County Agrees to Purchase Sears Tower, Ease Alhambra Tax Loss

The county’s sprawling Department of Public Works, which is housed in three separate locations near downtown Los Angeles, will buy the 12-story Sears office tower in Alhambra for $37 million as a permanent home for its 1,500 employees.

With the backing of Alhambra city officials who once opposed the plan, the county Board of Supervisors on Tuesday voted 3-0 to purchase the building and 18 acres of land at 900 S. Fremont Ave. from the Alexander Haagen Development Co. Supervisors Kenneth Hahn and Deane Dana were absent.

The board also approved construction of an annex next to the tower that will house an automotive service center for the department’s fleet of vehicles.

In a related vote, the board agreed to sell one of the department’s three existing buildings to USC for a new hospital facility. The $11 million from the sale of the building at 1540 Alcazar St. will be applied to the cost of the Sears tower, county officials said.

Alhambra City Manager Kevin Murphy, who had vehemently opposed the sale of the Sears tower to the county because of an anticipated tax revenue loss of $570,000 per year, said the county has agreed to offset the city’s losses with about $4 million in funding for local public works projects.

“We’d kind of like to brag because we didn’t give anything up,” Murphy said. “In fact, we got something pretty good back.”

Murphy said the city expects to lose about $320,000 in sales tax revenue each year because of the closure of a Sears catalogue sales center in the tower. In addition, the city will lose $250,000 in property taxes each year because the county is exempt from property taxes.

To offset those losses, Murphy said the county has agreed to provide the city an additional $1 million for a $4.6-million joint city-county street-widening project already under way on Mission Road. The county had already agreed to pay $1.3 million for the project.

In addition, Murphy said, the county has agreed to undertake public works projects totaling about $3 million, which would include storm drain improvements.

“Alhambra has some real flood control problems, and we will be assessing the situation and proposing the best way to alleviate it,” said Ken Kummerfeld of the Department of Public Works. He said the county has “made a commitment to Alhambra” but that all funding projects will be subject to final approval by the Board of Supervisors.

Despite his support of the Sears purchase, Supervisor Pete Schabarum warned that the purchase “has already become too costly” and promised to look for ways to keep costs down.

He said that because the county had already promised to sell one of its public works buildings to USC, the board had no choice but to find a headquarters quickly.

“We are locked into this,” Schabarum said. “Having made ourselves essentially pregnant, we’ve got to go ahead and deliver the baby and make this deal.”

Schabarum asked county staff to look for possible savings on the $7-million cost of the annex and on a projected cost of $7.6 million to remodel the office tower.

County employees could begin moving into the tower this fall after initial indoor remodeling work is completed, county officials said.

Sears has been moving its Alhambra employees to Chicago and expects to vacate the tower by July. However, the Sears retail store next to the office tower has remained open, and city officials say they hope the store does not shut its doors.

“The $64,000 question is whether Sears will stay open,” said Michael Martin, deputy executive director of the Alhambra Redevelopment Agency.

Martin said he believes the company is waiting to see whether business improves this fall after a Price Club discount warehouse opens nearby at Palm and Commonwealth avenues.

Martin said the new public works headquarters “will be a good neighbor for Alhambra,” noting that the 1,500 county workers will bring more business to restaurants and retail stores in the area.

Sears officials could not be reached for comment but have said in recent months that they have no plans to close the retail outlet in Alhambra.