Proposed shopping center slogs toward finish after 20 years

imageThe City of Los Angeles is moving forward on a $20 million South Los Angeles development project but not after a messy, 20-year struggle that has turned a spotlight on a redevelopment process that in the past has resulted in empty fields and broken promises.

The project to bring a badly needed shopping center to the corner of Slauson and Central avenues has exposed charges of political influence and favoritism in the redevelopment process run by the city’s Community Redevelopment Agency (CRA). And a partner in the development, Concerned Citizens of South Central Los Angeles (CCSCLA), has run into trouble in the past while working on public money projects.

Over the past 10 years, the nonprofit CCSCLA has been sued for breach of contract by the City, sued by construction contractors for nonpayment of invoices, and audited by the state controller over grants to build soccer fields.

Opponents of the group claim a political connection with City Council member Jan Perry — often mentioned as a candidate for the city’s next mayor — helped to deliver the project at Slauson and Central to Concerned Citizens.

“From the start this was a politically motivated process and it was intended to take a great benefit and give it to people who had supported certain politicians,” said Stanley Kramer, who had his land taken to build the project. “It was done from day one illegally.”

But Mark Williams of Concerned Citizens says that Jan Perry has turned her back on ordinary South L.A. citizens, favoring instead big development interests like AEG, and that she actually now seeks to destroy Concerned Citizens.

Most people, such as CRA Board member, Madeline Janis, say the shopping center project would help alleviate South L.A.’s status as a “food desert.” But she added that the project’s problems represent some of the worst mistakes and challenges of redevelopment.

“It’s an embarrassment,” said Janis, commenting on the long 20-year road, fraught with delays, the project has taken. The site has sat empty since 2006.

Who Are Concerned Citizens

When the ground was broken for Juanita Tate Elementary School in October 2009, Concerned Citizens was on hand for the ceremony. The school, set to open in 2011, is to be named for Concerned Citizens’ founder who passed away in 2004.

image“It’s fashionable now to look at this community as a new frontier in a place of possibility,” said Mark Williams, Tate’s son and Concerned Citizens’ director of youth programs. “It wasn’t always that way.”

Ironically, the school property used to belong to the nonprofit. It was taken from them after the group was sued for breach of contract by the City.

Concerned Citizens is a prominent community housing development and property management company working in South Los Angeles which evolved from a community activist organization. Williams said the group manages almost 700 housing units and owns close to $50 million dollars in real estate and investment.

“Concerned Citizens is involved in every real estate development in South Central Los Angeles, bar none, because of their relationship with the City Council,” said Deacon Alexander, a former Vernon/Main Neighborhood Council member who tangled with Tate over a community garden in the mid-2000’s. “There’s no two ways about that.”

But as a result of the nonprofit’s recent problems while working on public projects, opponents of Concerned Citizens are questioning how were they selected for the Slauson-Central project in the first place. The project, which will include $7 million in public subsidies, would be developed by a partnership with Concerned Citizens and Regency Partners, the largest grocery store center developer in the country.

Concerned Citizens, Past and Present

Concerned Citizens was formed by Juanita Tate in 1985 to fight a proposed trash incinerator project in South L.A.. After a successful bout to stop the project, the group evolved into an affordable housing developer which later on was able to secure funds for development projects due to a close relationship with 9th District City Council member, Jan Perry.

Alexander said Tate and Perry were like “bugs in a rug.”

“They did everything illegal and they did everything secret and they did it together,” added Alexander.

Deacon said Tate was a genius at block-by-block organizing which Perry benefited from during the 2001 council elections.

image“Juanita Tate is not a major player by no stretch of the imagination until Jan Perry comes to office. But by her coming to office it enables her to become an absolute major player,” added Deacon. “We don’t see that until we see her relationship with developers.”

But troubles began for Concerned Citizens when they began assembling grants to build soccer fields in South L.A.

In 2001, the group secured a $2.4 million block grant from the city to build a soccer field and youth center at the corner of Slauson and Main. After the property was purchased in 2003, the proposed Antes Columbus soccer field remained a collection of clay soccer fields until the grants expired and the property was taken away from Concerned Citizens through eminent domain and given to the LAUSD in 2008. In January 2010, the City was awarded $4.8 million dollars by the courts for breach of contract by Concerned Citizens for not completing the fields and center.

The city charged Concerned Citizens was attempting to flip the property and “left the Property in a blighted state as a bare dirt lot and then used the property for commercial activities while the market value of the Property increased.”

After the project collapsed, construction and architectural firms filed lawsuits against Concerned Citizens because of nonpayment for services. In three separate lawsuits against Concerned Citizens, the plaintiffs were awarded almost $400,000.

In addition, during a 2004 audit of money given out by the California parks department, it was discovered that the group received a $1 million grant from the state after getting a $2.1 million federal grant to fund the same project. Concerned Citizens had not stated it had received the federal grant on their application.

