Long-Stagnant Industrial Park Rushing to Life in Wilmington

What stands between Ed Dool and a building he proposes for the Wilmington Industrial Park is this: a 60-by-160-foot patch of land piled high with somebody else’s stuff.

The owner of the tiny parcel--which sits squarely between two larger lots Dool wants to connect as a new home for his auto body shop--won’t sell.

Dool gestured toward the fenced-in lot, littered with old furniture, scrap metal, plywood boards and the like. “My main building is set right on here. . . . “ he complained. “The whole industrial park is being held hostage by property owners like this that will not sell.”

That may be overstating things; Dool acknowledges he is negotiating with the owner over a fair price for the land, and his offer--between $6.50 and $9 a square foot--is low by some estimates.

But his situation does illustrate a story that is unfolding at the 232-acre park, designated as a redevelopment area by the city of Los Angeles 14 years ago as a means to cure blight, promote industry and bring jobs to Wilmington.

City officials had hoped to use that designation to turn what was a vast stretch of junkyards and weed-covered lots--roughly bounded by Broad Avenue and Anaheim, Alameda and B streets--into a tidy industrial complex where clean manufacturing companies could do business. The park’s status as a redevelopment area means the City Redevelopment Agency, which manages the park, can use its powers of eminent domain to claim land when--as could happen in Dool’s case--negotiations between owners and prospective developers don’t work out. In addition, tax money generated from new businesses and buildings in the redevelopment area may be used for improvements there.

For years, development came in dribs and drabs. A smattering of businesses moved in: an independent oil company, a cable television business, a food processing firm, a heating and air-conditioning business, among others.

But in recent months, the park has been abuzz. Five major projects, worth more than $7 million, are under construction. Another five, including Dool’s, are proposed, and still another six are being negotiated by developers and the redevelopment agency. Attractive land prices and a prime location near the Port of Los Angeles are drawing businesses from other communities. And, according to those who do business in the park, real estate signs are casting shadows over its vacant lots for the first time in recent memory.

Behind-the-Scenes Work

Jerry Grimaldi, the agency’s administrator at the park, is pleased with the recent wave of progress, which he said is the result of years of behind-the-scenes work. “I feel great,” he said.

Grimaldi said developers, investors and banks who once were unwilling to put their money in the park seem to feel better about doing so these days, especially given the higher cost of land zoned for manufacturing in surrounding communities such as Torrance and Carson.

“A critical mass is beginning to form,” he said in a recent interview. “Nobody wants to be the first, but now . . . when someone comes in they don’t feel like they’re the pioneer.”

But the piece of land blocking Dool’s development is symbolic of the other side of the story. It is just one of what the redevelopment agency says are “many impediments to development”--most of which are beyond the city’s control--that the Wilmington Industrial Park has faced since its inception:

The park sits on the Wilmington Oil Field. It remains dotted with 101 working wells, and although oil companies do not own the land, they still have surface rights to much of it, meaning that even the owners can’t build there without the companies’ permission. Thus, it is common to see buildings at the park designed in odd shapes, around oil wells--the result of frequent negotiations involving developers, the redevelopment agency and Exxon Corp., which manages the oil field.

Grimaldi said the agency has a “working relationship” with Exxon, and one developer said he found company officials amenable to giving up their surface rights, so long as it did not interfere with operation of their wells. But another--Dool--took Exxon to court in an attempt to win the surface rights and force the company to abandon a well. The two sides negotiated a settlement that permits Dool to put up his building and the company to keep using the well. “Even in those situations where we’ve been sued,” said Exxon spokesman Brian Dunphy, “we’ve tried to be reasonable and work with the developers.”

More than half a century ago, when the land was discovered to be laden with oil, many people bought tiny parcels hoping to strike it rich. That translates into headaches for developers, who often must acquire as many as eight or 10 of those parcels, bit by bit, to make one lot big enough for an industrial building.

Negotiations to buy the small lots are often complicated. Often, the property has been passed down to descendants who may be scattered across the country and difficult to track down. Sometimes it is tied up in trusts. And real estate technicalities frequently crop up, such as titles that are clouded by complex agreements between the previous owners and the oil companies. Finally, if an owner refuses to sell, the redevelopment agency may claim the land through eminent domain, but that is cumbersome and time-consuming.

Railroad companies have tracks running through the park, and easements to some of the land. One of the park’s streets, McFarland Avenue, has tracks running down its middle, and the redevelopment agency has sought to have the road closed to cars. Grimaldi described another instance in which the agency persuaded a railroad company to relinquish its easement so a developer could have access to a corner of his property, only to discover that the rights to the land reverted to a previous property owner when the railroad gave up its claim.

