Signal Hill awaits State approval on revised plan for former redevelopment properties

Sean Belk/Signal Tribune In-N-Out Burger (far right) overlooks a 14-acre former redevelopment property on Spring Street between California and Atlantic avenues that Signal Hill Petroleum plans to acquire for a mixed-use development, including a hotel, medical offices and retail.

Sean Belk/Signal Tribune
In-N-Out Burger (far right) overlooks a 14-acre former redevelopment property on Spring Street between California and Atlantic avenues that Signal Hill Petroleum plans to acquire for a mixed-use development, including a hotel, medical offices and retail.

Sean Belk
Staff Writer

It could take up to a year for Signal Hill to receive final approval from the State Department of Finance (DOF) on a revised plan for the sale and/or development of former redevelopment properties, according to city officials.
Acting as the successor agency to the former Signal Hill Redevelopment Agency (RDA), the City Council approved on Jan. 21 revising its long-range property-management plan, which was submitted to the State for final approval this month.
Elise McCaleb, the City’s economic development manager, said during the successor agency meeting in January that it may take a while to receive final approval, adding that the State is backed up with working on the state budget and approving recognized obligation-payment schedules for cities across the state.
As of last month, 23 property-management plans had been approved by the State, according to McCaleb, who added that she heard of one plan that wasn’t approved until about 11 months after it was submitted.
“It may be that it takes up to a year for the Department of Finance to approve the plan,” she told the Council.
The plan is a critical step for the City to dissolve leftover redevelopment properties and carry out enforceable obligations as mandated by the State Legislature, which abolished redevelopment nearly two years ago as a way to fix a budget deficit.
Out of nine former redevelopment properties in Signal Hill, three would be transferred to the City for “government purpose,” and the remaining six would either be sold to a specific developer or put on the market, according to a staff report.
During the successor agency meeting last month, City Manager Ken Farfsing noted that proceeds from property sales would first go to the Los Angeles County Auditor Controller, which would then distribute the proceeds among taxing entities.
Signal Hill would only get a fraction (0.6 percent) of the profits since it’s a “no/low property-tax city” while a majority of the proceeds would go to the County of Los Angeles and the Long Beach Unified School District, he said.
Still, Farfsing pointed out that some of the properties planned for future development have the potential to generate new sales tax or hotel-bed tax revenues for Signal Hill.
“I think it’s incumbent upon the City, as we develop these properties, to maximize the other potential revenues, which would be sales tax, hotel-bed tax [or] other types of revenues that could come out of these properties,” he said.
The largest property on the list is a 14-acre site on Spring Street between California and Atlantic avenues. The City plans to sell the vacant site, known as 700 Spring St., to Signal Hill Petroleum, which is planning a mixed-use development that may include a new hotel, medical offices and retail, according to staff reports.
City officials have indicated, however, that some of the former redevelopment properties will be sold at prices lower than when they were first purchased at because of site deterioration, market conditions and costly environmental-remediation requirements.
According to the original property-management plan that the Council approved on Sept. 17, city officials estimate that environmental remediation of the Spring Street site may cost up to $4.8 million, with oil-well re-abandonment alone costing $2.7 million.
The plan states that the site currently has five active wells, seven idle wells and 28 abandoned wells, adding that 18 of the abandoned wells need to be excavated, leak-tested and potentially re-abandoned to meet State standards.
Signal Hill Petroleum officials have expressed commitment to acquiring the property in hopes of luring new businesses that would complement the property owner’s other development– a new Chipotle restaurant, a new drive-through Starbucks and a new Sprint retail store at the adjacent Gateway Center.
Signal Hill city officials, however, have stated publically during subsequent Council meetings that the City should come up with new “mechanisms” to help incentivize developments, since redevelopment, which previously funded most of the environmental remediation and oil-well cleanups for projects, is no longer available.
Another former redevelopment property slated for future development is a site that includes various parcels on the 2400 block of Gardena Avenue near the Fresh & Easy Neighborhood Market. The site is zoned for commercial retail and is part of the Crescent Heights Historic District Plan.
Though city officials indicate that “no specific developers” have come forward, the City plans to market the property for a “mixed-use commercial center and new retail” to support the Fresh & Easy store. Plans also call for a “drugstore, view restaurant and related uses” in addition to the “promotion of historic and cultural resources.”
Other properties that the City is planning for future development include: a site at Cherry Avenue and 27th Street (location of former Giant Grinder Deli) slated for retail or an auto dealership; a site at 1850 E. 28th St.; a 6,250 square-foot site at 859 Patterson St. that is being sold to EDCO Disposal; and a 3.15-acre site being sold to Glenn E. Thomas Dodge for the development of a new, permanent Fiat dealership.
Once the State approves Signal Hill’s property-management plan, the City would be able to start marketing the properties through a request-for-proposals and begin negotiations for purchase agreements, which would also require State approval.
Properties being retained for “government purpose” include: a 12-space parking lot at 2621 St. Louis Ave.; the new Signal Hill Police Station at 2745 Walnut Ave.; and a site at 3100 California Avenue that the City plans to turn into a dog park.

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