT MORE. 
          SO I APOLOGIZE A LITTLE BIT FOR THE DRYNESS OF RUNNING THROUGH ALL THESE NUMBERS,
BUT I THINK IT'S GOOD TO HAVE AN IDEA OF THE BIG PICTURE AND HOW WE FIT INTO IT. OKAY. SO THIS IS THE LATEST MONTHLY LEASING REPORT JUST FOR PIER PLAZA. 
          SO THIS IS JUST OUR OFFICE SPACE. SO YOU ALL KNOW WHERE PIER PLAZA IS. 
          THAT PICTURE WAS TAKEN ON FRIDAY WITH OUR DRONE. 
          SO THE VACANCIES AT PIER PLAZA, YOU CAN SEE FISHERMAN'S WHARF COMPLETELY LEASED. 
          INTERNATIONAL BOARDWALK COMPLETELY LEASED. FORMER FUN FACTORY. 
          THAT'S NOT TECHNICALLY AVAILABLE RIGHT NOW. SO WE DON'T CONSIDER THAT AS PART OF OUR,
YOU KNOW, REAL VACANCY. WE'RE ALREADY TALKING TO SOME PEOPLE THAT MIGHT BE INTERESTED IN THAT. 
          THE MARINA, THINK CAPTAIN KIDD'S CALIFORNIA SURF CLUB,
THE CANTINA. 
          THAT'S 100% LEASED. SO YOU CAN SEE WHERE OUR OUR REAL VACANCIES ARE. 
          IT'S IN THAT SECOND LINE, PIER PLAZA, 89%. WE'VE GOT JUST OVER 7000FT² AVAILABLE. 
          AND WE'RE OPTIMISTIC WE'LL GET WE'LL GET A GOOD CHUNK OF THAT LEASED OVER THE NEXT SIX
MONTHS OR SO. 
          SO AGAIN, THIS IS A REVERSAL OF THOSE NUMBERS JUST SHOWING THE ACTUAL VACANCIES 0% 11%. 
          FORMER FUN FACTORY OBVIOUSLY IS IS AVAILABLE. 
          MARINA 0%. SO ACROSS ALL PROPERTIES WE'VE GOT 36,937FT² OF AVAILABLE SPACE, BUT 29,000FT OF THAT IS THE FORMER FUN FACTORY SPACE,
WHICH I THINK WILL BE A GREAT LOCATION ONCE THE WORK THAT'S DONE THAT NEEDS TO BE DONE IN THE PARKING GARAGE ABOVE IT, AND WE GET THE RIGHT TENANT,
THAT'S THAT'S IN THERE. 
          SO THIS IS A LITTLE SNAPSHOT AS TO WHERE WE STAND VIS A VIS THE TENANTS THAT ARE ON MONTH
TO MONTH LEASES AND ALSO UPCOMING LEASE EXPIRATIONS. 
          I DIDN'T GET A CHANCE TO TAKE A LOOK AT THESE NUMBERS FROM A COUPLE OF YEARS AGO,
BUT I RECALL THE TOTAL AMOUNT OF SQUARE FEET AT ONE POINT. THAT WAS MONTH TO MONTH WAS OVER 50%. THAT'S DANGEROUS FROM A LANDLORD WHEN YOU'VE
GOT OVER HALF YOUR TENANTS ON MONTH TO MONTH LEASES, BECAUSE IF SOMETHING UNEXPECTED HAPPENS TO THEIR BUSINESS OR TO THEIR MARKET
IN COVID AND THEY'RE SHUT DOWN, THEY'RE 30 DAYS AWAY FROM BEING ABLE TO CANCEL THEIR LEASE. 
          THAT'S NOT GOOD FOR, THAT'S NOT GOOD FOR OWNERS. 
          SO OUR GOAL HAS BEEN TO REDUCE THOSE MONTH TO MONTH TENANTS AND HAVE THEM ON LONGER TERM
LEASES, AND WE'VE MADE GREAT PROGRESS ON THAT. SO WE'VE ONLY GOT 27% OF OUR SPACE STILL ON MONTH
TO MONTH VACANCIES. 
          I THINK WE'LL PROBABLY GET THAT DOWN INTO THE TEENS OVER THE NEXT SIX MONTHS OR SO. 
          AND THEN UPCOMING LEASE EXPIRATIONS THIS YEAR WE'VE GOT A FEW 2027. 
          WE'VE WE'VE WE'VE GOT SOME MORE. SO WE ALWAYS REACH OUT TO THOSE TENANTS WELL IN ADVANCE
OF THOSE LEASE EXPIRATIONS AND FIND OUT WHAT THEIR, WHAT THEIR INTENTIONS ARE. SO THAT DOESN'T INCLUDE THE BIG LEASES EXPIRING. 
          THAT'S. THE MASTER LEASE. 
          PORTOFINO, BOTH OUTSIDE, PIER PLAZA, FISHERMAN'S WHARF,
INTERNATIONAL BOARDWALK AND THEN MOLE D. 
          THAT'S WHAT I THOUGHT. JUST CHECKING. YEAH. THANK YOU. SORRY. NOW WE TRACK ALL THOSE. 
          I MEAN, WE PAY ATTENTION TO IT, BUT. THAT'S CORRECT. 
          WE'RE NOT INVOLVED IN THOSE IN THOSE MASTER LEASES. 
          AND. OKAY, SO HERE I'M DRILLING INTO THE OVERALL REDONDO BEACH HARBOR AREA. 
          OKAY. THERE'S THE OVERLAY. THIS IS USING A SOFTWARE PROGRAM CALLED PLACERAI. 
          I THINK WE ARE PROBABLY THE ONLY ONES IN THE AREA THAT HAVE THIS. 
          I KNOW THE HERMOSA BEACH CHAMBER OF COMMERCE BOUGHT IT ABOUT A YEAR OR SO AGO AND THEN
DIDN'T RENEW IT. 
          IT WAS TOO EXPENSIVE. WE WERE AN EARLY ADOPTER WITH THE COMPANY. 
          WE MADE AN EFFORT TO TALK TO THEM YOU KNOW, ABOUT IT. 
          AND SO WE WERE ABLE TO GET IN ON A, ON A PRETTY GOOD DEAL. 
          AND SO IT'S VERY VALUABLE INFORMATION, BUT IT'S EXPENSIVE FOR MOST PEOPLE TO GET. 
          SO WE'VE GOT THAT PERIODICALLY. WHEN THE CITY NEEDS DATA OR SOME NUMBERS RUN,
WE CAN RUN THAT. 
          [00:30:03]
I KNOW I DID ONE FOR YOU FOR WITH THAT WITH THAT BAR OVER ON AVIATION,
I THINK SOME TIME AGO. 
          ANYWAY, WE'VE GOT THAT CAPABILITY. DOESN'T COST THE CITY ANYTHING. 
          AND WE CAN RUN THOSE, WE CAN RUN THOSE NUMBERS. 
          SO THIS IS THE OVERLAY THAT I WANTED TO TAKE A LOOK AT YEAR OVER YEAR. 
          THIS IS 2020 FOUR FOOT TRAFFIC VERSUS 2025 FOOT TRAFFIC. 
          SO THIS IS A LITTLE BIT HARD TO READ. BUT IF YOU LOOK AT THE VISIT YEAR OVER YEAR FOR JUST FOR INTERNATIONAL BOARDWALK, IT'S UP A COUPLE OF PERCENT YEAR OVER TWO
YEARS. 
          IT'S UP A LITTLE BIT. HERE'S A LITTLE BIT BETTER GRAPH. 
          NOW THE BAR GRAPH IS 2024. 2025 AND A GRADUAL GROWTH. 
          NOW YOU CAN SEE IT LOOKS LIKE IT'S APRIL 2000. 
          LOOKS LIKE IT'S IT'S APRIL, BUT IT'S ACTUALLY THE FIRST WEEK OF MAY. 
          THAT VERY LARGE SPIKE IS BEACHLIFE FESTIVAL. SO YOU CAN SEE WHERE THEY DEFINITELY BROUGHT
IN A LOT MORE PEOPLE THAN THAN THAN WHAT WE'RE TYPICALLY COMING THE FIRST WEEK OF MAY. THIS RIGHT HERE SHOWS YOU IT'S A HEAT MAP SHOWING WHERE
EVERYBODY COMES FROM. 
          AND WHAT'S INTERESTING IS, I MEAN, OBVIOUSLY THE HIGHEST NUMBER OF PEOPLE IS GOING TO BE
IN THE IMMEDIATE AREA, BUT ALSO THERE'S A LOT OF PEOPLE FROM THE VALLEY. 
          THERE'S A LOT OF PEOPLE FROM YOU KNOW, UP PAST THE DOWNTOWN AREA. 
          AND LOOK AT THE NUMBERS COMING FROM SAN DIEGO. 
          I MEAN, IT'S PRETTY INTERESTING TO SEE THAT,
THAT PEOPLE WILL TRAVEL ALL THAT DISTANCE AND END UP DOWN ON INTERNATIONAL BOARDWALK. 
          SO WE ARE A DESTINATION FOR FOR, YOU KNOW, A CERTAIN NUMBER OF PEOPLE OUT THERE. 
          AND THAT'S JUST DRIVE TIME. THAT'S JUST TO GIVE YOU AN IDEA OF OF HOW LONG IT TAKES TO TO
DRIVE TO INTERNATIONAL BOARDWALK FROM VARIOUS PARTS OF, OF SOUTHERN CALIFORNIA. AND HERE'S SOME DEMOGRAPHIC INFORMATION. 
          THEY'LL SHOW YOU THE AVERAGE HOUSEHOLD INCOME,
THE MEDIAN HOUSEHOLD INCOME. 
          IT'S PRETTY GOOD NUMBERS COMPARED TO THE REST OF SOUTHERN CALIFORNIA. 
          I MEAN, JUST THE AREA IN GENERAL WITH ITS PROLIFERATION OF HIGH TECH AND,
YOU KNOW, AND HIGHER END HOUSING, YOU KNOW, FOR EXAMPLE, JUST ATTRACTS AND RETAINS,
YOU KNOW, A LOT OF PEOPLE THAT HAVE GOT A HIGHER MEDIAN INCOME THAN WHAT YOU TYPICALLY SEE ACROSS THE REST OF SOUTHERN CALIFORNIA. SO WE'RE IN,
ON PAPER, A GOOD MARKET. 
          SO THAT'S GOOD FOR THE CITY'S, YOU KNOW, RETAIL BUSINESS OVERALL RETAIL BUSINESS FROM A
REAL ESTATE STANDPOINT IT'S GOOD FOR US ALSO MEANS MEANS OPPORTUNITY. 
          SO THIS IS THE HOURLY VISITS, WHICH IS WHICH IS INTERESTING. 
          WHAT WE'RE LOOKING FOR ON ON THIS, WHEN WE LOOK AT A SPECIFIC TENANT,
FOR EXAMPLE, WE LIKE TO SEE WHAT THEIR TYPICAL HOURLY VISITS ARE. 
          WE DON'T WANT TO HAVE ALL OF OUR TENANTS ALL HAVING THEIR CUSTOMERS AT THE SAME TIME. 
          WE LIKE TO SPREAD THAT, SPREAD THAT OUT A BIT. 
          NOW YOU'RE ALWAYS GOING TO SEE MORE PEOPLE COMING ON THE WEEKENDS. 
          YOU'RE ALWAYS GOING TO SEE MORE PEOPLE ON THE AFTERNOONS TYPICALLY ON THAT. 
          BUT THE MORE WE CAN FLATTEN OUT THOSE, THOSE HOURS THAT PEOPLE ARE THERE IS A GOOD,
HEALTHY SIGN FOR, FOR FOR WHAT WE'RE TRYING TO DO FROM A LEASING STANDPOINT. 
          IT'S ALSO A HEALTHY SIGN FOR OUR TENANTS. AND THIS IS DAYS OF,
DAYS OF THE WEEK. 
          THIS IS PRETTY OBVIOUS. I ACTUALLY THOUGHT SUNDAY MIGHT BE HIGHER THAN SATURDAY,
BUT THIS IS JUST WHERE THOSE WHERE THOSE NUMBERS FALL. 
          OKAY. THIS NEXT ANALYSIS THAT WE RAN ON PLACER IS INTERNATIONAL BOARDWALK DURING THE FIRST
WEEK OF MAY THROUGH MAY 10TH, WHICH IS BEACH LIFE FOR 2024 AND 2025. AND IT'S INTERESTING TO SEE HOW THESE NUMBERS RUN. 
          AGAIN, THERE'S THE OVERLAY JUST INTERNATIONAL BOARDWALK,
AND WE WANTED TO SEE THE DYNAMIC THAT BEACH LIFE FESTIVAL HAD ON INTERNATIONAL BOARDWALK. NOW WE COULD SQUEEZE THIS DOWN AND TAKE A LOOK AT EVEN
SPECIFIC TENANTS IF WE NEED TO, BUT I JUST WANTED TO TAKE A LOOK AT OVERALL INTERNATIONAL BOARDWALK. 
          AND BLUE IS 2025. RED IS 2024. SO YOU CAN SEE THE DYNAMIC WAS SUBSTANTIAL AND JUST PURE NUMBER OF PEOPLE. THE VISIT FREQUENCY PRETTY CLOSE TO THE SAME
AVERAGE DWELL TIME. 
          PRETTY MUCH THE SAME VISITS YEAR OVER YEAR. BIG INCREASE YEAR OVER TWO YEARS. 
          [00:35:04]
BIG INCREASE. SO YOU COULD DRAW FROM THIS, YOU KNOW,
THIS BASIC MACRO DATA THAT BEACH LIFE IS A GOOD THING. OKAY. IT'S BRINGING PEOPLE DOWN HERE THAT THAT PROBABLY WOULDN'T HAVE COME
OTHERWISE. 
          AND A FAIR AMOUNT OF THAT IS SPILLING OVER INTO OUR TENANTS. 
          NOW, I TALKED TO THE TENANTS DOWN THERE AND I'M HEARING SLIGHTLY DIFFERENT STORIES FROM
THEM. 
          IF YOU'RE A RESTAURANT OR A BAR, FOR EXAMPLE,
YOU SEE A BIG SPIKE WHEN BEACH LIFE HAPPENS. 
          IF YOU'RE SELLING T SHIRTS OR TRINKETS OR SOMETHING LIKE THAT,
I'M HEARING FROM TENANTS THAT THAT THEY SEE A DROP OFF IN BUSINESS. 