Decades ago, when portions of Los Angeles Harbor were deepened, the “spoils”--loose, marshy fill that was dredged from the waterfront--were dumped on what is now the industrial park. As a result, the land at the park is too unstable to support large industrial buildings. Before beginning construction, the city requires developers to dig up the unstable soil and either replace it with new dirt or dry it, recompact it and put it back.

This takes time and money. For Komax Systems, which plans to move from Long Beach to the industrial park, it meant a one-year delay and a $400,000 cost overrun. Company Vice President Dick Carlson said that even after testing, Komax had no idea about the soil problems until city inspectors put a halt to construction. Workers eventually had to remove “the equivalent of two football fields, 12 feet deep. . . . That was a complete shock and very costly.”

Many of the streets in the project are actually “paper streets,” which, although designated as roads, have never been paved and are difficult to drive on. In the park’s 1987-88 annual report, Grimaldi wrote that “the inadequate street system has provided little impetus for private development.” In some cases, the redevelopment agency has asked the City Council to vacate--or wipe off the map--those streets so they may be incorporated into new developments. That generally takes between six and nine months, according to those familiar with the process.

For years, vacant lots at the park--and the unimproved streets in particular--were a vast illegal dumping ground for trash and abandoned cars, which discouraged prospective tenants and developers. The Grimaldi report said the streets “had in some instances become impassable as well as a definite health hazard.” Three years ago, the tenants and owners organized and demanded a cleanup. Some of the trash piles were 10 feet high.

Much of the debris has since been cleared, and private security guards--paid for by the tenants and owners--now patrol the park. Still, the park is plagued by its image as a dump. “We’re constantly calling the Police Department to report abandoned and illegally parked vehicles,” said Ed Kaveny of Metropolitan Stevedore Co., which is building offices and maintenance facilities at the park. “People just drive down the street and throw things out of their trucks and keep going.”

Working through the redevelopment agency can be time-consuming and bureaucratic, some developers report. The agency has the right, among other things, to approve architectural and landscaping plans, financing arrangements and what type of businesses may rent space in the park. This is intended to ensure clean, attractive developments. But the red tape can create delays that are costly, said Bob Wolfenden, a developer and contractor who has built elsewhere in Wilmington and is negotiating to build in the park. “It’s bad for the small guy like myself,” he said. “I can’t afford to go in there and put up a lot of money and let it sit.”

23 Buildings in Park

Despite those drawbacks, 23 industrial buildings are already up at the park. The city is now pushing to have the park--along with much of the rest of Wilmington--declared a state enterprise zone, which could bring in additional business by providing tax incentives.

And all the developers interviewed agreed that the park’s pluses clearly outweigh its minuses.

Chief among the pluses is the cost of land, which Grimaldi said is about $9.50 a square foot, up from about $7.50 or $8 a square foot a year ago. Dool, who intends to build a 23,000-square-foot building and lease the portion he does not use, said property costs are nearly twice as high in Torrance and Carson.

“For people looking for land to build an industrial building it is still a very good area,” said Carlson of Komax Systems. “We looked in Compton, we looked in Long Beach, we looked in Harbor City and this was attractive to us price-wise.”

Carlson said his company first began negotiating with the redevelopment agency in mid-1986, took title to its land in September, 1987 and hopes to move into its new building this fall. In addition to the soil problems, he faced delays in negotiating with the oil companies and in having an unimproved street vacated.

“With all my problems and my gray hair that I got out of it, I still think good buys could be made down there,” he said.

Close to Port

Aside from good buys, a compelling attraction is the park’s proximity to the Port of Los Angeles; its southern boundary is just across the street from the waterfront.

Wolfenden, the developer who has built several projects outside the park boundary, recently purchased land inside the park and said he is betting it will boom the same way the land surrounding Los Angeles International Airport has.

“I grew up around Westchester-Playa del Rey and I know what the property did around the L.A. Airport. . . . Geez, if a guy would have had any brains at all he would have bought that back when he could have and he’d be on Easy Street right now,” Wolfenden said.

Wolfenden said he has developed property in San Pedro and Harbor City for years, but largely ignored Wilmington until recently. “I feel rather stupid,” he said. “I didn’t realize that I was sitting next door to a potential gold mine.”

Dool, the auto body shop owner, put it this way:

“Anything that’s worth anything takes a lot of time and a lot of hassle. But this here’s a step to make me a millionaire.”