The group was eventually asked to pay the state back $170,000 which had been paid out to two of Tate’s sons who Concerned Citizens said were “consultants” on the project.

But Williams now claims that Jan Perry was the person actually responsible for deep-sixing the project. He said that Concerned Citizens was twice promised to receive special parking revenue funds from the city to help complete the project but the funds never came through and subsequently the grants expired because the project wasn’t completed.

“My guess is that Jan Perry’s office is the one that pulled the plug on Slauson and Main,” Williams said.

Yet, back at the beginning of the 2000s, when the time came to award the development agreement for the Slauson-Central project, opponents say Perry used her influence to steer the project towards Concerned Citizens. Despite the difficulties encountered by the group in recent years, Concerned Citizens remains a part of the development partnership and will be the property manager when the project is completed.

When asked if Perry had interceded on behalf of Tate and Concerned Citizens in order for them to be awarded the Slauson-Central development contract, Williams would not confirm the assertion. But he did confirm the tight relationship between the two women.

“My mother considered Jan Perry to be her daughter,” said Williams. “If there’s any single person that’s responsible for Jan Perry being the councilwoman, it was my mother Juanita Tate.”

Stabbing the table in front of him with his finger, Williams asserted, “Juanita delivered Jan Perry through votes.”

Tate famously sent out family members, aged 12 to 17, to canvas neighborhoods and get out the vote for Jan Perry and force a runoff election, which she won.

Williams added that Concerned Citizens was at the time the most prominent nonprofit with the established capacity to get projects done in the 9th District, because for-profit companies were not as willing. Therefore, according to Williams, Perry was most likely supportive of Concerned Citizens’ efforts.

In fact, when describing the development process in Los Angeles, Williams said that council support is not only helpful but “absolutely necessary.”

“So did Jan Perry give any political favor to this project?” said Williams. “Ask Jan Perry.”

“I cannot comment on items currently in litigation,” said Eva Kandarpa-Behrend, Jan Perry’s communications director, when asked.

A draft of the proposed site plan of the shopping center. For larger size, click here.

The Project

The Slauson-Central shopping center project that inspired that litigation is part of a 20-year effort to construct a new grocery store and a strip mall in South L.A. The plan was to utilize three adjoining plots to create the shopping center, which will be called the “Juanita Tate Marketplace” after the projected Summer 2011 completion date.

The anchor store will be a Northgate Gonzalez grocery store. Other tenants would include a pharmacy, a sit-down restaurant and various smaller stores.

CRA Board member Madeline Janis called the collection of lots, including a former metal recycling yard, an eyesore in an area “desperately lacking full service supermarkets.”

“It’s still a food desert. No question,” said Janis.”

Kramer Metals was located on the site since the 1970s until the property was taken under eminent domain in 2006 for the project.

In 1990 Concerned Citizens approached the owner, Stanley Kramer, about developing a shopping center at Slauson and Central avenues. Over the 1990s the parties failed to agree on a deal to jointly develop the property. Each side said the other backed out or made unreasonable demands during negotiations.

In the mid-1990s, the City Council passed the Recovery Redevelopment Plan for the Council District Nine Corridors which designated the Slauson thoroughfare a blighted area and made funds available to redevelop the corridor and create new jobs. Then, near the end of 1999, the CRA issued a Request For Proposal (RFP) to develop the Slauson-Central site. Kramer and his development partner lost out to Concerned Citizens when the RFP process came to an end.

After losing their eminent domain case, Kramer was moved off of his property by 2006 and now operates his company east of the site. Kramer said he attempted to cooperate with the proposal to build the shopping center but feels he wasn’t treated fairly from the beginning.

“We were eliminating blight not contributing blight,” Kramer said. “Of course some people don’t consider a pile of scrap necessarily beautiful but I guess beauty is all in the eyes of the beholder.”

Kramer filed multiple lawsuits to fight the property taking, to sue for public records regarding the project and to allege improper award of the project to Concerned Citizens. Currently, he is fighting the project on the City Council level in order to get the city to settle with him.

The CRA-assisted project will be the first commercial development done by Concerned Citizens. According to development agreement, Concerned Citizens will be allowed to lease a 1,000 square foot community center for $1 a year for 25 years and will also receive a developer fee amounting to $300,000, which Kramer has argued is a political reward.

“Take that $300,000 developer fee and spread it out over 20 years, there’s no money in it,” counters Williams. “We’ll never recoup the man-hours involved.”

Concerned Citizens’ partner in the development, Regency Partners, said that CCSCLA is an ideal partner because they are much more in tune with community needs.

“In any development project that knowledge is priceless so yeah we are very happy and lucky to have them as our partner,” John T. Mehigan, vice president of investments for Regency, when asked whether or not Concerned Citizens has been necessary to the development process.

