Alhambra Sears Sale Draws Fire
A proposal by Los Angeles County to turn a retail and office complex into county offices has angered city officials concerned at what they say would be an annual loss of $570,000 in tax revenue.
“Our position is one of adamant opposition,” Alhambra City Manager Kevin Murphy said. “We’re going to try to do anything to overturn the proposal.”
City officials said the estimated annual loss of $320,000 in sales tax revenue and $250,000 in property tax revenue would be crippling.
But county officials contend that the city would benefit financially through the buying power of the more than 1,300 employees who would be added to the work force in Alhambra.
‘Makes Sense for Everybody’
“Doggone it, it makes sense for everybody,” said William Kreger, the county’s assistant administrator for asset development. “We’re not coming in as a cold, callous neighbor. Their (city officials) behavior I find completely mystifying. We’ve got something here that makes sense.”
Ollie Blanning, senior deputy to Los Angeles County Supervisor Michael D. Antonovich, whose district includes Alhambra, said Antonovich is trying to arrange a meeting between officials of Alhambra and the county so that they can “come to some kind of compromise.”
The county already is negotiating with a development company to buy the 22-acre complex formerly owned by Sears, Roebuck & Co., which includes a 12-story office building, retail store and automotive center.
The county wants to use the buildings to consolidate administrative and maintenance operations of the Department of Public Works and to build 20 courtrooms for the Dependency Court, which hears cases involving neglected, abused and abandoned children.
“We have reached substantive agreement. We have the essence of a deal,” said Kreger, adding that he would like to resolve the differences with the city so that the Board of Supervisors could approve the purchase of the property within 30 days. Kreger would not disclose details of the agreement.
In September, the Alexander Haagen Development Co., a Manhattan Beach development firm, bought the property, on the southeast corner of Commonwealth and Fremont avenues, from Sears.
Sears has been relocating its western regional offices out of the office building (known as the Tower) to Chicago, as part of a management consolidation. By July, the office building will be empty.
However, the future of the retail store and the automotive center, which are still operating, is unclear.
Kreger said Haagen officials have assured him that Sears does not intend to renew its lease on those two buildings when it expires in 1988.
Sears spokesman C. W. Rule said the company has a two-year lease with Haagen for the store and automotive center and has the option to renew “as long as we need to.”
Reports that Sears is closing are “totally wrong,” Rule said in a telephone interview from Chicago.
“I think it would be foolish if we told the community we were closing in two years,” Rule said. “We have absolutely no plans to shut down. I can just tell you we’re not going to do it.”
Haagen officials could not be reached for comment.
Kreger said that documents presented by Haagen representatives during negotiations with the county showed that Sears intends to close the store and automotive center when its two-year lease expires.
“If Sears had a long-term lease there would be no sense in pursuing it. They are going to leave no matter what,” Kreger said.
“We haven’t been able to figure out who’s telling us the truth,” Alhambra’s Murphy said.
Even if Sears extended its lease for its retail store and automotive center, the county would like to buy the office building from Haagen, Kreger said.
However, Kreger said the county would not use its power of eminent domain to take the land. “The county could, but we wouldn’t,” he said.
When Alhambra officials learned about the county proposal on Jan. 9, city officials immediately rallied against it.
Murphy, who is also executive director of the Alhambra Redevelopment Agency, said city officials oppose the proposal because they fear it will cost the city much needed revenue.
Sears is “the No. 1 sales tax producer in the city,” he said.
If Sears does close the store and automotive center, city officials would like to replace them with private retail businesses that can produce sales and property tax revenue, Murphy said.
No Objections to Leasing
Although city officials would not object if the county leased the office building from Haagen, Murphy said, they do not want the county to buy the structure because the county is exempt from paying property taxes.
But Kreger said the county takeover will help Alhambra.
He said the city might find it difficult to find another retail outlet to replace the Sears store because the store is so big.
More important, Kreger said, is the fact that county employees would shop in nearby stores and patronize restaurants in the area, stimulating local business. Lawyers also might rent office space elsewhere in the city to be near the new courtrooms, he said.
But Murphy complained that money spent in the city would not offset what the city would lose in tax revenue. “It’s like a mountain and a molehill,” he said.
Mayor J. Parker Williams said a possible loss of tax revenue could eventually mean some budget cuts for the city.
“We’re just not going to stand for it,” he said. “Whatever steps we are allowed, we are going to pursue.”
Murphy would not discuss what those steps might be. “I really would not prefer to give our legal strategy in the newspaper. I don’t think it’s prudent to do that,” he said.
Hindrance to Plans
Murphy said the county proposal would hinder plans to attract more businesses to downtown Alhambra.
The Alhambra Redevelopment Agency had planned a 340-acre project around the former Sears complex, including a proposed Price Club outlet on Fremont Avenue across the street from the Sears store.
If the county takes over the Sears site, those plans would be disrupted, Murphy said, because a non-commercial entity would not fit in with the retail complex the city envisions.
The county began studying acquisition of the Alhambra property in April, when Sears announced plans to phase out its western regional headquarters, Kreger said.
The Alhambra site was chosen over four or five others in the county because it was considered more cost-effective to use the existing buildings rather than construct new ones, Kreger said. The courtrooms are needed to alleviate crowding at the Criminal Courts Building in downtown Los Angeles, he said.
Kreger said three Department of Public Works offices now housed in separate locations would be consolidated in the 381,997-square-foot office building. The automotive center would serve as a maintenance garage for Public Works pool cars and the retail store would be used as a warehouse or to house courtrooms of the Dependency Court.
Kreger hopes that the county can complete negotiations for the site and occupy the office building within six months and take over the retail store and automotive center buildings when Sears’ lease expires in two years.