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MALIBU, CA-The City of Malibu has acquired the 35,000-square-foot Malibu Performing Arts Center and Vineyard Christian Fellowship building at 23825 Stuart Ranch Rd. for $15 million to serve as a new city hall after submitting the winning bid at a bankruptcy auction at the US Bankruptcy Court for the Central District of California in Woodland Hills. The new building will double the city hall space for Malibu, which is now in a nearby building at 23815 Stuart Ranch Rd. and was facing a significant rent hike at its existing facility.

The city submitted a stalking horse contract to the bankruptcy trustee, thereby setting the opening price for the property at $15 million, according to real estate attorneys at the Los Angeles office of McKenna Long & Aldridge. The attorneys included real estate partners Tony Canzoneri and Geoff Mitchell as well as firm bankruptcy specialists Gary Caris and Lesley Anne Hawes.

According to the attorneys, the strategy allowed the city to negotiate the terms of the deal, which had to be accepted with few modifications by other prospective purchasers. In addition, competing bidders had to exceed the city’s initial bid by at least $350,000.

In late 2008 when owners of the property filed for bankruptcy, the city determined that rather than continuing to pay more than $800,000 a year in rent for its current premises, which was expected to increase to $950,000 a year over the next three years, it should consider buying the Performing Arts Center. The 35,000-square-foot building more than doubles Malibu’s current city hall space and, “given today’s real estate market, it clearly made good sense to acquire the property,” according to city manager Jim Thorsen.

Malibu plans to convert the building into its new city hall while retaining certain income-generating aspects of the complex, including its 500-seat theater, which have the potential to bring additional revenues to Malibu, Thorsen says.

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