GARDEN GROVE : Deal Clears Way for Business Center

City officials have cleared the way for the 118,000-square-foot Smith Food & Drug Centers Inc. business complex to locate in the city after settling a dispute over construction workers’ wages that had stalled the project.

In last week’s settlement with the developers, Tratel Centers, the city agreed to allow the company to pay 75% of its construction labor costs at union scale. City law generally requires a developer to pay all of its construction orkers at the current wage scale.

In addition, the city will receive about $263,000 a year in sales taxes and $184,000 in tax increment revenue when the entire project is completed next spring, officials said.

The business center, on Harbor Boulevard south of Garden Grove Boulevard, is expected to create 400 jobs.

City officials had planned to discuss removing the wage provision altogether. But that proved unnecessary when local union representatives came out in support of the plan despite criticizing it earlier.

“Smith Food & Drug is a good union employer,” said Rick Eiden, a special representative for United Food Commercial Workers 324 of Buena Park. “It will provide over 200 new jobs (retail and food workers after the center is constructed) and pay some of the highest union pay and benefits.”

The business center also is planned to include a food court, drugstore, photo-processing center, 10,000-square-foot video center and a discount office supply business.

“This involves hundreds of thousands of dollars in benefits to the community,” Councilman Frank Kessler said. “If we had this a year ago, we wouldn’t be laying off cops and firemen that we will be doing very shortly.”

Councilman Robert F. Dinsen, who cast the only no vote against the project, complained that the city is paying out subsidies in excess of $2.5 million.

“The bulk of the sales tax will be taken away from other stores in the city. The amount of new revenue will be minor. It’s a poor deal,” he said.