MONTEREY PARK — The City Council on Monday voted to invest an additional $2.4 million in the beleaguered Atlantic Square redevelopment project, pushing the city's share of the project's costs to $14 million.
The added financial commitment comes as work on the project, more than a year behind schedule, languishes because of a dispute between the city and the owner of the existing shopping center, which would be largely demolished under the plan. Negotiators have been unable to agree on a price for the site, at the intersection of South Atlantic Boulevard and Floral Drive.
The council's resolution, passed after nearly four hours of debate and public comment, takes into account higher property values and inflation that have boosted land prices during the project's delay.
Two years ago, the maximum cost of the site was estimated at $27 million, said Keith Breskin, the city's economic development director. Monday night's action, which also increased the developer's planned contribution to $18 million, "maxed it out to $32 million," he said.
The resolution also included a requirement that the developer, Champion Development Co. of Long Beach, show good faith by putting up a $125,000 deposit if it has not secured a lender by the beginning of next month.
The deposit amount, however, was dismissed as totally inadequate by Councilman Samuel Kiang, who cast the lone dissenting vote. Kiang said Tuesday that the city will be left financially unprotected should Champion default on the project.
"The city is at great risk, whereas the developer is not. . . . My fear is that we will end up accepting this assurance from him, and . . . it doesn't mean anything," he said.
At the council meeting Kiang pushed for a $300,000 deposit, but his motion went unseconded.
"If $125,000 isn't enough, I don't know that $300,000 will change that," Breskin said. "All we're asking is that we have assurance that (Champion) will get financing; they don't have to have financing at that point."
Bob Champion, president of the company, told the council that the $125,000 deposit should be sufficient since he has already shown his commitment to the project by spending more than $500,000 in predevelopment costs.
Kiang also questioned the premise behind the redevelopment: that the new Mediterranean-style mall will encourage shoppers to shop in Monterey Park rather than in surrounding cities. Currently, Monterey Park's per-capita sales tax revenue ranks far below other San Gabriel Valley cities as residents turn to shopping centers in neighboring cities for their purchases.
But, Breskin said, independent analysts project that a new mall in the Atlantic Square area will reduce the sales-tax drain to other cities by as much as 50%.
Mayor Judy Chu calls the area "the key to the entire city."
"It's the one large land mass that we have . . . where you could have a quality shopping center," Chu said. "I think that once you're able to revitalize that area, you'll be able to see economic benefit for the rest of the city."
And even if the long-term profits do not outweigh the city's cost of the project, she said, "my sense from residents is that they need those services so much that they are willing to invest the kind of money that's needed."
The revamped shopping center, once scheduled to open by the end of this year, is expected to be complete by the spring of 1992.