          AND I GUESS THAT I GUESS THAT MAKES SENSE. BUT OVERALL,
FROM A NET, IT APPEARS THAT IT'S A POSITIVE THING THAT THEY THAT THEY ARE BRINGING TO THE TABLE. I TALKED EARLIER ABOUT HOW WE WANT TO SMOOTH THAT,
SMOOTH THAT BAR OUT AS FAR AS AS WHAT DAYS OF THE WEEK PEOPLE ARE COMING. 
          AND BEACH LIFE IS A NICE OVERLAY ON THAT, AND WE THINK IT BRINGS IN NEW PEOPLE,
AND WE ALSO THINK IT HELPS SPREAD OUT THE BUSINESS OVER MORE DAYS AND MORE HOURS OF THE DAY. ALL RIGHT. SO HERE'S THE VISITOR TREND AGAIN. 
          BLUE IS LAST YEAR 2025. RED IS THE YEAR BEFORE. 
          AND THE NUMBERS ACROSS THE BOTTOM IS THE DATE. 
          SO IT'S MAY 1ST, SECOND ALL THE WAY THROUGH,
ALL THE WAY THROUGH THE 10TH. 
          AND LAST YEAR THE NUMBERS DROPPED OFF ON THE ON THE FOURTH BUT THEN PICKED UP DRAMATICALLY. AS YOU CAN SEE THE BLUE LINE DOES AS AS TIME WENT ON IN THAT WEEK
WHEN BEACH LIFE FESTIVAL WAS HAPPENING. 
          THIS IS A GREAT GRAPH. THIS TRACKS THAT CENTER CIRCLE IS INTERNATIONAL BOARDWALK. 
          THIS TRACKS WHERE PEOPLE ARE COMING FROM BEFORE THEY GET TO INTERNATIONAL BOARDWALK AND
WHERE THEY GO AFTERWARDS. 
          AND YOU COULD DRILL INTO EVEN MORE DETAIL ON THIS. 
          NOW WE DON'T HAVE THIS DATA, BUT THE GOVERNMENT DOES. 
          WE VOLUNTARILY PROVIDE IT ALL WITH OUR PHONES AND THEY CAN DRILL INTO. 
          WE CAN'T, BUT THEY CAN DRILL INTO WHERE YOU LIVE,
HOW MANY KIDS YOU GOT, HOW MUCH MONEY YOU MAKE, WHAT KIND OF CAR YOU DRIVE, WHO YOUR BEST FRIENDS ARE,
WHO YOU TALK TO. 
          I MEAN, IT'S AND WE SURRENDER THIS FOR THE GREATER GOOD. 
          I HOPE AND CAN ONLY HOPE. BUT THIS IS GREAT DATA HERE BECAUSE YOU CAN SEE WHERE PEOPLE ARE
COMING FROM. 
          SEASIDE LAGOON. THEY'RE COMING TO INTERNATIONAL BOARDWALK. FAIR NUMBER OF THEM. 
          A BUNCH OF THEM ARE COMING. MOST OF THEM ARE COMING STRAIGHT FROM HOME. 
          NOW PEOPLE ARE GOING, ALMOST A QUARTER OF THEM ARE GOING STRAIGHT HOME AFTER THEY'RE DONE
WITH WITH INTERNATIONAL BOARDWALK. 
          BUT A BUNCH ARE GOING BACK TO SEASIDE LAGOON. WELL,
SEASIDE LAGOON THINK BEACH LIFE FESTIVAL, AND THEN YOU CAN SEE THE ONES THAT ARE STAYING AT THE AT THE HOTEL. 
          THEY'RE COMING OVER FROM THE HOTEL, THEY'RE GOING BACK TO THE HOTEL. 
          SO GREAT DATA. AND AGAIN, THIS IS JUST SURFACE LEVEL STUFF WE COULD REALLY DRILL FURTHER
INTO. 
          THIS JUST TAKES A LITTLE BIT MORE TIME. OKAY. 
          THIS IS 2024. SO YOU CAN SCROLL BACK AND FORTH. 
          SO THIS IS LAST YEAR. THIS IS THE YEAR BEFORE 2024. 
          SIMILAR NUMBERS. KINCAID'S. YEAH THERE'S AN INTERESTING DYNAMIC THAT THAT WE SAW IS
THERE'S A LOT OF PEOPLE THAT START AT KINCAID'S ON SOME OTHER DATA THAT WE'VE RUN,
AND THEN THEY END UP OVER AT BARLEY VIBES, AND CONVERSELY, THEY'LL START OUT AT BARLEY VIBES AND THEN THEY'LL END UP HAVING DINNER
OVER AT KINCAID'S. 
          DO YOU KNOW WHERE THE MOST FREQUENTED DEPARTMENT STORE IS? THAT PEOPLE THAT COME TO INTERNATIONAL BOARDWALK LIKE TO SHOP AT? TARGET. THAT'S THEIR FAVORITE PLACE. I CAN TELL YOU WHICH FAST FOOD RESTAURANT THAT THAT
MOST PEOPLE PREFER THAT COME DOWN INTERNATIONAL BOARDWALK. 
          SO IT'S GREAT DATA. AND I'M JUST PRESENTING THIS BECAUSE I'D LIKE TO,
YOU KNOW, HAVE YOU GET SOME IDEAS AS YOU GO THROUGH ALL OF YOUR DISCUSSIONS AND DELIBERATIONS AND LOOK AT DIFFERENT THINGS? IF YOU YOU KNOW,
IF YOU KNOW THAT WE'VE GOT THIS CAPABILITY, YOU CAN ALWAYS REACH OUT THROUGH THE THROUGH THE HARVARD ECONOMIC DEVELOPMENT DEPARTMENT. 
          AND WE'LL DO OUR BEST TO BE ABLE TO PROVIDE THAT TO YOU. 
          I THINK IT JUST, YOU KNOW, WILL HELP WITH WITH BETTER POLICY ANALYSIS AND DECISIONS. 
          SO HERE'S DAILY VISITS. YOU CAN SEE WHERE LAST YEAR IN THE BLUE DURING BEACH LIFE WAS MUCH
HIGHER THAN THE YEAR BEFORE. 
          SO I THINK CHAIR ABELMAN, WE WERE TALKING BEFORE THE MEETING STARTED. 
          2024 DURING BEACH LIFE. IT LOOKED LIKE IT HURT OUR OVERALL RETAIL TENANTS. 
          [00:40:03]
BUT THEN THAT TURNED AROUND IN 2025. SO SO THE DYNAMIC CHANGE THERE,
I DON'T KNOW IF IT WAS JUST MORE PEOPLE OR WHAT THE OTHER DYNAMIC WAS. 
          WE DIDN'T DRILL DOWN THAT DEEP FOR THE PURPOSES OF THIS PRESENTATION. 
          AND THEN THERE'S HOURLY HOURLY VISITS. SO YOU CAN SEE DURING THE AFTERNOON HOURS FROM 12
TO 4 OR 5 P.M. OR SO, A LOT MORE PEOPLE WERE THERE DURING BEACH LIFE THAN THERE WERE THE YEAR
BEFORE. 
          OKAY, HERE'S THE FAVORITE PLACES THAT A LOT OF THOSE PEOPLE LIKE TO GO TO DEL AMO FASHION
CENTER, R/10 SOCIAL HOUSE, VETERAN'S PARK. THEY PARK OVER THERE OR JUST THROW A BLANKET DOWN OR
SOMETHING LIKE THAT. 
          CAPTAIN KIDD'S. SOME OF THEM ARE COMING TO BUILDING 100 AT FISHERMAN'S WHARF. 
          THAT'S BOB RESNICK'S PROJECT. AND THAT'S SOME OF THE FAVORITE PLACES. 
          THAT'S 2025 FAVORITE PLACES THAT PEOPLE LIKE TO GO TO,
THAT FREQUENT INTERNATIONAL BOARDWALK. 
          THAT'S THE IBEW AT THE TOP. THIS IS THE YEAR BEFORE 2024,
SO WE COULD SEE HOW PEOPLE CHANGE THEIR HABITS AS THE DYNAMIC DOWN IN THE HARBOR CHANGES. 
          SO BEACH LIFE COMES ALONG. THAT OBVIOUSLY WAS A BIG CHANGE IN THE DYNAMIC OR OTHER TENANTS
WHEN WE FINALLY WHEN WE ULTIMATELY GET THE FUN FACTORY LEASED, WE'RE GOING TO SEE A BIG CHANGE IN DYNAMICS DOWN THERE. 
          ALSO, I THINK WE'LL SEE A HUGE UPTICK IN NUMBER OF PEOPLE COMING. 
          I THINK IT'S REALLY GOING TO SPILL OVER AND BENEFIT THE REST OF OUR BUSINESSES DOWN THERE
WHO PAY A PERCENTAGE OF THEIR RENT TO TO THE CITY. 
          SO THE SOONER WE CAN GET THAT DONE, THE BETTER,
OBVIOUSLY. 
          OKAY. AND THEN THE LAST REPORT THAT I'VE GOT HERE IS BEACH LIFE 2025 OVERVIEW. 
          SO THAT'S THAT'S THE OVERLAY THAT'S ROUGHLY SEASIDE LAGOON CALIFORNIA SURF CLUB AND WHERE
BEACH LIFE WAS. 
          AND YOU CAN TAKE A LOOK AT HOW, WHAT OR WHAT THEIR AVERAGE DWELL TIME IS COMPARED TO THE
INTERNATIONAL BOARDWALK. INTERNATIONAL BOARDWALK WAS 71-72 MINUTES. 
          THIS IS 179 ALMOST ALMOST THREE HOURS. AND AGAIN,
THAT'S THAT HEALTHY DYNAMIC THAT IF YOU CAN GET PEOPLE TO STICK AROUND A LOT MORE, NUMBER ONE, THEY'LL BECOME MORE FAMILIAR WITH THE HARBOR,
THEY'LL BECOME MORE FAMILIAR WITH EVERYBODY ELSE THAT'S DOWN THERE BESIDES JUST THE CONSTANT THAT THEY'RE GOING TO. THEY'LL BE MORE FAMILIAR WITH THE HOTELS,
WITH THE REST OF THE RETAIL. 
          IT'S ALL A HEALTHY THING. AND AGAIN, THE NUMBERS SPEAK FOR THEMSELVES. 
          THERE'S THE, THERE'S THE NUMBER OF PEOPLE THAT WENT TO BEACH LIFE IN THAT OVERLAY AREA
VERSUS THE REST OF THAT QUARTER. SO THIS IS A QUARTERLY NUMBER APRIL THROUGH JUNE 2025. 
          AND ALL THOSE LITTLE SPIKES THAT LOOK LIKE YOUR,
YOUR YOUR HEART RATE MONITOR THAT'S OVER THE WEEKENDS. 
          BUT BEACH LIFE JUST DWARFED AT ALL AS FAR AS BRINGING THE NUMBER OF PEOPLE DOWN TO THAT
PARTICULAR PART OF THE HARBOR. 
          AGAIN, THIS IS JUST A DRIVE TIME OVERLAY. I MEAN,
WE'RE REALLY PRETTY CLOSE TO A GOOD CHUNK OF THE SOUTH BAY. 
          I DON'T THINK A LOT OF PEOPLE REALIZE THAT 15 MINUTES AWAY,
YOU'RE YOU'RE OUT. 
          YOU KNOW, YOU'RE PUSHING THE 110 FREEWAY, SO WE'VE REALLY GOT A LARGE MARKET TO PULL FROM. 
          YOU KNOW, AS AS WE'RE OUT TALKING TO BIG POTENTIAL TENANTS FOR THE FORMER FUN FACTORY
SPACE, THIS SORT OF DATA THEY'RE GOING TO WANT TO LOOK AT,
THEY'RE GOING TO WANT TO SEE, YOU KNOW, ARE WE ARE WE WORTH A TEN MINUTE DRIVE? ARE WE WORTH A 15 MINUTE DRIVE? WHAT'S THE DEMOGRAPHICS OUT THERE IN THOSE AREAS? CAN WE MAKE OUR NUMBERS WORK? WELL, WE CAN HELP THEM WITH THAT WITH THAT DECISION. 
          SO A QUESTION, IF I READ THIS CORRECTLY, SAY THE VAST MAJORITY OF PEOPLE ATTENDING BEACH
LIFE ARE WITHIN THIS 50 MILE OR 15 MINUTE DRIVE TIME. 
          IS THAT WHAT YOU'RE SAYING? YOU CAN, YOU CAN LOOK AT IT THAT WAY. 
          SO THIS IS THIS IS A DRIVE TIME MAP JUST TO BEACH LIFE. 
          YEAH. YOU'RE RIGHT. SO THAT THAT'S THEIR 15 MINUTE MARKET. 
          NOW I'VE GOT OTHER HEAT MAPS THAT SHOW YOU WHERE SPECIFICALLY PEOPLE ARE COMING FROM FOR
BEACH LIFE AS COMPARED TO WHERE PEOPLE ARE COMING FROM JUST FOR INTERNATIONAL BOARDWALK, AND YOU COULD SEE A DEFINITE CHANGE IN THAT HEAT MAP AS TO THE
DEMOGRAPHIC. 
          AND, YOU KNOW, THAT'S COMING TO BEACH LIFE VERSUS OUR TYPICAL DEMOGRAPHIC THAT'S COMING TO
INTERNATIONAL BOARDWALK. 
          AND YOU'LL SEE BEACH LIFE PULLS A LOT MORE PEOPLE FROM EL SEGUNDO,
MANHATTAN BEACH, HERMOSA BEACH THAN PERHAPS INTERNATIONAL BOARDWALK DOES. 
          SO AGAIN, WE SEE THAT. WE SEE THAT AS A, AS A,
AS A HEALTHY SIGN, SO LONG AS THEY'RE NOT CANNIBALIZING FROM OUR OTHER EXISTING BUSINESSES 
          [00:45:07]
DOWN THERE. AND THAT'S JUST FROM A PURE TRAFFIC STANDPOINT. 
