CUDAHY — How many mini-malls with video rental shops and other small retail businesses can this one-square-mile city support?
City officials believe that Cudahy has already reached the limit.
The Redevelopment Agency, following the advice of its administrative staff, approved a proposal for a 2-story medical clinic, rejecting plans for a shopping center on the same site at Atlantic Boulevard and Elizabeth Street.
The staff is convinced that the city is saturated with small shopping centers with video rentals, said City Manager Gerald Caton. "Video businesses jump from one small development to the other. They are not creating new businesses or new customers," Caton said.
But attorney Murray Kane said the shopping center developers were proposing a "quality retail development" that would have included a drug store and major restaurant. Kane said the city staff's report was incomplete and biased in favor of the proposed medical clinic.
Replace Smaller Clinic
The $9-million medical building, to be operated by a division of Kaiser Permanente, Kaiser Hospital Foundation Health Plan Inc., would serve about 100,000 patients and replace a smaller clinic in Huntington Park that would be closed. It would employ about 100 people, including doctors and support staff.
Kaiser, a nationwide health-care organization, would bring prestige and attract potential shoppers from outside the city, but would not compete with the existing retail centers, Adolfo Reta, director of Community Development, told the agency directors before the 3-0 vote for the medical building.
"We realize Atlantic Boulevard needs a mix of development. A medical office is a good development," Reta said in an interview.
The shopping center had been proposed by Gateway Triangle Development Corp. of Los Angeles. Farshad Safaie-Kia, the president of Gateway, said in an interview that the company had been negotiating with such major tenants as a drug store, sporting goods store, a shoe store and a restaurant. He said he could not reveal their names.
The shopping center would have generated an estimated $203,000 in revenues from sales taxes and property taxes in its first year, compared with $122,000 from a medical clinic. Total tax revenues from the shopping center would have climbed to an estimated $333,000 in 15 years.
High Vacancy Rate
But Reta said the Gateway project could hurt "overall retail effort. (Gateway) will bring in a doughnut shop and video rentals. We got all that now." The city already was experiencing a high vacancy rate in its retail development center along Atlantic Boulevard, the city's main thoroughfare, Reta told the agency members.
"Staff believes that the development of another retail strip center would only exacerbate the already increasing problem of failing business due to the inability of attracting trade from outside the city," Reta said in the prepared report to the agency.
Reta said the city would conduct an inventory soon to determine the exact number of mini-malls in the city and what each contained.
The 3-0 agency vote came after very little discussion. Agency Chairman Bill Colon abstained. Another agency member, Gabe Zippi was absent.
Agency member John Robertson said: "Both proposals (Kaiser and Gateway) are interesting but we can't put both on the same site. I'm thinking about the future development of the city."
Colon said in an interview that he abstained because he had questions about both projects. "I'm concerned about Kaiser and (the amount of) sales tax revenue. I'm also concerned about mini-malls. I look around and see empty stores in the city," said Colon, who is also mayor.
Both Kaiser and Gateway own land in the 4-acre area in the agency's redevelopment district. Kaiser owns about an acre of land in which an abandoned building is located. Gateway owns about two acres, the majority of which is a parking lot. Two other private residences take up the remaining space.
The agency and Kaiser must now work out a way to get the remaining land needed for the project, which could mean acquiring the land through condemnation proceedings. Gateway has said it would not be willing give up its land, Reta said. Kane, the Gateway attorney, said he would not comment on what the company would do.
A spokesman for Kaiser said the private owners have expressed a willingness to sell.