WHITTIER — The City Council has approved the construction of a 16-acre shopping center at Whittier Boulevard and Hadley Street, and committed $7.5 million to subsidize the project.
The $11.5-million center, which will be completed in about two years, is the first major commercial project approved since the Oct. 1 earthquake. The center is slated to include an Albertson's grocery store, Osco drug store, six restaurants and several shops.
City officials hope the shopping center will lure people down Hadley Street to the Uptown Village business district.
The project developer, the Santa Monica-based Urbatec, plans to call the center the "Whittier Village Gateway."
'Catalyst for Development'
"It's a very important project," said Assistant City Manager Robert Griego. "It's going to be a catalyst for development along Whittier Boulevard."
The City Council approved the project Tuesday night, despite complaints from area merchants and historic preservationists.
The city has been trying to attract a redevelopment project to that corner for years, Griego said, and has been negotiating since November with Urbatec. The deal had been delayed by the earthquake, which forced the redevelopment staff to concentrate on plans for rebuilding the earthquake-torn Uptown business district.
Griego acknowledged that the delays have placed business owners in the area in limbo.
Waiting for that action is like "sleeping under a guillotine," property owner Robert Van Usting told the council. "You don't know moment to moment what's going on."
The proposed shopping center site is also important to historic preservationists because it includes the 1892 Southern Pacific Railroad Depot, listed on the National Register of Historic Places.
John Smith, a spokesman for the Save Our Depot Coalition, predicted the project would be "a forest-like line of look-alike stucco boxes in a vast sea of black asphalt."
Would Move Depot
The city has pledged to move the depot to another site, but Smith said the structure's historic significance would be compromised by moving it from the railroad tracks. Instead, Smith suggested that the depot would make a distinctive centerpiece for the shopping center, possibly as a restaurant. Several receptive council members recommended that the developer consider the suggestion, but did not include the recommendation in the legal agreement that the council approved.
In a memo, Griego described the area as "classically blighted," saying its combination of undeveloped and badly developed land "reflects badly on the city." The area's property owners include a car wash, tune-up shop, container company, rubber manufacturer, restaurant and three apartment buildings. Most of the structures suffered little or no damage in the Oct. 1 earthquake.
The city's part of the deal includes street improvements and buying the property from the current owners. Urbatec, once presented with a land parcel, guarantees to build the project within one year.
Of the $7.5 million the city plans to spend, $3.2 million will go to acquire the property and $4.3 million for street and sewer improvements, including the closure of Magnolia Avenue between Whittier Boulevard and Hadley Street to make way for the center.
The $7.5 million will come from about $6.6 million in bond sales and $900,000 in tax revenues from other projects in the Whittier Boulevard Redevelopment Area, Griego said. City officials estimate the city will recoup the $6.6 million through sales tax revenues generated over the next 30 years.
Despite optimism about redeveloping the area, the city faces two significant obstacles in fulfilling its part of the deal: possible toxic waste contamination on the site and at least one hostile property owner.
Over the years, Griego said, gas stations and manufacturing firms have occupied the shopping center site. "Things they use could possibly have contaminated the soil," Griego said.
According to the legal agreement between the city and Urbatec, the city will be responsible for cleaning up any toxic wastes and then will deduct the cost of the cleanup from the land's sale price. Preliminary soil test results will be complete in about a month, Griego said. The project could be jeopardized if the contamination proves to be extensive, he added.
The project also could be held up by Mark S. Blonstein, owner of Hadley Car Wash, who claims the city has been blocking the sale of his property pending the completion of the redevelopment deal. Blonstein says his 2-acre property is worth more than $3 million, but the city has only offered about $1 million.
Griego said the city was in court on the case Monday and was given 90 days to make Blonstein an offer.
Blonstein said his property will be legally exempt from the project if he does not settle with the city in that 90-day period. "It doesn't look very hopeful," Blonstein said.
The city will offer Blonstein "the appraised value" for the property, Griego said. He did not know that figure, but said it will be substantially less than $2 million. "Even if he doesn't like it we still have ways of taking the property," Griego said.