Kramer’s attorney, Robert Silverstein, argues that the development process was never fair to Kramer and his neighbors and that officials were never going to allow the owners to develop their own property.

“The fix was in,” Silverstein said. “It was a sham process put on by the CRA with a predetermined result.”

Property document shows the lots that were taken through eminent domain for the project. For larger size, click here.

During the legal fight, which has cost the City $7 million in legal fees, one of Kramer’s arguments has been that Concerned Citizens is repeatedly mentioned as the presumptive owner of the shopping center after development.

In multiple city department memos, Concerned Citizens is mentioned as a partner in the ownership organization called “Slauson Central Partners, L.P.” However, on the development agreements, Concerned Citizens officers did not sign as representatives of Concerned Citizens. Kramer’s attorneys argue this will make their liability negligible if the partnership fails and, therefore, the agreement is invalid.

Williams responded that the RFP process was won fair and square by Concerned Citizens and refers to the scoring of each proposal submitted.

“There’s an objective reality,” said Williams. “There’s an RFP. These are documents. This is not like a subjective thing. Look at Kramer’s RFP and look at Concerned Citizens’ RFP. He responded and his response was deemed to be inadequate compared to our proposal. This is not as if he didn’t participate in the process. His effort wasn’t a serious effort.”

One of the few things that the two sides can agree on is the development system in the city is broken and prone to political influence.

Williams argues that each City Council member is like a mini-mayor for their district and what he or she says goes, for the most part.

“In my opinion, it’s broken because that way the political representatives have an inordinate say and influence over what gets built and what doesn’t get built,” said Williams.

Kramer added that City Council members seem to approve each other’s projects all too willingly.

“If a councilperson in this district proposes something, no matter how bad it is for the citizenry and no matter how badly it is put together, the rest of the City Council will not question it,” said Kramer. “They will simply rubber stamp it because they expect the same from those council members when they propose something in their council district.”

But Paul Zimmerman, the Executive Director of Southern California Association of NonProfit Housing, said that development is always inherently political and is about officials weighing the benefits and costs of projects.

“What I would object to is when that the power that is associated with making profit or the interests of making profit outweigh the social or local benefits,” Zimmerman said.

Williams now argues that delays in the project are actually reflective of Jan Perry switching her loyalty to larger development interests focused on downtown, such as Eli Broad and AEG.

A draft of the proposed site plan of the shopping center. For larger size, click here.

“The CRA staff has dropped the ball over and over and over and over again,” said Williams. “Have they done that through negligence and incompetence? Perhaps. Have they done it because they’ve been directed to do it by Jan Perry or the masters that Jan Perry serves? That’s more likely.”

Alexander said that people in the community really have no loyalty one way or the other and that they are more interested in shopping projects simply getting done.

“It’s a question of a power play of which the community has no interest in,” said Alexander. “They have no interest because it’s a project that needs to be developed.”

Empty Fields of Los Angeles

Despite the delays and running up of costs and legal fees, Perry’s office believes the project is still worth pursuing with the CRA.

“Without the support of the agency many projects like these (which act as catalysts for further development) would not be possible,” said Kandarpa-Behrend. “Developments like these bring tax increment to the community which can then be used for further development and economic development.”

Currently, the project is still moving forward and the 6.5-acre site has been cleared for development. It is undergoing environmental remediation which will cost $2 million in federal brownfields funds. Despite a piece of the site being a former scrap yard, Janis said there was an underestimating of the amount of toxics on the site.

In fact, in e-mail sent in 2004 regarding the $1.5 million remediation cost for the Kramer lot, CRA Project Manager Jenny Scanlin wrote “Woah! I didn’t realize Kramer’s was so high.”

Stanley Kramer and his attorney are now fighting a political battle and sent a letter to City Attorney Steve Cooley on September 7, asking for an investigation.

“We continue to fight at the City Council and we’ve not lost a single battle with no support of any city officials,” Kramer said. “All we’re asking is ‘Hey, treat us fairly. You guys have cheated us. You’ve lied and you’re continuing to lie and no one’s questioning it.'”

Williams said that Kramer’s assertions about what transpired during the process are false.

“Mr. Kramer is a liar,” said Williams. “And there’s no other way charitable way to put it. All of his rhetoric, years after the fact that ‘I could develop this without public subsidy.’ This is a lie.”

But Janis ultimately believes there was no case of bad faith on anyone’s part.

“I think there’s a set of circumstances that resulted in unconscionable delays,” Janis said. “It was very ambitious and maybe too ambitious to take a site that was so polluted and contaminated as well as lacking a cooperative seller and turn that into a successful grocery store in a reasonable amount of time.”

And just as with the Antes Columbus soccer field, the city is left with empty field waiting for a shovel to finally dig in.

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