Difficult Cleanup at Site Delays Honda’s Move to Torrance
More than 1,300 jobs that would have moved to Torrance in 1989 will not arrive until one year later because of problems in cleaning up the site of Honda North American Inc.’s massive headquarters complex on the city’s eastern border.
Most of the people who will work there now work at Honda facilities in Gardena, so the delay will not have a major impact on the regional economy. But a Torrance business spokesman said he regretted the delay.
“We are looking forward to those people filling the jobs here,” said Dan McClain, vice president and general manager of the Torrance Area Chamber of Commerce. “When they do come here, we are looking forward to the rebounding of the downtown area. . . . Everyone is eagerly awaiting Honda’s arrival.”
The delay will affect construction of a 14-story headquarters building for the Japanese car maker’s North American operations, an engineering building, a data processing center and a cafeteria. The total in construction costs amounts to $120 million.
Postponing the move also affects about half of what Honda intends to build on the 76-acre site, most of which used to be occupied by a U.S. Steel Co. plant. Honda’s project is north of Torrance Boulevard between Western and Van Ness avenues.
The delay is caused by difficulties in cleaning up soil contaminated by solvents and other toxic materials deposited by U.S. Steel and other companies that used the site, and by problems stemming from pockets of methane gas and other hydrocarbons, according to Torrance City Manager LeRoy Jackson.
“I’d say (the delay) is a little bit of slippage. It is not unreasonable,” said Jackson. “It seems to be more a matter of timing rather than a change in direction.”
Honda spokesmen were not available for comment.
The setback affects Torrance’s plans to redevelop the eastern edge of the city, formerly the site of the heavy industry that was the heart of the city economy when it was founded 75 years ago.
The delay was approved earlier this month by the City Council, acting as the Redevelopment Agency. In return, Honda agreed to increase a loan to the Redevelopment Agency from $8 million to $11 million, waived interest for one year on the additional $3 million and reduced interest on the overall loan from 10% to 7.5%.
Interim Financing
The loans provide interim financing for land acquisition, relocation and cleanup expenses. Long-term financing, which will be in place after construction is completed, will be provided by bonds repaid by the increase in property taxes caused by new construction.
In addition to enlarging its loan, Honda agreed to advance the city about $300,000 in construction taxes that would have been paid if Honda had adhered to its schedule. The tax is 1% of the construction costs.
Honda’s construction program was on time until the company, which recently reorganized its North American operations, requested the delay.
The first building finished and occupied was a 250,000-square-foot parts distribution warehouse that was completed in June, 1985. A research-and-development building, a regional center that is Honda’s headquarters for Western states and a service building were completed in the fall of 1986.
The city’s other major redevelopment project on its eastern edge is a $146-million complex consisting of a hotel, stores, industrial facilities and office buildings being built by Gascon Development of San Diego along Western Avenue south of Torrance Boulevard.
Two recently completed office buildings in the $36-million first phase have been finished on time.
