The Redondo Fun Factory has a lease expiration date and the City of Redondo Beach now has control of their waterfront, clearing the path for a lease agreement with CenterCal Properties and its Waterfront: Redondo Beach revitalization plan.
On a 3 to 2 vote Tuesday night, the Redondo Beach City Council agreed to pay Fun Factory parent company Redondo Fisherman’s Cove Company’s $9 million to buy out the arcade’s lease, which ran through 2027. The lease expiration, and the city’s payout, will occur in three years.
RFCC will receive an additional $1 million payment from CenterCal if its development is built.
“It’s a way to complete the puzzle…we get to move forward and the city has control of the property, no more, no less,” said Mayor Steve Aspel. “It’s the prudent thing to do.”
The Fun Factory lease is that last piece of the leaseholds puzzle. City control over the lease enables CenterCal to proceed with plans for developing both the pier and the waterfront north of the pier.
Fun Factory owner Steve Shoemaker has held the 30,000 sq ft. Fun Factory lease on the bottom level of the Redondo Pier and Southern Parking Structure since 1972.
The city staff notes that without the Fun Factory property, the city would be unable to proceed with waterfront development or replacing the aging parking structure.
A new parking structure, along with major infrastructure upgrades to the rest of the pier area, is among the strongest selling points for CenterCal’s Waterfront.
The agreement also settles outstanding lawsuits between Shoemaker and the City of Redondo Beach. The two entities have long had a contentious legal relations, with its lowest point occurring in 2003. That year, then-City Prosecutor Michael Webb won a conviction against Shoemaker on child pornography charges. In the late 1990s, Shoemaker launched several websites, including a pornographic website that allowed users to upload images without moderation. Redondo police found eight underage pornographic images on the site, leading to an eventual misdemeanor conviction.
The conviction is under appeal. But it required Shoemaker to register as a sex offender, causing the city to block his plans for a carousel on the pier.
As a result of Tuesday’s agreement, Shoemaker may yet realize his dream of a carousel on the waterfront. The agreement gives him first right of refusal for the operation of a carousel, if one is desired by the City or CenterCal within the next eight years.
The departure of the Fun Factory is a long time coming in the eyes of some residents, including resident Paul Moses, who visited the Fun Factory as a child and has watched its decline into a “swap meet.”
“Recently, my sister-in-law and her daughters came down to visit…they went to the Fun Factory, played games, and went to redeem their tickets for a Mystery Bag,” Moses said. “Inside that bag was a pencil, an ashtray, and a Hustler Casino tank top.…this [buyout] is $9 million well-spent.”
Resident Gina DiPietro was incensed at the prospect of paying $9 million to a registered sex offender.
“I can’t even fathom how this could be happening, and how we cannot work around this,” DiPietro said. “It doesn’t make sense from a moral ground whatsoever. Is it greed driving the City?”
Councilwoman Martha Barbee sympathized with DiPietro’s concern.
“Whatever the history, it can be tawdry and upsetting to many of us who are parents. But it’s a financial decision, and we have to separate that from being emotional,” Barbee said. “At the end of the day, hastening the departure of that situation is important.”
Councilman Bill Brand made the case for both sides before ultimately electing to vote against the amendment.
“It’s nice to have control…if you want to partner with someone else, you don’t have Fisherman’s Cove to deal with,” Brand said. “If I went along, it’s only because of control, and not to make sure CenterCal goes through…it’s too big, too risky and the public doesn’t want it.”
The next morning, Brand clarified his position. “I’m not comfortable with committing to paying the Fun Factory $9 million to vacate; I think there’s a better deal down the road…I had more concerns about purchasing this lease than simply clearing the path for CenterCal to build their mall,” Brand said.
Further lease discussions with CenterCal are scheduled for the Jan. 31 meeting. That evening the City will hold a public hearing to discuss the Agreement for the Lease of the Property and Infrastructure Financing with CenterCal.
