A $47-million refinancing of the Galleria at South Bay proposed by the developer, Southbay Associates, will be considered by the Lawndale City Council at a special meeting at 7 p.m. Tuesday.
The City of Lawndale participated in the funding of the mall in Redondo Beach by obtaining an $8-million federal development grant that would have been unavailable to Redondo because of its higher-income population. In exchange for providing the $8 million toward the renovation of the center, which opened in 1985, Lawndale holds a second-trust deed on the project and must approve the proposed refinancing.
Refinancing the original $45.5-million loan would entail $1.5 million in processing costs, bringing the new loan with Mitsubishi Bank to $47 million. But because of a lower interest rate, a savings of $200,000 a year would be achieved, according to the developer. This would make it more likely that the city would receive a share of the mall’s profits, as provided for in agreements governing the Galleria project, City Atty. David J. Aleshire said. He added that until now, because of high expenses, the city has received no return of profits. The agreements were drawn up among Redondo Beach, Lawndale, the Galleria developers, the U.S. government and lenders.
The council asked Aleshire to make a further analysis of the proposal for its consideration Tuesday. Representatives of Southbay Associates said they need council approval within the next few days because their loan commitment from Mitsubishi expires Friday.