          THAT'S NOT SPEAKING FROM AN ECONOMIC CONTRACTUAL STANDPOINT,
YOU KNOW, WHATEVER THAT IS, YOU KNOW, BETWEEN BEACH LIFE AND THE CITY. SO JUST FROM A DEMOGRAPHIC STANDPOINT,
THEY ARE DEFINITELY PULLING IN PEOPLE THAT MAKE A SIGNIFICANTLY HIGHER MEDIAN INCOME. WE KNOW THEIR HOUSES ARE WORTH 3 TO $400,000 MORE PER
HOUSE THAN THE AVERAGE INTERNATIONAL BOARDWALK PERSON. SO A TON OF DATA THAT YOU CAN USE A LOT OF DIFFERENT WAYS. 
          SO. SO THERE'S SOME OF THE DEMOGRAPHIC AND IF WE IF YOU WANT I'M NOT GOING TO DO IT HERE. 
          BUT IF YOU WANTED TO SCROLL BACK AND TAKE A LOOK AT THE HOUSEHOLD MEDIAN INCOME FOR BEACH
LIFE VERSUS INTERNATIONAL BOARDWALK, YOU'LL SEE BEACH LIFE IS IS NOTICEABLY HIGHER. 
          AND THAT'S A GOOD THING. THAT'S JUST HOURLY VISITS. 
          THAT'S JUST DAYS OF THE WEEK. HOW MANY PEOPLE ARE COMING? AND THAT'S IT. SO I DON'T KNOW HOW LONG THAT TOOK. 
          I JUST WANTED TO GIVE YOU A BIG OVERLAY. WE LOVE THIS KIND OF STUFF. 
          THAT'S WHY WE DO IT. AND AND HOPEFULLY IT'LL GIVE YOU SOME IDEAS AS TO WHAT'S GOING ON IN
THE MARKET, HOW WE SEE THE MARKET, AND PERHAPS GIVE YOU SOME IDEAS AS TO HOW YOU CAN UTILIZE SOME OF
THE TOOLS THAT WE HAVE AT, YOU KNOW, AT THE CITY'S DISPOSAL. YEAH. IF I COULD JUST INTERJECT A LITTLE BIT. THIS IS A
LOT OF THE DATA THAT WE CAN SHOW PROSPECTIVE BUSINESS OWNERS WHEN THEY APPROACH SOMEONE LIKE BRIAN AND SAY, HEY, I THINK I MIGHT BE INTERESTED. 
          NOT SURE. WE HAVE AN RFP OUT RIGHT NOW FOR THE FUN FACTORY. 
          THIS IS VERY APPLICABLE DATA FOR THEM TO SHOW JUST HOW MANY PEOPLE DO COME DOWN TO THE
WATERFRONT FOR VISITATION, HOW FAR AWAY THEY COME. ALL THIS INFORMATION IS GOOD TO ATTRACT THAT THAT BIG TIME
DEVELOPER. 
          HE ALLUDED TO THE FUN FACTORY NOT BEING IN HIS VACANCY RATE. 
          AND IT'S BECAUSE RIGHT NOW IT HAS TO REMAIN VACANT SO THAT WE CAN DO WORK ON THE PARKING
STRUCTURE ABOVE. 
          THAT WORK HAS STARTED AS OF LAST WEEK. I JUST ALLUDED TO AN RFP TO ATTRACT A NEW BUSINESS
THAT'S UNDERWAY RIGHT NOW THROUGH LARRY KOSMONT. 
          HE'S LOOKING FOR BROKERS. HE'S LOOKING FOR BUSINESSES. 
          HE'S LOOKING FOR DEVELOPERS. WHAT WE'RE LOOKING FOR REALLY IS A IS A FAMILY FRIENDLY
ENTERTAINMENT VENUE, NOT NECESSARILY A RESTAURANT OR A RETAIL STORE. 
          THOSE TWO THINGS COULD BE A COMPONENT OF THE ENTERTAINMENT,
BUT JUST SOMETHING A LITTLE LARGER, SOMETHING A LITTLE DIFFERENT. [INAUDIBLE] JOE'S CRAB SHACK SITE ISN'T ON HERE, EVEN THOUGH THAT'S A PART OF MOLD. 
          WE ARE IN DEEP NEGOTIATIONS WITH MARINE MAMMAL CARE CENTER AT THIS POINT. 
          THAT'S LIKELY THE DIRECTION THAT THAT IS GOING TOWARDS,
WHICH IS MORE OF A REHABILITATION CENTER FOR SEA LIONS. 
          SO IF YOU HAVE ANY QUESTIONS FOR BRIAN ABOUT NEXT STEPS,
WHO WE'RE GOING AFTER, DIVERSITY OF USES, NOW IS THE TIME. IF YOU HAD ANY QUESTIONS ABOUT THE DATA THAT HE JUST PRESENTED,
NOW'S THE TIME AS WELL. 
          YOU MENTIONED THAT THE RATES HAVE A BUMP OF 3%. 
          BUT IN MY EXPERIENCE, THAT'S JUST TO COVER INFLATION. 
          AND INFLATION HAS PROBABLY BEEN STEEPER THAN THAT. 
          I'M SURE IT IS. ON IT, THE THE 3% ANNUAL BUMP ON ALL OF OUR LEASES THAT THAT WE'RE DOING
IS ON FOR RETAIL. 
          IT'S ON THE BASE RENT. WHAT WE HOPE IS THAT THE PERCENTAGE RENT WILL DWARF THAT. 
          SO IT'S IT'S EITHER THE PERCENTAGE RENT OR THE BASE RENT,
WHICHEVER IS HIGHER. 
          THESE ARE ALL TRIPLE NET LEASES FOR THE MOST PART. 
          THE I CALL THEM MODIFIED TRIPLE NET ON IT BECAUSE TAXES,
FOR EXAMPLE, GET BILLED DIRECTLY TO THE TENANTS THROUGH THE COUNTY BECAUSE MUNICIPALLY OWNED REAL ESTATE DOES NOT PAY TAXES. 
          SO THE THE TAXES ARE NOT BUILT INTO THE RENTAL RATES,
FOR EXAMPLE, THAT THE OFFICE TENANTS PAY. 
          THEY GET THAT ABOUT A YEAR AFTER THEY MOVE IN OR SO IT'S CALLED A POSSESSORY USE TAX. 
          AND THEY'RE BUILT DIRECTLY ON IT. SO I CALL IT A MODIFIED YOU KNOW,
TRIPLE NET BECAUSE THERE'S THE SANITATION DISTRICT, THERE ARE SOME OTHER SERVICES THAT THE CITY PROVIDES TO THOSE TENANTS DOWN THERE. 
          THEY GET BILLED SEPARATELY FOR THAT, SO THEY DON'T. 
          IT'S NOT AS SIMPLE AS THEY JUST PAY FOR THEIR ELECTRICITY,
THEIR WATER, THINGS LIKE THIS. 
          THERE'S THERE'S OTHER THINGS THAT THEY PAY FOR IN ADDITION TO THEIR BASE RENT. 
          NOW, SINCE WE'RE ON THIS TOPIC, WE'VE GOT SOME TENANTS THAT ONLY PAY THEIR BASE RENT
BECAUSE THEY JUST DON'T SELL ENOUGH IN ORDER FOR THAT PERCENTAGE RENT TO BE HIGHER THAN THAT. 
          AND WHAT MY PLAN IS, IS AS WE GET THOSE SPACES BACK IS TO REPLACE THEM. 
          [00:50:05]
LOOK VERY CLOSELY AT AT FUTURE TENANTS THAT ARE GOING TO BE PAYING THE PERCENTAGE RENT
INSTEAD OF JUST THE BASE RENT. 
          I WOULD LIKE TO RAISE THE BASE RENT UP QUITE A BIT FROM WHERE IT IS RIGHT NOW TO TO MORE
CLOSELY MATCH WITH THE RIVIERA IS GETTING OR HERMOSA BEACH. I MEAN, WE DON'T WE DON'T WANT TO BE THAT HIGH BECAUSE WE'LL PRICE
OURSELVES OUT OF THE MARKET. 
          BUT WE WANT TO BE ABLE TO MOVE UP WITH THAT. BUT WE'RE LOOKING CLOSELY AT PEOPLE'S GROSS
SALES AND PRIOR EXPERIENCE THAT THEY'VE GOT, YOU KNOW, A GENERAL RULE OF THUMB THAT YOU WANT TO SEE FOR RETAIL,
AT LEAST IN THE SOUTH BAY, IS ABOUT $1,000 OF SALES PER SQUARE FOOT. SO IF YOU'VE GOT 1000 SQUARE FOOT SPACE,
LITTLE RETAIL STORE, YOU'D LIKE TO SEE THEM MAKING ABOUT $1 MILLION IN GROSS SALES OR SO IF THEY'RE PAYING AN 8
TO 10% PERCENTAGE RENT ON THAT, THEN YOU KNOW THE CITY GETS 80 TO $100,000. IF THEY'RE ONLY PAYING TWO AND A HALF DOLLARS
PER SQUARE FOOT ON THEIR BASE RENT, OKAY, IT'S A FRACTION OF THAT. SO YOU CAN SEE THAT THE DELTA IS PRETTY IS PRETTY WIDE
THERE. 
          WE'VE GOT GREAT TENANTS THAT CONSISTENTLY WHO HAVE NEVER JUST PAID THEIR BASE RENT. 
          THEY'RE ALWAYS PAYING PERCENTAGE RENT. SO WE WANT TO SHIFT AWAY. 
          NOW THAT WE'VE GOT FULL OCCUPANCY, WE WANT TO SHIFT MORE TOWARDS SELECTIVE,
REALLY HIGH QUALITY TENANTS IN THE FUTURE RATHER THAN SOMEBODY WHO IS FINANCIALLY SECURE THAT CAN RUN A BUSINESS. 
          WE WANT TO TAKE A LOOK AT THEIR NUMBERS, AND WE ALSO WANT THAT BASE RENT TO BE HIGHER. 
          SO IF THEY DO MISS THEIR NUMBERS, THE CITY SEES MORE MORE INCOME ON IT. 
          NOW WE'RE A LITTLE BIT UNIQUE BECAUSE AS YOU CAN SEE FROM THE REST OF THE MARKET,
RENTS ARE GOING DOWN, BUT WE'RE ON THE WATER. NOW, WE DON'T HAVE A BRAND NEW CENTER DOWN THERE. 
          INTERNATIONAL BOARDWALK USED TO BE BOAT STORAGE FOREVER. 
          NOBODY SEEMS TO KNOW WHEN THAT ACTUALLY STARTED SHIFTING OVER BACK AROUND WORLD WAR TWO OR
SOMETHING LIKE THIS, WHERE SOMEBODY, SOMEBODY PUT IN THE FIRST RETAIL SPACE DOWN THERE FROM BOAT STORAGE,
AND THEN IT JUST GREW, AND THAT'S WHAT IT IS NOW. SO, YOU KNOW, WE DON'T HAVE A PURPOSE BUILT RETAIL STRIP DOWN
THERE ON INTERNATIONAL BOARDWALK. 
          IT'S ALL BEEN MODIFIED OVER THE YEARS, BUT IT'S RIGHT ON THE WATER. 
          AND THAT'S A UNIQUE SPOT FOR US TO TO BE IN. AND I THINK WE CAN CAPITALIZE ON THAT GOING
GOING FORWARD. 
          YOU HAD MENTIONED THAT THE VACANCY RATE THERE RIGHT NOW FOR THE OR RATHER,
THE MONTH TO MONTH TENANTS ARE ABOUT 30, JUST OVER 30%. AND YOU'RE HOPING TO GET THAT DOWN INTO THE TEENS. 
          YES. OKAY. IS THERE HISTORICALLY IS THERE A REASON THAT YOU'VE SEEN MORE MONTH TO MONTH
THAN YOU WOULD HAVE LIKED TO? IS THAT A NATURE OF IS THAT BY DESIGN OR WAS THAT. 
          CENTERCAL LITIGATION. OKAY. SO THIS THIS DATES WAY BACK TO CENTERCAL LITIGATION. 
          UNTIL THAT WAS SOLVED, WE WEREN'T ABLE TO DO LONG TERM LEASES BECAUSE POTENTIALLY IF THE
CASE DIDN'T WORK OUT THE WAY IT DID, HAD A HAPPY ENDING FOR THE CITY. BUT IF IT DIDN'T END UP THAT WAY,
THEN CENTERCAL WOULD HAVE GOTTEN THOSE PROPERTIES BACK. 
          WE DIDN'T WANT TO. CITY DIDN'T WANT TO BE IN A POSITION WHERE THEY WERE DOING LEASES ON
PROPERTY THAT THEY ENDED UP NOT NOT OWNING. 
          SO THE DECISION WAS MADE TO JUST REALLY TAKE CARE OF THOSE TENANTS AND NOT LOSE THEM AND
JUST LET THEM DRIFT INTO MONTH, MONTH TO MONTH. NOW, AS THIS, AS WE GOT MORE COMFORTABLE WITH ULTIMATELY HOW THE CENTERCAL
LITIGATION WAS GOING TO WORK OUT AND WE WERE ABLE TO START DOING LEASES AGAIN, COVID CAME AND IT WAS VERY DIFFICULT FOR A LOT OF OUR TENANTS BECAUSE OF THE
SHUTDOWNS, TO COMMIT TO NEW LONG TERM LEASES WHEN THEY'RE NOT EVEN OPEN. 
          AND SO THEY HUNG IN THERE. AND THE CITY, CITY WORKED VERY HARD TO WORK WITH OUR TENANTS
DOWN THERE THAT COULDN'T PAY THEIR RENT DURING DURING THE SHUTDOWNS. AND SO WHAT THEY DID IS THAT THEY ALLOWED THAT RENT JUST
TO ACCUMULATE. 
          AND THEN ONCE THEY WERE ABLE TO OPEN BACK UP TO WORK IT INTO NEW LEASES OR PAYMENT PLANS. 
          AND I THINK IN EVERY ONE EXCEPT MAYBE ONE EXAMPLE OF A TENANT,
CITY HAS GOTTEN BACK 100 CENTS ON THE DOLLAR. 
          SO I THINK, I THINK THAT GOOD FAITH THAT THE CITY REALLY STRETCHED AND HELPED TENANTS OUT, REALLY PAID OFF IN LOYALTY FROM A LOT OF THEM. 
          SO LONG ANSWER TO YOUR QUESTION ABOUT WHY, WHY ARE SO MANY MONTH TO MONTH? WE'RE GRADUALLY WORKING, GRADUALLY WORKING THROUGH THAT,
BUT WE'RE MAKING GREAT PROGRESS. 
