Renewal Project to Get Boost : Redevelopment: Monterey Park prepares to invest another $5 million in Atlantic Square. Consultants see little profit for 30 years.

Already embroiled in a property dispute that will delay completion of the Atlantic Square Shopping Center project for at least a year, the City Council is preparing to sink $5 million more into the redevelopment deal.

And although city officials say the new, revamped Mediterranean-style mall at South Atlantic Boulevard and Floral Drive will give residents an attractive place to shop, they concede that the benefits of increased tax revenue will be long delayed.

“It will take many, many, many years for it to pay for itself,” City Councilwoman Marie T. Purvis said. “At least residents will have the convenience of shopping in their own city. It would be foolish to back down at this point.”

Because of tighter lending policies due to the savings and loan crisis, the city and its partner in the project, Champion Development Inc. of Long Beach, will have to put up as much as $8 million more than the original $27-million price tag, said Keith Breskin, the city’s director of economic development.

Champion, which was originally to put up $15 million for the project, has agreed to pay $18 million. Monterey Park officials must decide whether to make up the difference, which could be as much as $17 million, Breskin said. The city originally planned to spend $11.6 million on the project.

Although officials thought they could finish the project by Thanksgiving, construction has not begun, mainly because of a dispute over how much the city Redevelopment Agency should pay the mall’s current owner, Milton Bilak.

A court hearing is set for Jan. 7, 1991, to determine the value of the land. Breskin said that if all goes well, the developer will break ground next spring.

Meanwhile, a consultant’s report released last week shows that Monterey Park stands to make little, if any, net profit during the first 30 years the new Atlantic Square operates.

By 2022, the city will have made about $100,000 profit on the project in 1990 dollars, according to a study by Kotin, Regan & Mouchly Inc. of West Los Angeles.

The consulting firm said total revenue to the city over the 30 years from sales taxes, property tax increments under redevelopment law and other sources will be $73.2 million, without allowing for inflation.

But the effects of inflation will be considerable, the report said. For example, after 30 years the city will have received a total of $16 million in sales taxes from the mall, but that will be only $3.4 million in 1990 dollars.

“We’ve never said this was a great business decision for a private entity to make,” Breskin said. “But this is a city. We don’t do redevelopment to make money. We’ve got to do things that benefit the populace. If we don’t rejuvenate (Atlantic Square) . . . we’ll have a huge black hole in the city.”

Mayor Judy Chu agreed. “It’s not made to be a wildly successful financial thing; that we knew coming into it,” she said.

But if the city abandons Atlantic Square and allows it to decline further, Chu said, the city’s business outlook would be dim. Monterey Park’s per-capita sales tax revenue is among the lowest in the San Gabriel Valley, and rebuilding Atlantic Square, which has lost a number of restaurants, department stores and groceries, is seen as a key to boost the area.

The outlook for Atlantic Square has left one councilman doubting that the city’s projected benefits outweigh the risk.

“We are going to be saddled in heavy debt,” said Councilman Samuel Kiang, who cast the lone vote against tentative approval of the new financing agreement in a closed session last week. “We will not recoup the costs. We will never recoup the entire investment.”