Azusa OKs $6-Million Complex : Officials Hope Project Will Help Downtown Revitalization
The city has approved a $6-million commercial and office complex on 3 1/2 acres on Azusa Avenue that officials hope will bring a much-needed boost toward revitalizing downtown.
Acting as both the City Council and Redevelopment Agency board, council members Monday unanimously approved the “Centennial Square” project with De Rosa Properties. The project will add 51,000 square feet of commercial space at the intersection of Azusa Avenue and Foothill Boulevard. De Rosa, based in Bel-Air, has completed two smaller retail projects in Azusa.
For several years, the city has solicited developers to build a commercial project, but each has declined, citing the uncertain prospects of attracting tenants, said Redevelopment Director Robb Steel. De Rosa, Steel said, is willing to build the project and then gamble on attracting tenants.
The Redevelopment Agency has pledged to spend $4 million to acquire land, relocate existing businesses and make necessary improvements to the property. Plans call for the property to be sold to the developer for $1 million. City officials downplayed the significance of a penalty clause requiring the agency to pay De Rosa $100,000 if significant progress toward turning over the site has not been made within six months of the developer obtaining a $1-million letter of credit for construction.
‘Incentive for Us’
“It’s not the first time we’ve gambled and won,” City Administrator Julio J. Fuentes said. “It’s incentive for us to cut the deal and make it work.”
In financing the project, the agency will use a $1-million loan from the city’s light and water reserve fund and $1.2 million in Redevelopment Agency funds. Crucial to the deal is a $1.8-million loan from the U.S. Department of Housing and Urban Development, for which the city will forgo future community development block grants, Steel said.
“Basically, you borrow against future entitlements,” Steel said. The loan program “was designed to help city redevelopment agencies,” he said.
Officials said the city has alternative plans if the loan is denied but anticipate an approval after filing an application with the federal government.
Steel said the agency owns about 40% of the businesses on the site and anticipates no problems in acquiring the rest.
Estimates are that the project could bring in annual sales taxes of about $50,000 and property taxes of about $65,000.
Steel said city officials hope the Centennial Square project, combined with a 141-unit luxury apartment complex under way and a rehabilitation program for building facades on Azusa Avenue, will motivate developers to begin projects in downtown.