          COMMISSIONER FALK. 
          JUST CURIOUS IF YOU'VE LOOKED AT THE DATA TO SEE IMPACTS OF OTHER LIKE EITHER WEEKLY
EVENTS OR MONTHLY THINGS, LIKE DO WE SEE A SPIKE IN INTERNATIONAL BOARDWALK AND OTHER AREAS WHEN THERE'S LIKE THE
CAR SHOW OR THE FARMER'S MARKET OR SOME BIG, 
          [00:55:02]
YOU KNOW, PRIVATE THING THAT'S GOING ON AT THE SEASIDE LAGOON OR OTHER,
LOBSTERFEST THOSE KINDS OF THINGS. 
          DOES IT DRAW PEOPLE? ABSOLUTELY CAN PULL THAT DOWN. 
          WE CAN PULL DATA FROM AS RECENTLY AS 3 TO 4 DAYS AGO. 
          OKAY. THAT'S ALL IT TAKES FOR THAT, FOR THAT DATA TO BE ABLE TO REGISTER IN THE DATABASE
SO WE CAN DO IT BY THE DAY. 
          SO WE COULD TAKE A LOOK AT A SPECIFIC EVENT AND THAT THE,
THE THE SIZE THAT WE CAN HONE THIS DOWN TO IS 5000FT². AND SO YOU GIVE YOU GIVE US A 5000 SQUARE FOOT PERIMETER. 
          OR MAYBE THE BUSINESS IS ALREADY 5000FT² LIKE BEACHLIFE FESTIVAL,
BEACH LIFE, CALIFORNIA SURF CLUB. 
          WE COULD WE COULD DROP THE, THE THE GEOLOCATION DATA RIGHT ON THEIR FOOTPRINT AND TAKE A
LOOK AT HOW THEY DID ON A PARTICULAR DAY FOR A PARTICULAR EVENT AND COMPARE THAT TO ANY OTHER DAY OR ANY OTHER YEAR
ON THAT PARTICULAR DAY. 
          TO YOUR POINT. COMMISSIONER CHRZAN, I THINK A GOOD ONE MIGHT BE THIS WEEKEND WITH THE IN
AND OUT. I DON'T KNOW IF THEY'RE CALLING IT, BUT IT'S ESSENTIALLY A FUNDRAISER FOR HUMAN TRAFFICKING. 
          IT'S A REALLY BIG EVENT THAT'S TAKING ALL OF SEASIDE LAGOON AND THAT PARKING LOT FOOTPRINT
THAT BEACH LIFE TYPICALLY UTILIZES. 
          I THINK ATTENDANCE ISN'T GOING TO BE QUITE 30,000 PEOPLE,
BUT IT WOULD BE A GOOD, YOU KNOW, BAROMETER TO COMPARE AGAINST BEACH LIFE. YEAH,
YEAH. 
          WE'LL SEE. WE'LL SEE THOSE EXACT NUMBERS. WE'LL SEE WHERE THEY CAME FROM. WE'LL SEE WHAT
THEIR DEMOGRAPHIC IS. 
          I MEAN, JUST ABOUT ANY MACRO DATA YOU WANT TO KNOW ABOUT WHO GOES TO THAT WE'LL BE ABLE TO
PROVIDE. 
          YEAH. AND I'M NOT THINKING WITH TO COMPARE WITH BEACH LIFE,
BUT I JUST WONDER WHAT IT MIGHT TELL US ABOUT EVEN JUST LIKE, MOVEMENT THAT WE'RE TRYING TO DO WITH THE AMENITIES PLAN,
I DON'T KNOW. 
          IT'S A GOOD POINT. YEAH. AND AND SEE HOW IT AFFECTS THE INTERNATIONAL BOARDWALK,
FOR EXAMPLE, OR FISHERMAN'S WHARF FOR EXAMPLE, OR OLD TONY'S. 
          I MEAN, YOU COULD ACTUALLY SEE, HEY, WHEN BEACH LIFE IS GOING ON OR THE IN AND OUT EVENT
THAT'S GOING ON, HOW DID THAT IMPACT OLD TONY'S? SO, I MEAN, ALL OF THAT,
ALL OF THAT OUT THERE. 
          IT GIVES US IDEAS ALL THE TIME. I MEAN, WHEN WE TAKE A LOOK AT THE DATA AND WE'RE DEALING
WITH DIFFERENT PEOPLE AND DIFFERENT DIFFERENT ISSUES THAT WE'RE TRYING TO, TO SOLVE. AND SO WE'RE FINDING NEW WAYS TO USE THIS ALL,
ALL THE TIME. 
          THANKS. OKAY. OKAY. I GOT ANOTHER THING. SO CURRENTLY ALL OF OUR,
THE ALL OF THE EXISTING LEASES HAVE A 3% BUMP PER YEAR, RIGHT? THEY ALL DO. YEAH. AND THE OFFICE LEASES IS REALLY WHERE WE SEE
THE BENEFIT OF THAT. 
          BECAUSE THEY DON'T PAY THE PERCENTAGE RENT, THEY JUST PAY THEIR BASE RENT. 
          AND SO WHILE OVERALL THE MARKET IS SEEING PRETTY FLAT ON RENTAL RATES,
WE'RE SEEING AN AN ACTUAL INCREASE ON THAT, WE'RE ABLE TO IMPLEMENT THAT. I THINK IT WAS BACK PRE-COVID AND WE JUST PUT IT IN PLACE. 
          AND AND IT HAS STUCK. AND RELATIVE TO INFLATION. 
          I GUESS THAT'S ABOUT I'VE SEEN A NUMBER OF LEASES THAT ACTUALLY TRACK INFLATION,
RATE THAT THE BUMP ACTUALLY HAPPENS. 
          THAT IS THE LA COST OF LIVING INDEX. BUT IT'S SOMETHING TO LOOK AT ANYWAY. 
          I DON'T KNOW HOW IT WOULD TRACK, BUT WE STARTED WE STARTED DOING IT ON CPI. 
          BUT THEN THE PUSHBACK THAT WE GOT IS THAT PEOPLE WANTED TO PUT A CAP ON THE CPI,
AND THEN WE WANTED TO PUT A BOTTOM ON IT. 
          IT'S GOING TO BE CPI, BUT NO LESS THAN 2%. OR PEOPLE WOULD SAY,
OKAY, BUT IT'S NO MORE THAN 5%, YOU KNOW. SO THAT WAS ONE ISSUE THAT WE GOT. AND THEN THE OTHER ISSUE IS,
IS JUST CALCULATING IT. 
          AND YOU KNOW, AND YOU KNOW, THE SOUTHERN CALIFORNIA,
YOU KNOW, MSA, METROPOLITAN STATISTICAL AREA, IS THAT REALLY A GOOD MEASURE TO, TO PRICE YOUR OFFICE SPACE ON DOWN ON PIER PLAZA? YOU KNOW, SO IT'S YOU COULD, YOU COULD, YOU COULD TIE IT TO THE COST OF BEEF. 
          OKAY. I MEAN, YOU KNOW, SO SO THERE WAS THERE WAS A LOT OF PUSHBACK AS A WHY PICK THAT
NUMBER AND THEN JUST CALCULATE IT. 
          YOU KNOW, A LOT OF THESE TENANTS ARE SMALL TENANTS,
AND THEY JUST DON'T WANT TO GET INTO THE DETAILS OF CALCULATING THIS. 
          SO TAKE IT FULL CIRCLE. THAT'S WHY WE JUST WENT BACK TO 3% ACROSS THE BOARD. 
          LET'S KEEP IT SIMPLE FOR OUR, FOR OUR CUSTOMERS AND EASY TO PREDICT. 
          AND IT'S PREDICTABLE, WHICH IS A NICE THING. YEAH. 
          WHAT IS LIKE AT PIER PLAZA? WHAT'S THE AVERAGE RENT PER SQUARE FOOT THERE? DOLLAR PER SQUARE FOOT RIGHT NOW? FOR NEW LEASES,
WE'RE GETTING 250 TO 275 PER SQUARE FOOT DEPENDING ON THE LOCATION AND THE VIEW. OKAY. NOW THAT DOES NOT INCLUDE THE TAXES. 
          SO THEY GET SEPARATELY BILLED BY THE COUNTY ON TOP OF THEIR RENT FOR THE TAXES. 
          THAT'S GENERALLY ABOUT AN EXTRA $0.15 A SQUARE FOOT OR SO. 
          SO IF YOU'RE PAYING 275 A SQUARE FOOT TO THE CITY,
ADD ANOTHER $0.15. 
          [01:00:07]
AND THAT'S THAT'S REALLY WHAT IT'S WHAT IT'S COSTING THE TENANT. 
          AND I KNOW THIS IS JUST A WILD NUMBER. WHAT'S THE AVERAGE LA. 
          BECAUSE THAT NUMBER SEEMS LOW TO ME. BUT MAYBE WHAT IS THE AVERAGE. 
          IT IS IT IS LOW BECAUSE WE GIVE HARDLY ANY TENANT IMPROVEMENT DOLLARS. 
          RIGHT. YOU GO TO I MEAN I DID A LEASE NOT THAT LONG AGO UP IN EL SEGUNDO FOR,
FOR ANOTHER CLIENT AND THE BREAK EVEN ON THE CASH FLOW OUR BREAK EVEN WE LIKE TO HAVE BREAK EVEN TO THE CITY WHERE IT'S WHERE IT'S A NET
POSITIVE. 
          WITHIN JUST A FEW MONTHS. THIS WAS OVER TWO YEARS BEFORE THE BREAK EVEN WAS FOR AN
INSTITUTIONAL OWNER UP IN UP IN EL SEGUNDO BECAUSE THEY WERE HAVING TO, YOU KNOW, THE RENTAL RATE WAS WAS MUCH HIGHER. IT WAS LIKE $36 A SQUARE FOOT OR SO,
BUT THEY'RE GIVING $100 PER SQUARE FOOT IN TENANT IMPROVEMENT BECAUSE IT JUST COSTS THAT MUCH. SO YOU RUN THOSE NUMBERS IN AND THEN YOU START PAYING ALL THE OTHER
PROFESSIONALS INVOLVED IN IT, AND YOU HAVE A FIVE YEAR LEASE. SOME OF THESE LANDLORDS ARE NOT SEEING REAL CASH FLOW FOR
TWO AND A HALF YEARS. 
          THAT'S ALL. THEY'LL ALSO GIVE FREE RENT. ALSO IN THE PURPOSE OF FREE RENT IS SO THAT THEY
CAN GET A HIGHER RENTAL RATE, WHICH INCREASES THE VALUE OF THEIR PROPERTY. SO WHEN THEY'RE SELLING IT,
OR THEY MAY HAVE LOAN COVENANTS WITH WHOEVER'S, WITH WHOEVER'S GOT THE DEBT ON THAT PROPERTY,
WHICH DOESN'T ALLOW THEM TO LEASE SPACE FOR LESS THAN A CERTAIN AMOUNT. 
          SO THEY HAVE TO GIVE FREE RENT, OR THEY'VE GOT TO REALLY BUMP UP THE TENANT IMPROVEMENT
DOLLARS TO MAKE THE SPACE MORE PALATABLE. 
          AND A LOT OF THESE TENANTS FOR UNUSED TENANT IMPROVEMENT DOLLARS,
THEY CAN APPLY THAT TOWARDS RENT. 
          SO IT'S LIKE PAYING THEM TO TO MOVE IN. AND HAVE WE EVER DONE THAT INSTEAD OF FOR TENANT
IMPROVEMENT ALLOWED IT FREE RENT. 
          RIGHT. SO THREE MONTHS SIX MONTHS FREE RENT FOR WHEN THEY SIGN THE LEASE. 
          LEASE. WE'VE NEVER DONE THAT MUCH. ON OCCASION. 
          WE WILL GIVE A MONTH OR TWO OR WE MIGHT DO A COUPLE OF HALF MONTHS OR SOMETHING LIKE THIS. 
          YOU KNOW, OUR GOAL HAS ALWAYS BEEN TO GET THE NET CASH FLOW TO THE CITY COMING IN AS SOON
AS POSSIBLE AND REDUCE RISK. 
          SO IF YOU GIVE SOMEBODY TWO MONTHS FREE RENT. 
          OKAY. WELL, IF IF A BLACK SWAN EVENT HAPPENS LIKE COVID AGAIN,
YOU KNOW, DURING THAT TWO MONTHS AND THEY GO OUT OF BUSINESS, YOU'RE JUST YOU'RE JUST OUT. IF YOU SPREAD THAT TWO MONTHS FREE RENT INTO MAYBE A HALF
MONTH ON THE FIRST MONTH, HALF MONTH AT THE SIX MONTH, HALF MONTH AT 13. 
          SO WE TRY TO WE TRY TO REDUCE RISK AND INCREASE CASH FLOW,
YOU KNOW, TO THE CITY AS SOON AS POSSIBLE. 
          RIGHT. AND I JUST BRING THAT UP BECAUSE WHAT WHAT IS THE AVERAGE RENT PER SQUARE FOOT
DOLLARS PER SQUARE FOOT IN SAY, IN OUR OFFICE SPACE, AND, I DON'T KNOW, SOME LOCALIZED AREA HERE THAT COULD BE COMPARED TO
WHAT? LIKE YOU SAID, IT'S CLASS, YOU KNOW, CLASS TWO OR SOMETHING. 
          SO WHAT IS THAT? WHAT DO YOU KNOW ABOUT THAT NUMBER? THAT'S PROBABLY ABOUT THE SAME. IT'S PROBABLY THE SAME,
OR IN SOME CASES LESS THAN THAN THAN WHAT WE'RE QUOTING OR THAN THAN WHAT WE'RE GETTING. 
          OKAY. AND AGAIN, IT'S TOUGH TO COMPARE APPLES TO APPLES BECAUSE OF THE TENANT IMPROVEMENT
DOLLARS BECAUSE OF THE FREE RENT. 
          YOU KNOW, I'M JUST I'M JUST WONDERING BECAUSE,
I MEAN, YOU'RE YOU'RE SIGNING, LIKE, A FIVE YEAR LEASE OR TEN YEAR LEASE OR SOMETHING AT THE TIME. SO THEN, YOU KNOW, IF YOU COULD GET HIGHER RENT WITH A BETTER TENANT
IMPROVEMENT, AND I'M GOING TO WRAP AROUND TO SOMETHING COMPLETELY DIFFERENT AS LONG AS WE'RE GOING
HERE, WHICH IS BALANCE SHEETS. 
