Investors Say Indictments Will Have No Effect on Plans for Mall in Carson
Investors hoping to build a “mega-mall” in Carson are trying to assure city officials that the indictment of two Orange County businessmen involved in the project will not hamper their plans.
The investors, Carson Realty Projects, hope to build a giant shopping and entertainment center on the former Cal Compact landfill near the San Diego and Harbor freeway interchange if tests prove that the 157-acre property is not too polluted to develop.
Robert A. Ferrante, the owner of the land, and Peter A. Sardagna, the project manager, were indicted by a federal grand jury Feb. 14 in connection with the 1986 collapse of Consolidated Savings Bank of Irvine. They have pleaded not guilty.
Now, a pension fund that is the main player in Carson Realty is telling Carson officials that it plans to move forward despite Ferrante and Sardagna’s legal plight.
“They (Carson officials) have to know that this is not going to be abandoned,” said William Seay, administrator of the Southern California and Arizona Glaziers, Architectural Metal and Glass Workers Pension Fund. “I gave them a pledge, and I will live up to it.”
The assurances have drawn mixed reviews from Carson officials. The city has seen the demise of countless grandiose plans for the property--one of the Los Angeles area’s largest vacant tracts with potential for intensive development.
Mayor Vera Robles DeWitt and Councilwoman Sylvia Muise say that if the project advances to the point that city approval--or even participation--is requested, the city should give it careful consideration.
Carson, they point out, sorely needs the sales tax revenues that would flow from businesses on the property, which was used as a landfill by Cal Compact Inc. until the mid-1960s and is now designated as a city redevelopment area. More than half of the city’s $29-million operating budget comes from sales tax money.
“It’s a pension fund, which I’m sure has lots of money,” DeWitt said Thursday. “I would keep an open mind. I can’t prejudge a project.”
Muise said it should be remembered that Ferrante and Sardagna have not been convicted. And even if they are, she said, “Ferrante and Sardagna don’t necessarily mean the glaziers union. We shouldn’t paint them all with the same stroke.”
But Councilman Michael Mitoma says he would take a dim view of the investment group’s plans, particularly if the city is asked to provide financial assistance through its redevelopment agency.
“In my mind, it’s dead,” Mitoma said Thursday. “The glaziers union was brought into the picture by Ferrante and his group, and I don’t feel very comfortable with this ‘trust me’ business. . . . My concern is that Ferrante et al are in the background still managing this project.”
Ferrante, who is from Newport Beach, and Sardagna, of Laguna Hills, were among nine men indicted by a federal grand jury in Los Angeles last month in connection with the Consolidated Savings failure. Ferrante, 41, is the former owner of the thrift, and Sardagna, 47, is a business partner of Ferrante.
The nine men were charged with 31 counts of fraud in the collapse, which is expected to cost taxpayers $30 million.
The case does not mark the first time that controversy has overshadowed development plans for the Cal Compact site.
Former Carson Councilman Walter J. (Jake) Egan was convicted in 1986 on charges that he demanded money from W. Patrick Moriarty in return for favoring the Orange County businessman’s plan to build a mobile home park on the land. Egan served nine months in the federal prison at Terminal Island.
Over the years, ill-fated plans for the property have included mobile home parks, high-rise hotel and office complexes, automobile dealerships, and football stadiums--first for the Rams, then for the Raiders.
The current development effort stems from a reorganization plan approved in U.S. Bankruptcy Court in November, 1989, to satisfy creditors of World Industrial Center Ltd., a limited partnership controlled by Ferrante.
Under the plan, the dump site would be purchased for $47 million by Carson Realty Projects, a corporation controlled by the pension fund.
The purchase is subject to several conditions. Among them are provisos that the cost of cleaning up the property shall not exceed $25 million and that the buyer must wind up with at least 3.5 million square feet of usable space--more than the Del Amo Mall.
The property is being tested for pollutants, at the expense of Carson Realty Projects. State health officials will not allow the site to be developed until the $1.5-million testing program is complete and cleanup work is performed, a process that could take years.
Brian Lysaght, Ferrante’s attorney, says there is no way the deal could become mired in the legal problems facing his client and Sardagna. A civil suit filed against Consolidated Savings insiders held the potential for such trouble, he said, but that case was settled with federal thrift regulators in December.
“This entire project is under the control of the bankruptcy court and the U.S. government,” Lysaght said. “If it’s OK with the government and OK with the bankruptcy court, it should be OK with the city of Carson.”
Seay, meanwhile, acknowledges that the dump site development effort has been guided to a significant extent by Ferrante--who holds a 5% stake in the project--and Sardagna, who has appeared several times before Carson officials as project manager.
But the pair’s involvement is being curtailed, he says, so the project doesn’t suffer as they concentrate on defending themselves in the federal fraud case.
“We’re in the baton-passing stage, of taking the baton from Ferrante and Sardagna,” Seay said. “ . . . I have to be certain that there is no way our pension fund and the project can be impacted with their difficulties.”
For Carson officials, crunch time won’t come until testing of the site is completed, cleanup plans are laid, and a development strategy is submitted for the city’s consideration.
Said Mayor DeWitt: “Until it’s before us, it’s not our business.”
