Redevelopment Project OKd : $2.4-Million Plan Will Bring Mall to San Fernando

The San Fernando City Council gave final approval Monday night to a $2.4-million redevelopment project that will bring a long-sought shopping center to a portion of the former San Fernando Airport site.

City officials estimate that the 235,000-square-foot commercial center will generate a half-million dollars in sales taxes annually, a 30% increase over 1985 sales tax revenues in the 2.5 square-mile city.

Since the closure of the San Fernando Airport in 1982, officials have been determined to see the property, the last large unoccupied parcel in the city, developed into a revenue source.

Even though the city did not own the land, the council voted to seek out a developer, then zoned a portion of the property for commercial use to prevent industrial development.

The council voted 4 to 0 to approve an agreement with Manhattan Beach-based Alexander Haagen Development Company. It calls for the city’s redevelopment agency to pay $3.3 million for 19 acres currently owned by Lucky Stores Inc. The agency will then sell the land to Haagen for $1.7 million.

Although the redevelopment agency is buying the land, the developer is loaning the city the purchase price. Over a 15-year period, the agency will repay the developer the remaining $1.6 million plus 10% interest. The redevelopment agency also will pay $800,000 for street, sewer and water-line improvement.

In what City Administrator Donald E. Penman described as “insurance for the city,” the agreement provides the city will make annual payments on the loan equal to 15% of the sales taxes generated by the shopping center.

“Basically, if the center does well, he could get paid back the $1.6 million before 15 years are up,” Penman said. “But if the center does poorly,” he said, the city’s debt “will be forgiven if he hasn’t received all the money at the end of time.”

Mayor Jess Margarito abstained from the vote on conflict-of-interest grounds because his political-action committee had accepted a $1,000 loan from the owner of the San Fernando Swap Meet, on the adjoining southern portion of the airport land. Development of the northern portion will likely raise the value of the southern portion.