          SO WHAT I DON'T GET SO LIKE WHEN THE CITY MAKES MONEY HERE,
WHERE DOES THAT MONEY GO? IT ISN'T A SEPARATE BANK ACCOUNT, RIGHT? IT'S NOT. 
          IT GOES INTO UPLANDS AND TIDELANDS. IT GOES TO UPLANDS AND TIDELANDS. SO THERE'S A WHAT
WE. 
          SO I'D BE INTERESTED INTO THE BALANCE SHEET LIKE EVERY MONTH. 
          WHAT, WHAT YOU KNOW, ARE WE HOW MUCH MONEY WE'RE MAKING BASICALLY ON THIS AND HOW MUCH
WE'RE SAVING AND HOW MUCH MONEY IS AVAILABLE FOR THINGS LIKE TENANT IMPROVEMENT. 
          JUST THAT. I DON'T SEE THOSE NUMBERS BECAUSE I'M NOT ON THE PROPERTY MANAGEMENT SIDE. 
          I MEAN, WE WORK SIDE BY SIDE WITH THEM DOWN THERE,
BUT WE DON'T GET INVOLVED WITH WHERE THE RENT ACTUALLY GOES. 
          BUT I CAN TELL YOU THE REPAIRS ARE EXTENSIVE DOWN THERE AS THE HARBOR DEPARTMENT KNOWS. 
          AND, YOU KNOW, I MEAN, IDEALLY, SINCE THE CITY'S GOING TO OWN THIS PROPERTY FOR SOME TIME. 
          IDEALLY, YOU'D BE ABLE TO PULL OUT A COUPLE OF MILLION DOLLARS AND REDO ALL OF THE ROOFS
INSTEAD OF PATCHING THEM AS NEEDED, LIKE WE'RE DOING RIGHT NOW. BUT THAT'S THAT'S A PERFECT SCENARIO. 
          ON IT. SO WHAT THE PROPERTY MANAGEMENT DOES IS,
IS THEY DO THE OVERALL REPAIRS LIKE, LIKE PAINTING AND, AND AND PATCHING THE LEAKS AND THINGS LIKE THAT,
REPAIRING AIR CONDITIONERS WHEN THEY NEED TO DO IT. 
          SO I DON'T KNOW HOW MUCH OF A CAPITAL IMPROVEMENT FUND THAT THEY'VE GOT. 
          [01:05:04]
I KNOW THEY'VE GOT RESERVES SET ASIDE FOR REAL EMERGENCIES,
BUT I KNOW THIS LAST RAINSTORM THAT WE HAD, IT WAS IT WAS DREADFUL. I MEAN, I HAD A BIG LEAK JUST IN,
IN MY OFFICE. 
          THE BUILDINGS ARE OLD. YEAH. I MEAN, THAT'S A REAL KEY THING. 
          IS, ARE WE MAKING. HOW MUCH MONEY ARE WE MAKING ON THAT DOWN THERE? AND HOW MUCH MONEY DO WE HAVE SOCKED AWAY TO BUILD? IT REALLY DEPENDS ON LOCATION. WHEN WE GET OUR REPORTS,
THERE'S THERE'S A REPORT FOR JUST PIER PLAZA. 
          THEN THERE'S A REPORT FOR THE MASTER LEASE HOLDERS,
AND THERE'S ONE FOR FISHERMAN'S WHARF AND JUST ONE FOR INTERNATIONAL BOARDWALK. AND THERE'S THE SEPARATE BUILDINGS THAT WE HAVE ON THE MARINA. SO IT'S REALLY A EVERYTHING
TOGETHER IN ONE SPREADSHEET. 
          SO IT REALLY DIFFERS BY LOCATION AND I THINK IT'S PUBLIC RECORD. 
          I THINK TO ANSWER YOUR QUESTION, IS FISHERMAN'S WHARF,
YOU KNOW, THINK OLD TONY'S OUT THERE. 
          OKAY. NICE CASH FLOW. OKAY. TAKE A LOOK AT INTERNATIONAL BOARDWALK REAL ESTATE. 
          HOME RUN. CITY BOUGHT THAT MASTER LEASE OUT,
I THINK FOR $3 MILLION OR SO. 
          YOU COULD PROBABLY FLIP THAT FOR 15 MILLION RIGHT NOW IF YOU WANTED TO GO INTO THE REAL
ESTATE BUSINESS ON IT. 
          SO NICE CASH FLOW DOWN THERE. PIER PLAZA, IT'S A 40 YEAR OLD WOOD STRUCTURE BUILDING THAT
NEVER SHOULD HAVE USED THE MATERIALS THAT THEY USED TO ORIGINALLY BUILD IT WITH, WITH THE WOOD RIGHT UP THERE ON THE OCEAN WITH,
WITH THE WIND. 
          AND AND IT JUST TAKES A LOT OF REPAIRS. BUT TO YOUR POINT,
IF YOU WANT TO SEE ANYTHING, ANY OF YOU, IN TERMS OF WHAT COMES IN, IT'S ALL PUBLIC RECORD. 
          JUST SEND US AN EMAIL OR GIVE US A CALL AND WE CAN PULL THE RECORDS FOR YOU. 
          THAT THAT'D BE GREAT. AND AND ALSO IF YOU EVER,
IF YOU EVER WANT TO ACTUALLY TAKE A LOOK AT WHAT WE DO ON A DAY TO DAY BASIS. 
          I MEAN, I OFFICE DOWN THERE WITH THE PROPERTY MANAGEMENT PEOPLE,
YOU CAN JUST SWING BY I MEAN, ANYTIME DURING THE DAY, I MEAN, A PHONE CALL WOULD BE GREAT. 
          BUT, YOU KNOW, ANY TIME DURING THE DAY OR IF YOU HAPPEN TO BE DOWN THERE AT SAVOIR FAIRE
OR WHATEVER, YOU ARE WELCOME TO COME IN AND WE'LL SHOW YOU WHAT WE'RE DOING AND HOW WE'RE DOING IT,
AND WALK YOU AROUND THE PROPERTY AND AND ANYTHING YOU WANT, WE WE WILL OPEN IT UP. COUPLE LAST AND WRAP IT UP ON YOUR MONTH TO MONTH TO CONVINCING A
TENANT WHO WAS ON MONTH TO MONTH TO NOW SIGN A LONG TERM LEASE. 
          IS THERE SOME TYPE OF ENTICEMENT GIVEN? YEAH,
IT GIVES THEM YOU KNOW, LOCATION, CERTAINTY. 
          OKAY. AGAIN, AGAINST SOME EVENT THAT'S UNFORESEEN,
THEY KNOW THAT THEY WILL HAVE A LEASE. 
          YOU KNOW, THERE ARE REAL ESTATE, IMPLEMENTATION IS BASED ON POLICY DECISIONS THAT ARE MADE
BY THE CITY. 
          THE POLICY MAKERS CHANGE PERIODICALLY. OTHER THINGS HAPPEN THAT MAY CHANGE THEIR IDEAS
ABOUT THEIR OWN POLICIES ON IT. 
          SO IT GIVES THEM, YOU KNOW, LOCATION, CERTAINTY IF THEY'VE GOT A LEASE IN PLACE. 
          YEAH. NO, IN FACT, FROM MY WAY OF THINKING, TYPICALLY LONG TERM LEASES FAVORS THE TENANT
IN A WAY, RIGHT, BECAUSE THESE ARE OFTEN SMALL BUSINESSES. 
          AND IF THEY GO OUT OF BUSINESS, YOU'RE NOT GOING TO BE ABLE TO. I MEAN,
YOU MIGHT BE ABLE TO COME AFTER THEM FOR A LITTLE BIT OF MONEY, BUT NOT A LOT. YOU SEE WHAT I'M SAYING? YEAH. SO THE LEASE, YOU KNOW,
OFTEN THE LEASE BENEFITS THE TENANT MORE THAN THE CITY IN SOME WAYS. 
          IT DEPENDS. IT DEPENDS ON THE LEASE. YEAH, IT REALLY DOES. 
          I MEAN, I'VE SEEN LONG TERM LEASES. TAKE FUN FACTORY,
FOR EXAMPLE. 
          YOU KNOW, THE PREVIOUS OPERATOR DOWN THERE SIGNED THAT LEASE. 
          IT WAS A LONG TERM LEASE AT A TIME. I THINK IT WAS IN THE EARLY 70S OR SOMETHING LIKE THIS
WHEN NOBODY WANTED THAT AND HE WAS PAYING. 
          I MEAN, I DON'T HAVE IT IN FRONT OF ME, A RIDICULOUSLY LOW AMOUNT OF MONEY,
I MEAN, A COUPLE OF THOUSAND DOLLARS A MONTH AND WAS JUST MINTING MONEY OVER THE LAST COUPLE OF DECADES THAT HE WAS DOWN THERE. SO THAT'S AN EXAMPLE. 
          AT THE TIME, CITY FELT THAT WAS A GOOD DEAL. THEY PROBABLY WEREN'T THINKING ABOUT
PERCENTAGE RENTS OR WHOEVER THE POLICYMAKERS WERE. 
          YOU KNOW, 40 YEARS AGO, 50 YEARS AGO, YOU WEREN'T WEREN'T THINKING THAT THROUGH. 
          WHAT WE'RE ALWAYS TRYING TO THINK ABOUT IS WE TALKED ABOUT THIS JUST TODAY IS IF SOMETHING
HAPPENED TO US. 
          OKAY. OR ANY OF THE PEOPLE IN THE HARBOR DEPARTMENT,
COULD SOMEBODY ELSE COME IN AND FIGURE OUT WHAT WE'RE DOING? COULD SOMEBODY COME IN AND JUST TAKE OVER THE FILES? TAKE OVER? YOU KNOW, OUR PROCESSES AND PROCEDURES. 
          SOLID ENOUGH SO THAT EFFECTIVELY WE'RE WE'RE REPLACEABLE. 
          WE ALSO WANT DEALS THAT ARE GOING TO LOOK SMART TEN YEARS FROM NOW. 
          YEAH. NO, I MEAN, BUT THE WHOLE FUN FACTOR IS A PERFECT EXAMPLE OF HOW THE LEASE,
A LONG TERM LEASE, REALLY BENEFITED THE TENANT AND DID VERY LITTLE FOR THE CITY AT THE TIME. 
          I MEAN, YOU SEE IT TYPICALLY, AND I'VE BEEN INVOLVED WITH COMMERCIAL LEASES,
CERTAINLY. 
          AND OFTEN THE TENANT PUSHES WANTS THE LONG TERM LEASE. 
          RIGHT. BECAUSE IT BENEFITS THEM. THEY KNOW WHERE THEY'RE GOING TO BE. IT ESTABLISHES THEIR
YOU KNOW, SO IF YOU IF YOU'VE GOT ESCALATORS BUILT INTO IT,
THOUGH, THERE'S ALSO A CERTAIN AMOUNT OF RISK THAT THE TENANT IS WILLING TO TAKE IF THEY SIGN A LONG TERM LEASE THAT THAT THEY'LL PAY THOSE IF THE LEASE IS STRUCTURED RIGHT FROM A
LANDLORD STANDPOINT AND YOU'VE GOT BUILT IN EITHER CPI INCREASES OR FIXED PERCENTAGES,
CPI IS PROBABLY THE SAFEST FROM A LANDLORD, 
          [01:10:06]
BUT IT'S ALSO THE MOST COMPLEX WAY TO GO ABOUT IT FOR A LARGER PROPERTY. 
          THAT IS WHAT I WOULD DO. NOT FOR A SMALL PROPERTY LIKE LIKE PIER PLAZA,
BUT IF IT'S STRUCTURED CORRECTLY, THE TENANT WILL GIVE UP, WILL TAKE ON SOME RISK OF THAT RENT BEING DISPROPORTIONATELY
HIGHER THAN THE MARKET TEN YEARS FROM NOW OR OR 15 YEARS FROM NOW. SO IF IT'S STRUCTURED RIGHT,
IT'LL BE JUST ENOUGH FOR THE TENANT TO SAY, YEAH, WE'LL TAKE ON THAT EXTRA RISK. BUT THE LANDLORD IS ABLE TO CAPTURE THE VALUE THAT
THAT TENANT BRINGS, EITHER IN CASH FLOW OR, OR FOOT TRAFFIC OR SOMETHING. 
          YEAH. SOMEWHERE DOWN THE ROAD. IT'S RARE NOW DAYS TO SEE SOME OF THESE LEASES THAT WERE
DONE 40 OR 50 YEARS AGO, OR OR EVEN SOME OF THE MASTER LEASEHOLDS AND THINGS LIKE THIS. 
          THESE THINGS ARE MUCH MORE SOPHISTICATED ON THE CITY SIDE ON HOW THEY LOOK AT THESE
THINGS. 
          YEAH. I'M JUST WONDERING WHAT THE CITY GETS OUT OF THESE. 
          YOU KNOW, I KNOW IN SOME WAY THERE'S A PART OF ME THAT SAYS MONTH TO MONTH. 
          IT'S GREAT, YOU KNOW? CONTINUE. WELL, LET ME LET ME TOSS THIS IN. 
          EVERY LEASE WE'VE GOT DOWN THERE, EXCEPT FOR BEACH LIFE,
HAS GOT A 12 MONTH TERMINATION OPTION. 
          YEAH I KNOW. BUILT INTO IT. I KNOW. SO SO SO WHEN PEOPLE. 
          SO I MEAN, YOU'RE IN THE REAL ESTATE BUSINESS. SO. SO YOU KNOW WHEN PEOPLE TALK ABOUT,
WELL, OUR RENTAL RATES COMPARABLE TO SOMEWHERE ELSE. 
          YOU SHOW ME WHERE A TENANT IS GOING TO PAY MARKET RATE. 
          IF THE LANDLORD ALSO HAS THE OPTION TO JUST CANCEL. 
          YOU COULD HAVE A TEN YEAR LEASE, BUT IF THE LANDLORD'S GOT AN OPTION TO CANCEL IT IN 12
MONTHS, YOU SHOW ME A TENANT THAT'LL SAY I'LL PAY MARKET RATE. 
          NO, YOU'VE GOT TO PAY. THEY'RE GOING TO WANT A DISCOUNT OFF. 
