New Developer May Acquire Key Commercial Property

A new developer has been found for a shopping complex viewed as key to the commercial revival of an area of North Hollywood, a Los Angeles Community Redevelopment Agency official said Monday.

Hughes Investments, a Newport Beach-based developer, is on the verge of acquiring the rights to build the long-awaited complex at Vineland Avenue and Magnolia Boulevard, which is to have a Ralphs supermarket as its anchor, said Jerry Belcher, CRA project chief in North Hollywood. The complex would put a supermarket within walking distance of the mixed-use community that the CRA seeks to nurture in the area.

The future of the project has been uncertain since it became apparent last year that the original developer, North Hollywood Partners, was having difficulty fulfilling the terms of its agreement with the CRA to develop the 5.2-acre site.

In November, the CRA had to lend $5 million toward purchase of the site after North Hollywood Partners failed to come up with the money. It also became apparent earlier this year that the group’s equity partner, Downey Savings & Loan, was “pulling out of the whole deal,” Belcher said.

Now, North Hollywood Partners is preparing to sell--with CRA approval--its CRA-bestowed right to develop the site to Hughes for an undisclosed price intended to cover North Hollywood Partners’ costs to date.

CRA officials “sure are happy we’re in there, ready to pull this off,” said David DePierro, a partner with Hughes, which owns and manages about 4 million square feet of large and small shopping centers, including ones in Garden Grove, Riverside and Downey.

With a financially sound developer, CRA hopes that it can quickly recoup the money it committed for land acquisition and get construction started. “Hughes seems to be solid, very conservative” and prepared to repay the $5 million, Belcher said.

Belcher and DePierro said the project will mirror the one proposed by North Hollywood Partners.

In addition to the supermarket, it will have an as-yet undisclosed chain restaurant and 30,000 square feet of retail space.

The project will be completed by November, 1992, DePierro predicted.

The developer will sell Ralphs the land for its supermarket for $2.6 million, a price tag set by the CRA and involving no markup in value, DePierro said. Hughes will profit on the sale of the restaurant site to a fast-food chain and on developing the remaining retail space, he said.

Belcher gave a Los Angeles City Council committee an update Monday on purchase of the 15 parcels at the site.

In an interview later, Belcher said the agency’s “best guess” is that the cost of the land will be about $6 million, about $1 million more than originally offered to the owners.