The city Redevelopment Agency has chosen the Trammell Crow Co. to develop the abandoned Uniroyal plant into a hotel-office complex that would leave largely intact the famous facade of the Santa Ana Freeway landmark, which was built to resemble an Assyrian palace.
The board of directors of the Redevelopment Agency voted unanimously Tuesday to enter into an exclusive negotiating agreement with Trammell Crow, one of five finalists in the hotly contested derby for the 35-acre redevelopment project.
Commerce City Council members, who double as Redevelopment Agency directors, cited Trammell Crow's proposed treatment of the famous wall and six-story office tower, and its track record as the largest land owner and developer in the city as the main reasons for their choice. Trammell Crow's proposal would preserve more of the wall than any of the others.
"That wall means so much to our community," said Councilman Arturo Marquez.
As proposed, Trammell Crow would remove 140 feet of the 1,700-foot wall that is the front of the abandoned plant to allow cars into the complex, said company spokesman David Armstrong. The bottom portion of another 200 feet of the facade also would be removed to provide access for pedestrians.
Hotel, Museum in Proposal
Dubbed "The Citadel," the $80-million project would include a 10-story, 193-room hotel, three-story and four-story office buildings, a restaurant and a museum.
"It's going to be a spectacular project," said Hayden C. Eaves III, managing partner of the Los Angeles division of the Dallas-based Trammell Crow.
Eaves said that if all goes well, work on the project could start late this year and be completed about three years later. Trammell Crow has 90 days to work out the details of a development agreement with the Redevelopment Agency.
Representatives from 16 companies contacted the city with preliminary plans to develop the Uniroyal site. Five finalists were asked to submit development proposals, which were reviewed and rated by an accounting firm hired by the city.
Trammell Crow's proposal received the top rating from the firm, Peat, Marwick, Mitchell & Co. of Los Angeles. A proposal by Lincoln Property Co. of Dallas was rated second, and the proposal from the Sheldon L. Pollack Corp. of Los Angeles was third.
The proposals were scored on the financial return they would offer the city as well as planning and design, including how the developer would treat the wall. The third factor was the risk to the city, which included the chances of obtaining financing for the project, if tenants could be secured, and how easy it would be to re-lease or resell the site if a project were to fail.
'Best Treatment of Wall'
Peat, Marwick, Mitchell called the Trammell Crow proposal "superior design and planning including the best treatment of the wall." It also noted the city assumed the least risk under the proposal because its mix of office and industrial space could be readily marketed.
It rated as "medium" the financial return of the project. Trammell Crow agreed to pay $14.5 million for the land, and estimated that its project would generate annual revenues of $293,000 in sales taxes, $207,000 in bed taxes and $406,000 in tax-increment revenue. The price of the land includes a $2.4-million museum, which would be made from the existing office tower and donated to the city.
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 then diverted to the redevelopment agency. That difference is the tax increment.
The museum will probably be a shrine of area history, said Ira Gwin, director of Community Development. "(But) I don't even know what to put in it at this point," he said.
The Lincoln Property proposal was rated second because it had the highest financial return. Peat, Marwick, Mitchell called the project's planning and treatment of the wall "adequate." And the consultants noted that the project was riskier than the Trammell Crow project because of its heavy reliance on retail space.
Lincoln Property's proposed development consisted of a 455,000-square-foot shopping center that would have incorporated portions of the wall. Lincoln agreed to pay $15.5 million for the property, with estimated annual bed tax returns of $1 million, and yearly tax-increment revenue of $140,000.
The Sheldon Pollack project, which featured an amusement park, was rated financially superior but was judged more risky because it would be difficult to find a new tenant for an amusement park if the project failed. Sheldon Pollack agreed to pay $15 million for the land, and estimated that its project would generate $354,000 a year in sales tax revenue, $268,000 in bed tax revenue and 700,000 in tax increment.
Commerce has no bed tax, but the City Council is considering asking city voters to implement one, Gwin said.
Jobs generated by the projects also were a factor. The Trammell Crow project is expected to provide full-time, permanent work for about 800 people, while Lincoln Property and Sheldon Pollack anticipated providing 910 and 850 full-time jobs, respectively.
Intrigue Spices Contest
Meanwhile, the contest for rights to the project was not without intrigue.
The Redevelopment Agency directors moved into closed session Monday to consider disqualifying Sheldon Pollack because a possible agent of the firm may have contacted the directors in violation of a board edict.
In November, the directors voted 3 to 2 to prohibit potential developers from contacting them, and warned that such an action could be grounds for disqualification. The action was taken to avoid favoritism, former interim City Administrator Bob Williams said.
All the council members said they recently received calls or letters from Linda Stanfield Adams, a member of the city's Industrial Council, a powerful coalition of business and industrial groups.
Stanfield Adams, who was a representative of Hyatt City of Commerce before her resigning in January, told the council members she favored the Sheldon Pollack project, they said.
But after a brief investigation, Williams and City Atty. William Camil determined that Sheldon Pollack did not ask Stanfield Adams to lobby on its behalf, Williams said. The directors voted not to disqualify the company.
Stanfield Adams attended Tuesday's meeting, but declined comment. In a March 3 letter to Williams, she said she had hoped to secure a job with the project had Sheldon Pollack been selected.
Commerce bought the Uniroyal property from fireworks magnate and convicted political corrupter W. Patrick Moriarty for $14 million in 1983.
The plant, which was built in 1929 by rubber magnate Adolph Schliecher to resemble an Assyrian palace, was closed in 1978. In 1982, the California State Historical Resources Commission approved the site for nomination to the National Register of Historic Places, but it was never included in the register, Gwin said. Commerce has designated the obsolete factory a cultural/historic landmark.