          WHEN DOES THAT GO AWAY? NO, NO, THAT'S THAT'S THAT'S HERE FOR THE LONG TERM UNTIL
REDEVELOPMENT OPPORTUNITIES PRESENT THEMSELVES. 
          SO WE'VE GOT AN AGING INFRASTRUCTURE OUT THERE,
AND EVENTUALLY A LOT OF IT NEEDS TO BE REBUILT. 
          SO WE WANT THE MAXIMUM FLEXIBILITY TO BE ABLE TO GET OUR LEASES IF AND WHEN WE NEED TO. 
          YEAH, I GUESS THAT ALL COMES DOWN TO THE BALANCE SHEET. IF IT'S MAKING ENOUGH MONEY RIGHT
NOW TO CONTINUE TO SUPPORT ITSELF, IT'S OKAY. BUT LIKE LIKE BRIAN IS MENTIONING,
IT DOES KILL YOU ON, YOU KNOW, THAT ONE PROVISION. 
          YOU'VE GOT TO GIVE CONCESSIONS AND IT'S LIKE,
NO, IT'S LIKE NO TENANT I CALL IT THAT'S TENANT IMPROVEMENT ALLOWANCE. 
          THAT'S WHAT A LANDLORD FOR THE FOR THE PUBLIC. THAT'S WHAT THE LANDLORD WILL ALLOW A
TENANT TO SPEND TO BUILD THEIR SPACE OUT. 
          AND THE LANDLORD PICKS UP PICKS UP THAT BILL IF YOU DON'T HAVE MUCH INTENDED IMPROVEMENT
DOLLARS TO GIVE A TENANT, YOU'VE GOT TO OFFSET THAT BECAUSE THEY HAVE OTHER CHOICES. 
          YOU'VE GOT TO OFFSET THAT WITH A LOWER RENTAL RATE OR BETTER TERMS OR SOMETHING LIKE THAT. 
          SO IT'S ALL IT'S ALL A BALANCING ACT AND WE'RE ALWAYS TRYING,
AS I SAID BEFORE, WE'RE ALWAYS TRYING TO LOOK AT THESE DEALS FROM FIVE YEARS FROM NOW, TURN IT AROUND AND LOOK AT WHAT WE'RE DOING TODAY. 
          IS THAT A GOOD DEAL? WE WANT PEOPLE DOWN THE ROAD AFTER WE'RE ALL GONE OR,
YOU KNOW, GREG'S RETIRED AND CATHERINE, CITY MANAGER SOMEWHERE OR SOMETHING DEPARTMENT AND FROM A LEASING STANDPOINT. WE WANT THEM TO LOOK AT THIS AND GO,
WOW, THAT WAS REALLY THOUGHT THROUGH. 
          THAT WAS SMART. YEAH, I'M ALWAYS THINKING ABOUT IT. AND I WOULD ALWAYS THINK THAT SOMEHOW
FIGURING OUT A WAY TO GIVE HIGHER TI SO THAT YOU COULD GET HIGHER RENTS, TYPICALLY THAT'S GOING TO BENEFIT THE LANDLORD. YOU KNOW,
THE CITY IN THIS CASE. 
          LAST QUESTION. TAKE ALSO YOUR INCREASE. THE MORE DOLLARS OUT OF YOUR POCKET. 
          AS YOU KNOW FROM A LANDLORD TO A TENANT, YOU'RE PICKING UP A LITTLE BIT OF RISK AND THAT
IT TAKES LONGER BEFORE YOU HIT THAT NET POSITIVE FROM FROM DOING THE DEAL. SO WE WANT WE WANT LOW RISK. 
          WE WANT FLEXIBILITY WITH THESE TERMINATION OPTIONS. 
          WE WANT HAPPY GROWING TENANTS. AND AND IT'S ALL A BALANCING ACT THAT THAT I MEAN OTHER
PEOPLE CAN MAKE THIS DETERMINATION OR NOT. BUT I THINK IT'S WORKING PRETTY WELL. OKAY. SO AND SORRY FOR TALKING
FOR SO LONG. 
          LAST SIMPLE SILLY QUESTION. YOU SHOW MORE VACANT VACANCIES DOING JUST WONDERFUL. 
          I THOUGHT MALLS WERE HURTING. IN FACT, THE GALLERY. 
          THEY WERE, THEY WERE A DISASTER. THEY'RE CONVERTING. 
          THEY'RE CONVERTING THEM. A GOOD A GOOD EXAMPLE IS THE,
IS THE [INAUDIBLE] PROMENADE. 
          I DON'T KNOW IF ANY OF YOU ARE FAMILIAR WITH THAT. 
          YOU GO UP THERE. IT'S ALL DOCTOR'S OFFICES. IT'S ALL LAB OFFICES. 
          IT'S PHYSICAL THERAPY OFFICES. IT'S IT'S IT'S NOT THE TYPICAL RETAIL MALL IS IS PRETTY
DEAD AND DYING. 
          AS YOU KNOW, A LOT OF THESE BIG RETAIL CENTERS ARE BEING CONVERTED TO OTHER USES IN
HOUSING. 
          AND BUT TO ME, THAT'S THE DEATH OF THE MALL,
THEN. 
          I MEAN, THE VACANCY GREW SO HIGH IN THE MALL,
IT FELL OVER DEAD. 
          [01:15:03]
RIGHT. AND THEN THEY CONVERTED IT TO SOMETHING ELSE. AND IT'S NO LONGER A RETAIL MALL. I
MEAN, IT'S JUST MY WAY OF LOOKING AT IT, I THINK. I THINK THEY CALL IT A MALL JUST BECAUSE OF THE PHYSICAL STRUCTURE. IT'S A MALL, BUT A LOT OF THESE ARE TURNING INTO HOUSING AND
PROFESSIONAL BUILDINGS. 
          RIGHT? OKAY. I'VE BEEN UP IN PALOS VERDES. I MEAN,
PEOPLE THOUGHT PEOPLE THAT OWN THE PROFESSIONAL BUILDINGS THOUGHT THAT THEY WOULD HAVE A LOCK ON THE MARKET FOREVER UP THERE WITH, YOU KNOW,
WITH ALL THE DOCTORS AND AN AGING POPULATION AND THINGS LIKE THIS. 
          WELL, THEY WEREN'T THINKING ABOUT THE PROMENADE COMING IN AND SAYING,
HEY, WE'LL WE'LL START CONVERTING THIS TO YOU KNOW, TO PROFESSIONAL USE. YEAH. YEAH, OKAY. THAT'S ALL FOR ME. 
          AND THAT'S INTERESTING THOUGH. POOR GALLERIA. 
          RIGHT. SO JUST LIKE WHAT HAPPENED TO THAT WITH THE DROPPING VACANCY RATES ANYWAY. 
          GO AHEAD. THANKS. YOU MENTIONED 7000FT² AVAILABLE. 
          WHAT'S THAT? WE'VE GOT BUILDING 105. WE'VE GOT 996FT². 
          THAT'S AVAILABLE. WE'VE GOT 1010FT² DIRECTLY NEXT TO WHERE WE ARE,
THE MANAGEMENT LEASING OFFICE AND BUILDING 107. 
          THEN WE'VE GOT WE'VE GOT THE FIRST FLOOR, 785FT² AND BUILDING 115,
BUILDING 115, IT'S A LITTLE TWO STORY BUILDING. OKAY. THAT'S GOING TO BE WHAT'S COMING TO COUNCIL NEXT MONTH. 
          WE'VE GOT AN INSURANCE AGENCY THAT'S MOVING INTO THAT. THEN WE'VE GOT 2000FT² THAT USED TO
BE PART OF JARRETT TECHNOLOGY. THEY SHRANK A BIT. 
          THAT'S AVAILABLE. AND AM I MISSING ONE? OH, AND THEN WE'VE GOT 1300 SQUARE FEET IN
BUILDING 121 THAT ACTUALLY FACES THE WATER. USED TO BE AN ARCHITECTURE FIRM THAT WAS IN THERE. 
          OKAY. IN THE GREATER ARBOR AREA, HOW ARE WE DOING? MAISON RITZ? I KNOW SOME OF THIS IS UNDER MASTER LEASE HOLDERS. 
          MAISON RITZ, HOT DOG ON A STICK. THE DOWNSTAIRS NIGHTCLUB? SURE. DOWNSTAIRS NIGHTCLUB IS FULL. IT'S GOT A NIGHTCLUB USE IN THERE. 
          THAT WAS THE LAST REMAINING VACANCY IN THE ROBERT RESNICK BUILDING,
WHICH IS THAT LANDING BUILDING THAT WAS RECENTLY RENOVATED. 
          THE H.K. PACIFIC LEASEHOLD, WHICH IS THE OLD MAISON RITZ TWO STORY BUILDING. 
          AND THEN THAT SINGLE STORY STRUCTURE WITH LIKE THE COFFEE SHOP. 
          THE COFFEE SHOP PORTION IS NEARLY FULL, IF NOT FULL. 
          OBVIOUSLY, MAISON RITZ JUST HAS LIKE A LAW FIRM ON THE SECOND STORY. 
          WE'RE TAKING A POTENTIAL LEASEHOLD TO COUNCIL IN CLOSED SESSION TOMORROW NIGHT. 
          OBVIOUSLY INTERNATIONAL BOARDWALK IS FULL UP,
WITH THE EXCEPTION OF FUN FACTORY, WHICH WE HAVE AN RFP OUT FOR NOW. 
          JOE'S CRAB SHACK IS EMPTY, BUT WE HAVE. FUN FACTORY AND THE FUN FACTORY RESTAURANT,
THAT'S STILL CLOSED, RIGHT? YES. THE FISH RESTAURANT THAT WAS INSIDE FUN FACTORY. 
          OH, YEAH. YEAH, THAT WAS PART OF THE LEASE BUYOUT THE CITY DID. 
          YEAH, YEAH. SO WE'RE ACTIVELY LOOKING FOR SOMEBODY FOR THAT ONE. 
          YEAH. SO THAT'S THAT'S OPEN AND AVAILABLE. WOULD THAT BE AVAILABLE NOW? NOT NOW BECAUSE OF THE CONSTRUCTION. I WASN'T SURE IF THAT HIT THE RESTAURANT TOO OR JUST. 
          YEAH, YEAH. ON GOING BACK TO YOUR STUFF. THANKS FOR COMING AGAIN. 
          THE PLACERAI STUFF IS IS INTERESTING. WHEN YOU LOOK AT THAT. 
          CAN YOU TELL WHAT'S WORKING DOWN THERE IN THE WINTER TIME OR ON A RAINY DAY? WHAT WHAT BRINGS PEOPLE DOWN? WE CAN, WE CAN JUST GOT TO YOU GOT TO DEFINE WHAT YOU'RE
REALLY LOOKING FOR AND THEN START DRILLING INTO IT. PLACER IS GREAT AND IT'S VERY SOPHISTICATED SOFTWARE. 
          PLACER IS GREAT AND THAT THEY'LL PROVIDE SOMEONE TO HELP YOU STRUCTURE A REPORT,
AND THEY'LL DO IT AT NO CHARGE IF YOU'RE BUYING THE SOFTWARE. YEAH, I'M NOT EVEN SURE HOW TO ASK THAT QUESTION. 
          SO I WAS JUST WONDERING IF BETWEEN PLACERAI AND YOUR OWN INTUITION,
I'M KIND OF WONDERING, LIKE, YOU KNOW, WHAT SHOULD WE BE LOOKING FOR FOR TENANTS TO GET MORE TRAFFIC DOWN THERE IN THE MIDDLE OF JANUARY? THEY CAN THEY CAN DO AVOID WHAT THEY CALL VOID ANALYSIS,
WHERE THEY CAN TAKE A LOOK AT CHAIN RETAIL STORES, FOR EXAMPLE, AND WHERE THEY'RE ALL CURRENTLY LOCATED RIGHT NOW,
AND AND WHERE THERE'S A VOID WHERE THERE MIGHT BE AN OPPORTUNITY FOR THEM. 
          IT'S LIKE, YOU KNOW, THINK MCDONALD'S OR SOMETHING LIKE THIS. YEAH WE'RE NOT DOING THAT
ONE. MCDONALD'S KNOWS TO A T, YOU KNOW, WHERE THEY NEED TO PLACE, YOU KNOW, EACH NEW POTENTIAL RESTAURANT. SO YES, IT'S GOT THAT CAPABILITY. 
          WE'VE GOT THE LICENSE FOR ALL OF CALIFORNIA. SO WE CAN TAKE A LOOK AT AT OTHER COMPETING
AREAS. 
          [01:20:04]
WE CAN TAKE A LOOK AT HERMOSA BEACH, MANHATTAN BEACH. I TOOK A LOOK AT SANTA MONICA,
FOR EXAMPLE, A FEW MONTHS AGO JUST TO COMPARE THEIR NUMBER OF VISITORS,
YOU KNOW, TO WHAT WE GET DOWN HERE. 
          SO THERE'S A LOT OF THINGS WE CAN DO WITH THAT DATA. 
          IT'S A THE ANALYSIS I USE IS, YOU KNOW, TAKE A SOFTWARE PACKAGE,
TAKE EXCEL. 
          OKAY. WHAT PERCENTAGE OF EXCEL'S CAPABILITIES DO MOST OF US USE? A FRACTION OF IT? WELL, THINK OF PLACER LIKE THAT. 
          IT'S GOT HUGE CAPABILITIES. PART OF PART OF IT IS JUST IS JUST IS JUST REALIZING WHAT IT
CAN DO. AND THEN AND THEN AND THEN HAVING IT DO IT. 
          SO IT'S AN ONGOING PROCESS AS WE LEARN AND AS WE ARE ACTUALLY USING IT. 
          BUT TO ANSWER YOUR QUESTION. YEAH. QUESTIONS LIKE THAT CAN BE CAN BE ANSWERED. 
          SO WHEN YOU'RE LOOKING AT, YOU KNOW, A LARGE ENOUGH SPACE,
FORMER FUN FACTORY IS AN EXAMPLE, LIKE A VOID ANALYSIS. YOU KNOW, IT'S SOMETHING THAT YOU CAN USE TO TARGET OTHER POTENTIAL
USERS THAT ARE SUCCESSFUL IN OTHER AREAS WHERE THE DEMOGRAPHIC THAT WE'VE GOT IS, IS SIMILAR TO WHAT THEY'RE LOOKING FOR,
SO THAT THEY CAN MAKE A DETERMINATION THAT THEY CAN MAKE THAT, YOU KNOW, WE'D LIKE TO SEE $1,000 A SQUARE FOOT IN SALES OR MORE. 
