HUD Grant Fills Fund Gap for Franciscan Promenade Shopping Mall

The former Franciscan Pottery plant will be converted into a major commercial center in Atwater with help from a $4.2-million federal Department of Housing and Urban Development grant awarded the city of Los Angeles, city officials said Tuesday.

The grant to the city’s Community Development Department will help finance an $82 million, 30-store shopping arcade planned by Los Angeles-based Schurgin Development Co. The city is coordinating development of the project, expected to create more than 1,500 jobs and to generate more than $2 million a year in sales and property taxes.

The federal grant closes the last gap in $13 million in public money needed for the development. The remainder will come from the developer and bank financing.

“If that last piece, the $4.2 million, hadn’t dropped into place, there would have been no project,” said Parker Anderson, director of industrial and commercial development for the Community Development Department.

The 45-acre former factory site, near the Glendale boundary on Los Feliz Boulevard, is one of the largest parcels available for development in Northeast Los Angeles. But Schurgin’s plans for the property have been stalled since 1984, when the parcel was identified by the state as a hazardous waste site.

Development of the site has been controversial, with community groups charging that a large shopping center in the area would create intolerable traffic levels and edge out smaller area businesses owned by Atwater residents.

But now Atwater Homeowner Assn. President Ed Waite said he will support the Schurgin plan.

“We will cooperate with the developer and the council because there’s no way I could have it stopped,” Waite said. “But we do not believe the traffic can ever really be successfully mitigated.”

Last year, Schurgin began a $3-million cleanup of the site, which is contaminated with lead-tainted ceramic sludge and pottery chips from almost 80 years of producing dinnerware. The HUD money will partly pay for that cleanup, but the funding is not earmarked specifically to assist in the cleanup, city officials said.

Now that city officials say the project has passed all necessary environmental reviews, Schurgin representatives hope to close escrow on the property this month. Since 1986, the development company has been negotiating with Wedgewood, a British firm, to purchase the site.

For 100 years--from 1880 to 1980--the site was the home of the Franciscan Pottery plant, famous for its production of quality china and pottery and one of the largest tile manufacturers in the country. Wedgewood purchased the plant in 1980 and manufactured the Franciscan line until 1982 when the firm went out of business.

The planned shopping center, to be called the Franciscan Promenade, will include a major home improvement store, supermarket, a theater, restaurants and specialty shops, said a spokesman for Councilman John Ferraro, who announced the HUD grant.

Schurgin has built 60 projects in 11 states, including centers near the Puente Hills Mall and the Central City Mall in San Bernadino, a company spokesman said. The Atwater development, on which construction is expected to begin in February, 1989, would be the company’s largest undertaking.