Plan to Shut Gas Station, Build A New One, Fuels Battle

Gary Lazar, who runs a chain of service stations in Southern California, is battling the city Redevelopment Agency to keep it from seizing his land here, razing the gas station on it and selling the property so another service station can be built in its place.

Attorneys for the two sides have been trying to negotiate a settlement since the Redevelopment Agency filed an eminent domain complaint in Superior Court last July to make way for a 224,000-square-foot shopping center.

Lazar--who owns the land with his former wife, Rebecca--contends that they were not given adequate opportunity to participate in the project so they could keep their lot at 9006 Whittier Blvd. They also say the development as planned would allow a competitor--in this case Exxon--to build a self-service gasoline station on their parcel at one of Pico Rivera’s busiest intersections.

Lazar is president of California Target Enterprises Inc., which operates the independent station and more than 100 others throughout Southern California. The Lazars lease the land to California Target Enterprises.

“This entire proceeding is barred by antitrust and unfair business practice law,” said C. Edward Dilkes, the lawyer representing the Lazars. “It unfairly eliminates competition and . . . (uses) the government’s power to transfer an advantage from one competitor to another in the same market.”

The city counters that the Lazars were given a chance to participate in the redevelopment project but refused, triggering the condemnation proceedings.

“We attempted to put them in touch with the developer to try to work out a deal where they could remain at the site, and the developer did offer them an opportunity. . . . It was only after the condemnation proceeding was filed that they said they hadn’t been given a right to participate and anti-trust violations were involved,” said David Caretto, assistant city manager.

The Redevelopment Agency entered into an agreement with the Bellevue, Wash.-based Rainier Fund in August, 1984, to develop the shopping center on the south side of Whittier between Durfee Avenue and Rosemead Boulevard.

Dubbed the Crossroads Plaza Project, the shopping center will include a 60,000-square-foot supermarket, a 115,000-square-foot home improvement center and about 50,000 square feet of additional store and restaurant space. Rainier Fund planned to sell the Lazars’ parcel to Exxon Corp. for a self-service gas station.

The agency set out to purchase 54 parcels included in the 19-acre shopping center site. The agency found that the buildings on the land were old and dilapidated, “adding to an overall poor image of Whittier Boulevard.” It also found that there were inadequate public improvements and parking. Overall, the area was labeled “stagnant and unproductive.” The 19 acres were home to 35 houses and 35 businesses, Caretto said.

When some of the property owners declined to voluntarily sell their land in January, 1986, the agency began proceedings to acquire the parcels through eminent domain.

At stake is a sizable increase in property tax revenue the agency would reap from the project, and an equally large hike in sales tax revenue that is expected to be generated from the new stores and restaurants. The current assessed valuation of the site is a little more than $4 million, while the Crossroads Plaza Project is expected to be valued at $22 million.

When a redevelopment district is created, property taxes used to support traditional government services are frozen. Additional tax revenue generated from the higher value of redeveloped properties is diverted to the agency for redevelopment projects.

More Taxes Anticipated

The city expects to receive $215,000 annually in additional property tax revenue from the project. In addition, the site now generates $55,000 in annual sales tax, while the proposed project is expected to raise that figure to about $750,000.

The Redevelopment Agency has acquired all of the parcels except the one owned by the Lazars.

All of the owners, including the Lazars, were notified in August, 1985, that they could participate in the redevelopment project, according to city records.

Lazar was out of town and unavailable for comment last week, but in court documents he stated that he and his former wife were not given a fair chance to negotiate to keep their land.

After he was notified of the redevelopment plans, Lazar said in court documents that the city referred him to a Rainier Fund spokesman. The spokesman, Hank Gordon, described plans to sell a 35,000-square-foot parcel--including the Lazar property--to Exxon for $700,000, Lazar and Caretto said. Lazar said Gordon offered him the same deal, which he declined, ending the negotiations.

“He assured us that we were not going to be allowed to stay. Since this appeared to be a fait accompli, we made no further efforts to protect our rights as owner-participants,” Lazar said in the court documents. “We have consistently offered to cooperate in the redevelopment process and continue to do so.”

Agency Deposits Funds

Meanwhile, the Redevelopment Agency had the Lazars’ property assessed and deposited $314,000 with the court last July to obtain possession of the property pending a judgment.

The Lazars, who could have drawn from the deposit to acquire another parcel, instead filed a motion in Superior Court last October to stay the order of possession to prevent their land from being cleared.

“The use of eminent domain in this case is the most blatant anti-competitive and unfair business practice imaginable,” Dilkes wrote in the court motion.

In court documents, the Lazars said they should be reimbursed at least $1 million if they are forced to leave.

Hearings on the motion have been delayed five times while the parties have tried to negotiate a settlement. The motion is scheduled to be heard March 6.

Want to Keep Land

Dilkes said that ideally his clients would like to keep their land without conditions. He declined to say just how many improvements they would be willing to make to the property to be part of the redevelopment project.

“We have a lot of discussions with the city and I’m not willing to upset an apple cart,” Dilkes said.

But Lazar said in the court documents that he would be willing to provide the easements necessary for the project, as well as any facade improvements to conform with the design of the shopping center. Lazar noted that since 1982, California Target Enterprises has spent $16,500 for improvements to the station.

Caretto said that Rainier is trying to get out of its agreement with Exxon. The developer is considering a different use for the parcel so there would not be a gas station there if the Lazars decide to vacate, he said.

Ground Breaking Scheduled

Demolition of structures on the 19-acre site continues and ground breaking is scheduled for March 20. Several tenants have been allowed to remain until they can be relocated; two tenants will move into the new shopping center, Caretto said.

Of the condemnation proceedings, Dilkes said, “I do not believe the courts of this state will throw an independent gasoline dealer out in order to sell his property to one of the seven sisters.”

“Seven sisters” refers to the giant multinational oil corporations: Exxon Corp., British Petroleum Co., Royal Dutch/Shell Group, Mobil Oil Corp., Texaco Inc., Gulf Oil Corp., which was bought out by Chevron Corp. in 1984, and Standard Oil of California.