          AND I CAN ADD TO THAT A LITTLE BIT IN THAT SOMETIMES THE BUILT ENVIRONMENT DICTATES THE
USE. 
          LIKE THE MAISON RITZ SITE LENDS ITSELF TO A RESTAURANT BECAUSE IT'S COMPLETELY OUTFITTED
WITH A KITCHEN AND THE RESTROOMS AND ALL THE HEALTH AND SAFETY REQUIREMENTS THAT L.A. 
          COUNTY REQUIRES OF YOU. I VIEW THE FUN FACTORY SPACE AS THE CLEAR,
BLANK SLATE OF ANYTHING CAN GO IN THERE. 
          AND I THINK, YOU KNOW, THROUGH THIS RFP PROCESS WHERE WE'RE TRYING TO ATTRACT SOMEBODY,
THESE DEVELOPERS, THESE BUSINESS OWNERS, THEY'RE DOING THAT VOID ANALYSIS BEFORE THEY EVEN APPROACH. 
          LARRY KOSMONT, TO SUBMIT SOMETHING. THEY'RE LOOKING AT WHAT WE WANT,
WHICH IS FAMILY FRIENDLY, YOU KNOW, ENTERTAINMENT VENUE. AND THERE, YOU KNOW,
WE KEPT THAT VAGUE ON PURPOSE SO THAT THEY COULD ACTUALLY GO OUT. 
          AND WHAT DOES THAT MEAN TO THEM SO THEY CAN PROPOSE IT TO US. 
          SO I'M EXPECTING THOSE VOID ANALYSIS, AT LEAST FOR THE FUN FACTORY SITE,
TO BE KIND OF GOING THROUGH THIS PROCESS. 
          THANKS. MY LAST QUESTION IS PROBABLY FOR YOU. 
          I WAS I WAS DIGGING AROUND AT BUDGET STUFF ONLINE,
YOU KNOW, AHEAD OF THIS, I WAS BASICALLY TRYING TO FIGURE OUT IF WE'RE DOING BETTER THIS WINTER THAN WE WERE LAST WINTER WITH, YOU KNOW,
SURF CLUB, CANTINA, A COUPLE NEW THINGS, A LITTLE MORE FOOT TRAFFIC, YOU KNOW, A LITTLE BETTER LOOK AND FEEL. WHAT I COULD FIND WERE BASICALLY PDFS OF THE
BUDGET. 
          THERE USED TO BE A BUDGET TOOL, AN INTERACTIVE BUDGET TOOL THAT I DON'T THINK IS ON THE
WEBSITE ANYMORE. 
          I CAN'T SPEAK TO THE BUDGET TOOL. I CAN LOOK INTO IT FOR YOU. 
          BUT, YOU KNOW, WHEN YOU COME TO THE BUDGET, YOU'RE LOOKING AT LIKE THE FINAL LINE ITEM,
IT WAS PRETTY TOP LEVEL. 
          WHEREAS, YOU KNOW, WITH MIO AND DAVE AND KATHRYN AND I TRACK,
WE GET KIND OF QUARTERLY REPORTS FROM ALL OF OUR MASTER LEASE HOLDERS THAT KIND OF BREAK DOWN ALL THE DIFFERENT BUSINESSES, AND. THAT'S WHAT I WAS LOOKING FOR. HOW THEY'RE DOING,
WHICH ONES QUALIFY FOR PERCENTAGE RENT, WHICH ONES ARE PAYING MINIMUM RENT FOR ANY GIVEN MONTH? OF COURSE, WE'VE GOT THE ONES THAT WE MANAGE ON FISHERMAN'S WHARF AND THE BOARDWALK. 
          THEY REPORT DIRECTLY TO US THROUGH CONCORD PROPERTY MANAGEMENT. 
          SO IT'S ALL INFORMATION WE HAVE. SO IF THERE'S ANYTHING YOU WANT TO SEE TO TOM'S POINT,
WE CAN GET IT. 
          I WAS ULTIMATELY TRYING TO LOOK AT TIDELANDS AND UPLANDS AND ARE THEY DOING BETTER THIS
YEAR THAN THEY WERE LAST YEAR? AND EVEN THAT WAS I MEAN, DO YOU JUST KNOW OFF THE TOP OF YOUR HEAD? I DON'T, BUT I THINK IT'S ABOUT THE SAME, TO BE HONEST WITH YOU. 
          OKAY. IF I HAD TO GUESS. BUT AS AS IT'S TRENDING. 
          BUT IF YOU WANT TO, LIKE, DIG INTO THE NUMBERS,
IT'S ACTUALLY NOT THAT COMPLEX. I'LL TALK TO YOU LATER. THANKS. OKAY. 
          THANKS. NOTHING ELSE. THANK YOU. THANKS FOR COMING,
ROGER. 
          OKAY. I'M SORRY. I'M SORRY. BY THE WAY, ON MASTER LEASEHOLDS,
I'M NOT READ ONE. 
          AND MAYBE I SHOULD. SHOULD. BUT YOU SHOULD, I SHOULD,
YEAH, I SHOULD GO BACK AND LOOK AT THEM JUST TO SEE IT. 
          WILL, DOES THE CITY CARE IF THEY HAVE VACANCIES? DEPENDING ON HOW IT'S STRUCTURED, I GUESS WE DO. 
          WE DO BECAUSE WE GET A PERCENTAGE RENT OF THAT. 
          SO THEY DO WELL. WE DO WELL. OKAY. AND THERE'S ALSO A FLAW BASICALLY THAT THEY PAY EVERY
OKAY. 
          I BASICALLY GOT IT. BUT I'LL TAKE A LOOK. AND IT IMPACTS THE OTHER TENANTS AROUND IT ALSO. 
          SO YOU GET A BIG VACANCY FOR EXAMPLE YOU'RE GOING BACK TO FORMER FUND FACTORY. 
          AS SOON AS WE GET THE RIGHT PERSON IN THERE,
IT IS GOING TO BENEFIT EVERYBODY. 
          IT'S SO BIG, AND IF THEY'RE MAKING MONEY, IF THEY MAKE THE DETERMINATION,
THEY CAN MAKE MONEY, ONCE THEY GET UP AND GOING, IT IS GOING TO BENEFIT ALL THE TENANTS DOWN THERE,
WHICH IS GOING TO REALLY INCREASE WHAT THE CITY GETS FROM ALL THE OTHER TENANTS VIS A VIS THE PERCENTAGE RENT. SO WE'RE GOING TO GET NOT JUST THE FUND FACTORY UPTICK FROM
AN ECONOMIC STANDPOINT. 
          [01:25:04]
WE'RE GOING TO SEE ALL THE REST OF OUR TENANTS HAVE THEIR BOATS RISE ALSO. 
          THAT'S RIGHT. AND TO YOUR POINT, A VACANCY THAT,
YOU KNOW, A NUMBER OF VACANCIES FROM A MASTER LEASE HOLD COST US IN OTHER WAYS. 
          RIGHT. BUT I GET IT. THANK YOU. IT'S ALL VERY DYNAMIC. 
          I MEAN, WHAT I LIKE TO TELL PEOPLE WITH ALL THESE NUMBERS AND THINGS LIKE THIS,
I MEAN, NOBODY CAN PREDICT THE FUTURE. 
          I MEAN, THESE ARE THESE ARE REALLY A LOOK IN THE PAST AND A PREDICTION OF THE FUTURE BASED
ON OUR BEST ANALYSIS. 
          IT COULD ALL CHANGE. I MEAN, WE DON'T KNOW WHAT'S GOING TO HAPPEN ECONOMICALLY ON A
NATIONAL LEVEL OR POLITICALLY OR. 
          I MEAN, WE JUST DON'T WE JUST DON'T KNOW. BUT THIS IS THE THIS IS OUR BEST GUESS AT WHAT
WE'RE LOOKING AT GOING FORWARD, AND ALSO WHERE WE STAND RIGHT NOW WITH, WITH ALL OF OUR TENANTS AND,
AND THE RENT AND, YOU KNOW, SOME OF MY OWN THOUGHTS ABOUT WHERE WE WANT TO GO WITH RENTAL RATES FOR OUR RETAIL TENANTS
IN, IN REGARDS TO THAT BASE RENT. YOU KNOW, WE WANT TO WEAN. 
          WE WE WOULD LIKE TO HAVE OUR EXISTING TENANTS ALL PAYING PERCENTAGE RENT AND THOSE ONES
THAT ULTIMATELY FALL BY THE WAYSIDE THAT ARE JUST PAYING BASE RENT. 
          WE WANT TO REPLACE THOSE WITH GUARANTEED PERCENTAGE RENT TENANTS. 
          OKAY, BUT IT SEEMS LIKE OFFICE PEOPLE, YOU KNOW,
OFFICE TENANTS WOULD HAVE A HARD TIME WITH THAT. 
          MAYBE. BUT I DON'T KNOW. YOU KNOW, WE'LL HAVE TO TALK. 
          WELL, YEAH. AND HAPPY TO. YEAH. OFFICE. OFFICE LEASES ARE JUST DIFFERENT. 
          I MEAN, THAT'S JUST IT'S A IT'S A WHOLE DIFFERENT DYNAMIC. 
          YEAH. OKAY. THANK YOU SO MUCH. ANYBODY FROM THE PUBLIC? IS ANYBODY ONLINE? THERE IS NO ONE IN ZOOM. NO ECOMMENTS. 
          BUT WE DO HAVE A COMMENT CARD FROM MARIA [INAUDIBLE]. 
          THANK YOU BRIAN. WELL GOOD EVENING EVERYONE. THANK YOU. 
          I BELIEVE YOU HAVE ABOUT $94 MILLION TOTAL CAPITAL IMPROVEMENT FUNDING ALL THROUGHOUT. 
          SO LOOK INTO THAT. SO LET ME GET BACK INTO. WHAT'S IMPORTANT TO ME? FOR ALL OF US. NOT JUST ME. EXCUSE ME. HOUSING. 
          THE OWNER. LET ME GET BACK TO. LET'S SEE. OH,
SORRY. 
          OKAY. NOPE. BASICALLY, DEVELOPMENT IS COMING. 
          WE HAVE LARGE DEVELOPMENT PROJECTS, INCLUDING UP TO 2700 RENTAL UNITS. 
          THEY'RE NOT THEY'RE NO LONGER HYPOTHETICAL. WHAT MATTERS NOW IS HOW THIS GROWTH AFFECTS
KING HARBOR, OUR INFRASTRUCTURE AND THE LONG TERM STABILITY OF OUR CITY'S GENERATIONAL WEALTH. 
          HISTORICALLY, REDONDO BEACH HAS BEEN STRONGEST WHEN RESIDENTS ARE ALSO TITLE HOLDERS. 
          PROPERTY OWNERS OWNERSHIP CREATES STABILITY DURING TIMES OF CHANGE. 
          TITLE HOLDERS INVEST LONG TERM. PARTICIPATE CIVICALLY AND PAY PROPERTY TAXES AND DIRECT SUPPORT INFRASTRUCTURE. PUBLIC SAFETY AND HARBOR MAINTENANCE. 
          THEY HAVE A VESTED INTEREST IN PROTECTING KING HARBOR AS A WORKING HARBOR AND PUBLIC
ASSET. 
          NOT JUST REAL ESTATE. AS DEVELOPMENT ACCELERATES,
A RENTER DOMINANT MODEL CREATES STRUCTURAL RISK, ESPECIALLY AT THIS SCALE, HIGH TURNOVER REDUCES LONG TERM STEWARDSHIP. 
          AT THE VERY MOMENT WE NEED IT MOST, INFRASTRUCTURE USE,
INFRASTRUCTURE USE INCREASE, BUT REINVESTMENT OFTEN DOES NOT KEEP PACE. THE FINANCIAL UPSIDE FLOWS TO ASSET MANAGERS WHILE THE CITY ABSORBS THE OPERATIONAL BURDEN. 
          BASICALLY, DO WE WANT TO MAKE $2 MILLION A YEAR OR I MEAN TWO,
DO WE WANT TO LOSE $2 MILLION A YEAR, OR DO WE WANT TO MAKE $15 MILLION A YEAR? 
          [01:30:02]
THAT'S A, AND THIS IS LONG TERM TIME FOR THE. 
          MOTION TO EXTEND FOR ONE MINUTE. SECOND. NO,
YOU HAD A MOTION TO EXTEND. 
          YOU CAN EXTEND FOR ONE MORE MINUTE. YEAH, I'LL SECOND THAT. 
          THANK YOU FOR THE HARBOR COMMISSION. THIS MATTERS. 
          INCREASED RESIDENTIAL DENSITY AFFECTS HARBOR ACCESS ACCESS,
PARKING, SAFETY SERVICES AND ECONOMIC HEALTH OF WATERFRONT TENANTS. THESE ARE NOT ABSTRACT IMPACTS. 
          THEY FALL SQUARELY WITHIN THIS COMMISSION'S RESPONSIBILITY TO PROTECT THE HARBOR'S LONG
TERM FUNCTION AND PUBLIC BENEFITS. SO PLEASE KEEP YOUR COASTAL LAND. 
          THANK YOU. OH, I HAVE A COUPLE QUESTIONS FOR YOU BEFORE YOU HOP DOWN. 
          SO I WASN'T AND MAYBE I'M MISSING. IS THERE A DEVELOPMENT THAT'S BEEN APPROVED? THAT'S FOR. NO, NOT THAT I'M AWARE OF. WE DON'T HAVE WE DON'T CURRENTLY HAVE ANYTHING
COMING UP WHERE WE'RE BUILDING OR APARTMENT BUILDINGS OR ANYTHING LIKE THAT WITHIN THE HARBOR. THE HARBOR IS COMPLETELY OPEN SPACE,
RECREATIONAL OR COMMERCIAL OR COMMERCIAL. 
          RIGHT? YOU ARE ADJACENT TO IT. OH, YES. IT'S IN YOUR BORDER. 
          SO YOU'RE TALKING ABOUT THE SEE? YES. YEAH. SO THE AES. 
          THE AES SITE. THANK YOU. I DIDN'T. SO THAT WILL BRING IN APPROXIMATELY ABOUT. 
          AND JUST A LITTLE LESS THAN 10% OF POPULATION INCREASE. 
