Former Marina Owners File Lawsuit Against Port

LONG BEACH —  The Port of Long Beach, frustrated since July in efforts to move tenants from a ramshackle marina so it can build a shipping terminal, has been sued for about $5.7 million by the former owners of the marina and the adjoining vacant Ford Motor Co. plant near Terminal Island.

In the increasingly tangled dispute, the former owners filed suit in Los Angeles Superior Court on Oct. 28, claiming that the city-run port used fraud to buy the plant, marina and 24 surrounding acres at a bargain $8-million price in 1986.

In turn, port officials say they expect soon to file their own lawsuit against former owner and marina operator William Melamed of Los Angeles. The port has been unable to begin construction on the site because Melamed did not evict boat owners from the 140-slip Our Marina by June 30 as promised, the officials say.

And, in a related development, the port’s attorney said he plans to go to court late this week to carry out a longstanding threat to evict 53 remaining boat owners, including about 25 who live aboard their vessels.

The boat owners, who also face confiscation of their boats and stiff fines, say they can find no other marina that will accept their unusually large, odd-shaped or dilapidated vessels--especially if the owners intend to live aboard them.

Melamed and John and Joan Gottlieb, who sold the Ford property to the port in March, 1986, claim that harbor officials ignored state law that required payment of nearly $8.7 million for the waterfront parcel, its full appraised value, instead of $8 million.

The former owners seek the $690,000 difference between appraised value and purchase price and $5 million in punitive damages.

Specifically, the former owners claim that they agreed to sell their property for $8 million only because a port negotiator lied in telling Melamed that a port appraisal showed that a higher price would be an illegal “gift of public funds.”

The sellers say they did not find out about the higher appraisal until this year, and they cite a state law enacted to keep disputes about public-agency real estate purchases out of court. The law says that the purchase price should not “be less than the public entity’s approved appraisal of the fair market value of the property,” according to the lawsuit.

Deputy City Atty. Thomas A. Vyse, the port’s counsel, said state law does call for payment of the appraised value if it reflects fair market value.

“In reading the file, it may be that $8 million was the fair market value” because of additional costs to prepare the site for construction and other factors that limit its use as a shipping terminal, he said.

Chemical Firm to Stay

David Hauser, president of the Harbor Commission, said he does not know the details of negotiations, but he added that port use of the property is limited by a Melamed lease to a chemical company that will be allowed to stay on the site for 10 years. The lower price might also have been justified because Melamed insisted on keeping the marina and another nearby business open until this year, Hauser said.

A more detailed response to the lawsuit will be filed this month, they said.

“Our bargaining with Melamed went on for a long time,” Hauser said. “It was not poor Melamed, poor Gottlieb. We did not shove them into a corner and say, ‘You have to take this.’ There were a number of people at the port who felt we were paying beyond the fair market value.”

Vyse said the previous owners were aware of their property’s value because they had been trying to sell it for years. According to the lawsuit, the property was listed with a broker for $8.95 million in December, 1983.

In a separate action that is part of the same lawsuit, Melamed-owned Channel Enterprises Inc. and Diane Markoff, operators of a motion picture company at the Ford site, also seek relocation benefits and reimbursement for other losses purportedly caused by that company’s move.

The port has denied a claim for such benefits, and Vyse said he has seen no evidence that the motion picture company did anything more than use the cavernous, empty Ford assembly plant as a location for filming.

Port officials say the lawsuit is part of a legal dispute that developed July 1 when the port attempted to take possession of the marina only to discover that it was still full of boats. Hauser said Melamed had been given 16 months to notify marina tenants of the closure and clear the site.

Instead, the operator continued to rent slips through June. Melamed’s attorney has said the port verbally agreed to allow the marina to stay open until construction was imminent.

53 Boats Remain

Caught in the debate are the boat owners. Of the original 130 owners, 53 remained at the marina early this week.

Vyse said they have been offered free rent through the end of the year in exchange for their agreement to move by Dec. 31. For the free rent and the port’s waiving of fines that have accumulated at $210 a day since mid-September, boat owners must also agree to maintain the docks in the interim, and not to sue the port in case of accident or to seek relocation benefits, Vyse said.

John Farish, an attorney for the boat owners association, said the offer is a bad deal and he will recommend that the tenants reject it.

Vyse said he had received no response by Tuesday’s deadline and expects to file his first eviction actions late this week. The eviction process is expected to take about a month, the attorneys said.