Escrow is expected to close by week's end on city-owned beachfront property just south of Casa del Mar hotel.
The 23,000-square-foot property was sold for $13.15 million earlier this month to Edward Thomas Hospitality Cos., the owners of Casa del Mar and Shutters on the Beach. Proceeds are to be earmarked for the construction of so-called affordable housing projects elsewhere in the city.
The nearly unanimous, 6-1 vote from the Santa Monica City Council was enticed, at least in part, by the promise of a speedy sale. When the state killed off redevelopment agencies in February, Santa Monica lost its primary source of funding for low-income housing.
“We have a number of affordable housing projects in the pipeline that for all intents and purposes are ready to go,” said Mayor Richard Bloom. “They're just waiting for money."
The deal presented to the City Council on Sept. 11 stated escrow would close in five days.
"The buyer has said all along, they are willing, capable of closing in five days," Housing Administrator James Kemper told Patch on Monday. "A good part of it is subject to when the title company and escrow company can pull together the documents."
Councilman Bobby Shriver, whose term is up at the end of the calendar year but who is not seeking reelection, voted to oppose the sale on the contention that a better offer would come in a few years—if and when the real estate market improves.
"As much as I would love to hang on to it and watch it appreciate it even more, what's important to me is getting those affordable units in the pipeline," responded Councilwoman Gleam Davis.
A real estate lecturer at UCLA’s Anderson School of Management, Paul Habibi, said he was certain a better offer would have been made had the council waited, but the “five-day close is certainly appealing.”
“Is that land going to be worth more in a few years? My guess is absolutely,” Habibi said.
City officials have been negotiating a possible land swap and seeking offers on the property since 2007.
The land is currently zoned for housing and is subject to Proposition S, an initiative passed by voters in 1990 to prevent the construction of new hotels and restaurants on the beach.
"We're selling the property, we're not selling any entitlements," said Councilman Kevin McKeown. "We had people who wanted to buy this land conditional on what they wanted to do."
The $13.15 million sale price—called "fairly sizable" by Bloom—was the highest offer received in the latest go-around. The "purchase offer represents the best combination of highest price, no contingency or due diligence period and shortest escrow period," city planners wrote in a report to the council.
In May, the city received an offer of $15.75 million, but it was contingent on a 60-day "due diligence" and a 15-day escrow period.