          SO THAT'S GOING TO AFFECT NOT ONLY, YOU KNOW,
AMENITIES, ACTIVITIES. 
          AND BY THE WAY MY I'M A REAL ESTATE BY PROFESSION,
BUT MY INTEREST IS IN COMMUNITY DEVELOPMENT IN TERMS OF LIKE, YOU KNOW, I CAN'T EVEN PUT MY MIND ON THIS RENTAL THING. 
          I'VE LIVED, WORKED AND PLAYED IN REDONDO BEACH SINCE I WAS 13 YEARS OLD. 
          YES, I PLAYED AT THAT FUN FACTORY LOST A LOT OF MY ALLOWANCE PLAYING MISS PAC-MAN,
AND I LOVED IT. 
          WE HAD SO MUCH FUN. NOW WHAT'S INTERNATIONAL? IT'S, YOU KNOW, BRANDING. IT'S NOT BRANDING. IT IS. 
          WE ARE. WE HAVE A FULL HISTORY HERE. MAY I HAVE EVERYONE'S ATTENTION TO THAT SEAL BEHIND
YOU? THAT'S A GOVERNMENTAL SEAL THAT THAT'S THAT GIVES US GOVERNANCE. 
          AND SO WE NEED TO KEEP OURSELVES. GREG, DO WE HAVE AN UPDATE TOGETHER? WHAT IS GOING ON? THANK YOU. THANK YOU SO MUCH. 
          WHAT IS GOING ON WITH THE [INAUDIBLE] IT'S STILL IN FLUX. 
          IT'S STILL LOCKED UP IN LITIGATION. I MEAN, THERE'S,
YOU KNOW, THERE'S PEOPLE THAT WOULD LIKE TO TURN IT INTO A PARK, RIGHT? I MEAN, RIGHT NOW AND. YEAH. I'M SORRY. I'M SORRY YOU'VE HAD YOUR TIME. 
          THANK YOU, THANK YOU. ANYWAY, SO I DON'T KNOW IF YOU HAVE ANY MORE INFORMATION ON IT RIGHT
NOW. 
          I KNOW THAT IT'S I KNOW THAT MAYBE WE STAY ON TOPIC FOR NOW. 
          AND THEN DURING THE DIRECTOR'S REPORT, WE CAN KIND OF COME UP WITH QUESTIONS. THANK YOU SO
MUCH. YEAH. MOTION TO RECEIVE AND FILE THE I'LL SECOND THAT. 
          ALL IN FAVOR? AYE. OPPOSE. ALL RIGHT. THANK YOU. 
          THANK YOU AGAIN, BRIAN. IT'S VERY INFORMATIVE. 
          THANK YOU. OKAY. ITEM M. LIAISON REPORT. YES. 
          [M. ITEMS FROM STAFF]
I'LL GIVE A FEW UPDATES ON SOME OF THE OTHER PROJECTS THE DEPARTMENT IS WORKING ON. 
          WE ARE PLANNING THE RIBBON CUTTING CEREMONY FOR THE SEA BASS GRILL PENS FOR THE LAST WEEK
OF JANUARY. 
          JUST TRIPLE CHECKING A FEW CALENDARS. WE ARE WORKING ON A BUNCH OF GRANTS RIGHT NOW,
SO WE HAVE OUR $1.4 MILLION GRANT FROM HUD TO FUND THE BASIN THREE SLIPS. SO WE'RE WORKING ON GETTING THAT RFP OUT FOR A CONTRACTOR AND ALSO THE
ENVIRONMENTAL REVIEW DOCUMENTS THAT WILL NEED TO HAVE COMPLETED BEFORE WE CAN KIND OF START ANY PROJECT DOWN THERE. WE DID RELEASE THE RFP FOR THE LCP AMENDMENT,
WHICH IS FUNDED BY A COASTAL COMMISSION GRANT THAT WAS RELEASED IN MID DECEMBER, AND WE'RE ACCEPTING PROPOSALS THROUGH THE END OF THE MONTH. 
          AND THEN WE ARE ALSO WORKING ON WE WILL RECEIVE THE FULLY EXECUTED SAVE GRANT AGREEMENT
AROUND THE HOLIDAYS. 
          AND WE ALREADY MET WITH THE MARINA MANAGERS IN EARLY JANUARY TO KIND OF KICK OFF THE NEXT
ROUND OF THAT FUNDING. 
          SO WE DO HAVE THE GO AHEAD TO START USING THAT MONEY,
AND THEY ALL KNOW THAT AND THEY'RE ALL EXCITED. 
          SO WE'RE EXCITED ABOUT THAT. THE BOAT LAUNCH,
THE GRANT APPLICATION IS DUE ON FEBRUARY 2ND. 
          SO THE CONSULTANTS ARE HEAD DOWN, HEADS DOWN,
GETTING EVERYTHING READY AND GOING AND WORKING CLOSELY WITH US SO WE CAN ANSWER ANY LAST MINUTE QUESTIONS. WE CAN GET THE APPLICATION SUBMITTED. 
          AND THEN THEIR ENVIRONMENTAL TEAM IS ALSO WORKING ON THE TECHNICAL STUDIES FOR CEQA AT THE
SAME TIME. 
          THE COURTESY DOCK. WE DO FINALLY HAVE THAT SPACE AVAILABLE FOR OUR COURTESY DOCK. 
          [01:35:02]
BUT WE ARE KIND OF DOING SOME PREPARATIONS TO KIND OF GET IT UNDERWAY FOR THE PUBLIC,
UPDATING SOME SIGNAGE, LOOKING AT THE LIGHTING AND THINGS LIKE THAT. SO WE HOPE TO UNVEIL IT IN THE NEXT MONTH OR
TWO. 
          AND THEN THE BREAKWATER REPAIR PROJECT, WE'RE WORKING WITH THE ARMY CORPS AND THEIR
CONTRACTOR TO GET A MEETING SCHEDULED WITH STAKEHOLDERS, SO WE CAN GO THROUGH THE PROJECT SPECIFICS. SO WE'RE LOOKING AT SOME DATES AT THE END OF
JANUARY OR EARLY FEBRUARY, AND THEN LOOKING AHEAD TO NEXT MONTH, WE WILL HAVE OUR PUBLIC SAFETY OFFICERS COMING TO
PROVIDE A BRIEF REPORT TO YOU ALL, AND THAT WILL BE ON FEBRUARY 9TH. I'LL START DOWN THERE. 
          ROGER, DO YOU HAVE ANYTHING? YEAH. FOLLOW UP ON THE BREAKWALL REPAIR. 
          LAST MONTH, WE WERE SAYING REPAIRS COULD BE MARCH TO JUNE,
AS EARLY AS FEBRUARY, IF WE'RE. 
          IF WEATHER ALLOWS. SO IS IT STILL POTENTIALLY HAPPENING FOR SIX MONTHS THIS YEAR OR. 
          YEP. IT'S STILL THE SAME SCHEDULE. THEY'VE JUST BEEN WORKING ON A FEW THINGS ON THEIR END
AND GETTING IT GOING. 
          COOL. I DON'T HAVE ANY OTHER COMMENTS ON THE LIAISON REPORT,
BUT JUST GENERAL COMMENTS. 
          THE WATERFRONT LOOKED GREAT FOR THE BOAT PARADE. GREAT. 
          THANK YOU GUYS SO MUCH FOR ALL THE WORK, ALL THE SUPPORT TO THAT. 
          I DON'T KNOW WHO GOT THE TREES LIT, BUT MAN,
IT LOOKED IT LOOKED GREAT AND I HEARD THERE WAS A BIG CROWD THERE. 
          SO THANK YOU. THANKS. GOOD TO HEAR YOU GUYS ARE DOING GREAT STUFF. 
          WHAT HAPPENS IF YOU SLIP ON THE BOAT LAUNCH AND YOU HAVE FEBRUARY 2ND AS THE DATE? WHAT IF IT, IF IT PASSES. YOU CAN'T. IT'S OKAY. 
          SO IT'S NOT IT'S NOT AN OPTION. HOPEFULLY YOU'VE GOT LIKE A BUFFER BUILT IN THERE
SOMEWHERE. 
          RIGHT. THAT THEY'RE ACTUALLY. YEAH. OUR TARGET DATE IS WELL BEFORE FEBRUARY 2ND. 
          YEAH. THAT'S ALL I HAVE GOT. YEAH. PERFECT. I WAS JUST CURIOUS. 
          THE FUN FACTORY RFP. WHEN IS THAT DEADLINE? WHEN THINGS START COMING IN. 
          IT'S END OF JANUARY. OKAY. SO ESSENTIALLY, WE'LL BE GATHERING ALL THE PROPOSALS THAT WE
GOT. 
          WE'LL BE GOING TO CLOSED SESSION TO TALK ABOUT THE PROS AND CONS OF EACH ONE. 
          WE'RE NOT ELIMINATING ANY. WE'RE GOING TO PRESENT ALL OF THEM TO COUNCIL. SO THEY GET THE
BIG PICTURE OF WHO SUBMITTED. 
          AND HOPEFULLY THEY'LL CHOOSE SOMEONE THAT WE CAN NEGOTIATE WITH. 
          I DON'T KNOW IF YOU'RE ALLOWED AT THE FEBRUARY 9TH MEETING,
WILL YOU BE ABLE TO SHARE LIKE HOW MANY RESPONSES YOU GOT? SURE. YEAH. COOL. NO SPECIFICS, BUT I CAN GIVE A NUMBER. 
          YEAH. YEAH. ALL RIGHT. SO A COUPLE QUESTIONS. 
          FIRST OF ALL, JUST FOLLOWING UP ON THE FUN FACTORY,
MAYBE I MISSED IT. WHEN DO WE EXPECT THAT WE'LL ACTUALLY BE ABLE TO MAKE THE FUN FACTORY AVAILABLE FOR LEASING? I KNOW WE'RE IN THE RFP,
BUT WHEN WILL SOMEBODY ACTUALLY ABLE TO MOVE IN THERE? WELL, I MEAN, I PERSONALLY I THINK THEY'VE GOT ABOUT SIX MONTHS TO NINE MONTHS WORTH OF TENANT
IMPROVEMENTS THAT ARE GOING TO BE NEEDED. 
          AND THOSE ESTIMATES AND WHAT IT WILL COST WILL GO INTO THE NEGOTIATIONS OF THE LEASE
ITSELF. 
          SO THEY'LL HAVE TO DO SOME PROACTIVE KIND OF ESTIMATES TO UNDERSTAND WHAT THEY'RE
TACKLING. AND OF COURSE, WHAT TYPE OF TENANT IMPROVEMENTS ARE DICTATED ON WHAT TYPE OF USE IS GOING IN THERE. 
          SO I WOULD SAY CONSERVATIVELY, YOU KNOW, WE'RE GOING TO GET THE PARKING STRUCTURE PROJECT
COMPLETED IN THE NEXT 3 TO 5 MONTHS. I EXPECT US TO BE LOCKED UP IN NEGOTIATION BY THEN,
AND THEN ANOTHER PROBABLY SIX MONTHS OF BUILDING PERMITS AND THEN ANOTHER 8 TO 9 MONTHS OF CONSTRUCTION. IT'LL BE A LITTLE WHILE,
YOU KNOW, BY THE END OF 2027, WE SHOULD EXPECT SOMEBODY IN THERE AND AND OPERATING HOPEFULLY. YEAH. AND ONE OTHER QUESTION I ASKED ABOUT THIS WELL OVER A YEAR AGO NOW,
AND I'M NOT EXPECTING TO RECEIVE A DIFFERENT ANSWER, BUT I'LL ASK ANYWAY. THE DRAIN PROJECT ON YACHT CLUB WAY THAT'S BEEN SUSPENDED DUE TO THE
BANKRUPTCY OF THE CONTRACTOR. 
          ANY UPDATE ON THAT? NONE. IT'S IN A LITIGATION MATTER AT THIS POINT. 
          THANK YOU. I'M GOOD. BEEN ANSWERED. EXCELLENT. 
          IF THERE'S NO OTHER ONE, GO BACK. ARE WE ON? ARE WE ON? 
          [N. COMMISSION MEMBER ITEMS AND FUTURE COMMISSION AGENDA TOPICS]
N OR M? OKAY, I'LL HOLD IT. OKAY. ALL RIGHT. EXCELLENT. 
          OKAY. NOW WE ARE ON. I HAD ONE THING. WILL YOU BE ABLE TO SHARE NEXT TIME? MAYBE. WHAT? THE PARKING. YOU ALLUDED TO SOME PARKING CONCESSIONS OR ARRANGEMENTS WHILE
THE ARMY CORPS IS OCCUPYING SOME OF THE AREA. A TEMPORARY CONSTRUCTION YARD TYPE THING TO SHARE WHAT THAT IS
NEXT TIME, IF WE HAVE IT. GO AHEAD. YEAH, I THINK THEY'RE STILL KIND OF FINALIZING THE DETAILS ON
THAT. 
          SO WE DON'T ACTUALLY HAVE THAT YET, WHICH IS WHY WE HAVEN'T GONE AHEAD AND SCHEDULE THAT
MEETING WITH THE STAKEHOLDERS YET. 
          [01:40:04]
BUT WE ARE THEY KNOW WE'RE WE'RE WAITING IT. SO WE SHOULD HAVE AN UPDATE I WOULD HOPE NEXT
MONTH. 
          BUT WE KEEP PRESSING THEM FOR THOSE DETAILS. OKAY. 
          THANKS. ANYBODY ELSE. ALL RIGHT. WELL IF THERE IS NO OTHER BUSINESS IS THERE A MOTION TO
ADJOURN. 
          WELL AND THE COMMISSION MEMBER ITEMS. I DON'T KNOW IF THIS IS PART OF THE. 
          I CANNOT MAKE THE FEBRUARY MEETING THOUGH. BUT JUST BUT I'LL LET YOU KNOW BUT OKAY. 
          ANYBODY ELSE. OKAY. NOW MOTION TO ADJOURN. I'LL MAKE A MOTION TO ADJOURN. 
          SECOND. ALL IN FAVOR? AYE. ALL OPPOSED? ALL RIGHT. 
          I DON'T THINK THERE'S ANYBODY TO BE OPPOSED. YOU HAVE A GOOD TIME. 
          I WAS [LAUGHS].
* This transcript was compiled from uncorrected Closed Captioning.