Palmdale’s Growth Leaves Downtown Behind : Development: In search of more customers and to escape crime, businesses move to newer parts of the city while the center withers.

From her first day in Palmdale three years ago, American Savings Bank Vice President Sharon Siglar began telling her superiors that they needed to move her branch out of its downtown site several blocks from City Hall.

Just across from the bank that day, Siglar recalled, she saw a drug user collapse from an overdose and die. And in the years since, she said, conditions in the area have continued to deteriorate: drug deals, assaults at the automated teller machine, transients and more.

So in January, after 22 years in downtown Palmdale, the branch will move to a shopping center in a newer area about a mile east. Standing in her soon-to-be-vacant building, Siglar said: “A few years ago, this was the town. Now it’s all moved away.”

In some ways, downtown Palmdale has become a victim of the city’s successes. While Palmdale has been bursting outward as one of California’s fastest-growing cities over the past decade, the old heart of the city has been withering as businesses move to the outskirts, leaving behind what one developer called a ghost town.

Some say the deterioration simply mirrors the decline of downtowns across the country. Some say it reflects changing traffic patterns. Others believe that it is the result of city actions, which have promoted growth along the Antelope Valley Freeway at the expense of downtown.

In the latest example of business flight, K mart plans to close its 12-year-old Palmdale Boulevard store--east of downtown--to make way for two new and larger facilities: one west of the freeway on Avenue P, and another on the far east side of the city at Avenue S and 47th Street East.

Developers and business owners say it is often difficult to expand in old and cramped buildings in the downtown area, which business owners complain has been plagued with crime, frightening away customers. And, they say, businesses want to be in growing outlying areas where new houses mean more residents and customers.

What remains in the downtown area is City Hall, at Palmdale Boulevard and Sierra Highway, surrounded mostly by old apartments and houses, dilapidated shops, vacant buildings and empty lots. And with the economy slumping, any major relief appears distant.

“The growth is moving to the south and east and to the northwest of downtown Palmdale,” said Austin Bettar, who represents many area shopping centers for the Charles Dunn Co./ONCOR International in Encino. “People also feel downtown Palmdale has decayed quite a bit.”

“I don’t think it’s a ghost town,” Palmdale City Administrator Bob Toone countered. He conceded that some areas of downtown look run-down and are going through a transition. But Toone maintains that the city has been working on the area and has plans for the future.

Palmdale officials hope to revitalize downtown with a major new Civic Center complex. That costly project could take several decades to complete, Toone said, but the city is moving on other fronts as well.

Palmdale in the spring plans to open a $2-million community youth center where a toy store went out of business last year in the Palmdale Plaza, the city’s oldest shopping center. A $25-million recreation center near City Hall is also planned.

But the losses continue to mount.

The best example is that same shopping center, the Palmdale Plaza on Sierra Highway two blocks north of City Hall. Although it was state-of-the-merchandising-art upon its opening in the late 1950s, the center now is seedy with many vacant stores and other businesses leaving.

The J. C. Penney there, dating to 1958, moved to the city-subsidized Antelope Valley Mall, a 750,000-square-foot center that opened west of the freeway along Avenue P in September, 1990. More than a year later, the old Penney’s is still vacant.

Another Palmdale Plaza tenant dating to the 1950s, Woolworth’s, is closing as well. Employees there, such as assistant manager Jennie Lendway, said they will soon be out of jobs. But a company official said a new site is being sought. A Palmdale city official said the store may relocate near the mall.

Security Pacific National Bank in Palmdale also is in the Palmdale Plaza. Given Security Pacific’s planned merger with Bank of America, which has a branch nearby, some locals figure that the Security Pacific branch will soon go. Others think that both branches will close in favor of a new site near the mall.

Just down the block is Siglar’s American Savings Bank branch, where she says customers are afraid to come after dark. Area business owners complain of rampant drug activity, transients, homeless people and even a prostitute who used to ply her trade openly in front of the shopping center.

Across from the bank are two boarded-up buildings that used to house stores. And nearby is a tumbleweed-covered lot that housed a supermarket until the store relocated to a site near the freeway many years ago. The empty building burned down, and the lot has been vacant ever since.

City officials say they don’t believe that the new regional mall along the freeway has harmed downtown. They also say the recession may be contributing to the area’s problems. But the recession doesn’t appear to be stopping new development in other, more attractive areas of the city.

South of downtown along Avenue S, a major east-west artery, three supermarket-type shopping centers have sprung up during the past year where none had existed before. And at least two more, including the planned K mart center on Avenue S, are in the offing.

North of downtown is a 1 1/2-mile stretch of land along the Antelope Valley Freeway south of Avenue P that was vacant two years ago and now is home to the regional shopping mall, an auto mall that is under construction and two major new shopping centers.

By focusing on the freeway corridor, Bettar said, “the city indeed has caused some of these problems” downtown. And barring some major intervention by the city, he predicted that it could be 10 years until Palmdale grows enough to create demand for businesses to return downtown.

To some extent, the movement away from downtown dates to the mid-1960s when the state Department of Transportation opened the Antelope Valley Freeway through Lancaster and Palmdale. That left Sierra Highway--which had been the downtown’s main north-south artery for years--running through downtown as a secondary street.

Palmdale officials say developers, not the city, decide where they will build, downtown or elsewhere. But the city also has had a role. For example, hoping to wrest lucrative projects and their sales tax money from rival Lancaster, Palmdale has subsidized the auto and shopping malls.

Ringing the downtown area are many run-down apartment buildings and ramshackle houses, some of the latter without curbs and sidewalks around them. The city has not offered redevelopment grants or loans to improve those conditions, but Toone said the city plans to start such a program.

And last year, when it had to pick a site for the city’s $4-million, 400-seat theater, the City Council chose to build a facility on a donated site along the freeway rather than sticking to its long-held plans to renovate the boarded-up Maryott Auditorium that the city owns downtown.

The planned relocation of K mart is another example. K mart officials said they believed that they had to make a move to compete after much bigger Target and Wal-Mart stores opened in the two new shopping centers near the regional mall.

K mart Regional Manager Bob Benson said the company’s Palmdale Boulevard store looks “old and tired” compared to its rivals along the freeway. And store manager Mark Oppliger said the mall area has become “a place, a meeting place to go” for residents.

K mart officials said their new east-side store may open by late next year. Plans for the west-side site are not as advanced and the site could be developed as a K mart or another kind of store belonging to a sister company, officials said. The existing store will not close until a new one opens.

One Antelope Valley developer said Palmdale has hurt itself by permitting too many shopping centers on the outskirts of the city.

“It hurts the downtown areas,” said the developer, who requested anonymity. But he said he and others will keep building the centers as long as the city permits them.

Business owners also see advantages. Crystal Kelsea and her husband operated a video store in a shopping center at Avenue R and 25th Street East, southeast of downtown, until the Lucky supermarket there closed late last year, followed by most of the smaller stores.

Lucky this year opened two stores in new centers farther out on Avenue S at 25th Street East and 47th Street East, where many homes were being built. A Lucky spokesman said the company needed a larger store and wanted to move closer to growing areas. The old store remains vacant.

Kelsea said the old location was “dark and dingy,” plagued by drug dealers and customers who lacked credit cards as security for renting videos. But at the new store, business is up and credit cards aren’t a problem.

“You can’t expect to have good business in a bad area,” she said.