ANAHEIM : Pension Fund Under City Fire as Landlord

The pension fund that owns Anaheim Plaza has come under fire from City Council members, two of whom have suggested that the city engage in what would amount to a hostile takeover of the foundering shopping center.

While there is little chance that threats by Councilmen Tom Daly and Irv Pickler to condemn the property and wrest it from the State Teachers Retirement System would be passed by the council, other council members say they too are frustrated by the pension plan’s apparent unwillingness to make the mall the profitable shopping center it once was.

The retirement fund “is land-banking the property and they couldn’t care less if it serves the community or if it generates any sales tax revenue for the city,” Mayor Fred Hunter said. “What they have is a piece of land in central Orange County right next to (the Santa Ana) freeway, (which) is being expanded. And when they think the property’s value has increased enough, they are going to sell it. In the meantime, they don’t care if it sells anything or not.”

A spokeswoman for the retirement system in Sacramento said none of its officials were available for comment Monday.

Sales at Anaheim Plaza plummeted a few years after the retirement fund bought the property in 1984. In 1986 the plaza had its best year, with taxable sales of $84 million that generated about $800,000 in sales tax revenue for the city, according to the State Board of Equalization.

But in 1990, the last year for which figures are available, sales plunged to $51 million, a drop of almost 40% from 1986. That reduced sales tax revenue for the city to about $500,000, and the decreased income has raised tensions among council members.

“The mismanagement of the plaza by the pension fund has cost the city treasury millions of dollars,” Daly said. He added that there is growing sentiment among local residents for the council to use its eminent domain powers to condemn the plaza and force the pension system to sell it to the city, which would then sell it to another owner.

“The retirement board lacks any entrepreneurial spirit,” Daly said. “What we need is somebody to come in there who realizes that you have to spend money to make money.”

Pickler agreed. “I just get so aggravated that (the pension system) won’t get off the dime and do something with the property,” he said. “The plaza is a viable piece of property, and we need someone who will treat it as a viable piece of property.”

The council voted last year to place the plaza in a redevelopment zone, which allows the city’s Redevelopment Agency to assist financially and have a say in planning improvements.

Elisa Stipkovich, the agency’s director, said that before the city and the agency could consider condemning the property, they would have to give the pension system ample time to redevelop the plaza. If the redevelopment did not satisfy the city, the council could then vote to condemn the property, she said.

Four of the council’s five members would have to agree, however, and such a vote would probably fail. Hunter said he could not support the move because purchasing the plaza would cost the city more than $40 million. Councilman Bob D. Simpson questioned the move’s legality, and Councilman William D. Ehrle said he is opposed in principle to the council’s using its eminent domain powers except in extreme circumstances.

“The government’s ultimate power is to take someone’s property, and that should only be used for projects such as public transportation, schools and libraries, projects that have to go at a certain location,” Ehrle said. “I don’t think we should use it because we don’t like the way someone is doing business.”