ENCINO : Crater Site Developer Backs Out of Deal

At the eleventh hour, a developer of a site known among its Encino neighbors as “Lake Hayvenhurst” has backed out of a deal that would have replaced the mammoth 3-year-old crater with a new supermarket and a drugstore.

Developer Rick Caruso of Caruso Affiliated Holdings said it was not his choice.

“We want to develop the site,” Caruso said. “But recent circumstances have emerged that we feel make that not possible.”

Caruso said the owner of the property, Imperial Bank, at the last minute accepted an offer from another developer willing to purchase and develop the site at Ventura Boulevard and Hayvenhurst Avenue. That developer, he said, is willing to sign a deal before the project is approved by the city--a risk that Caruso said he was not willing to take.

“We wanted to make sure that we could develop the project we presented to the neighbors,” he said. “You could pump a hell of a lot of money into that hole in the ground and end up not being able to do anything with it.”

The hole was originally dug in 1990 when the state required a previous developer to remove contaminated soil from the site, which had held a gas station with a leaking, underground gas tank. Imperial Bank foreclosed on the property when the developer declared bankruptcy last year.

David Blitz, a senior bank vice president, said through his secretary Wednesday that he would not be available for comment on the deal. Local homeowners, who had fought several earlier attempts to develop the site but supported Caruso’s bid to build the supermarket and grocery store, said they are concerned that he has apparently been aced out of the deal.

“All bets are off,” said Robert Glushon of the Encino Property Owners Assn. “This leaves open the possibility for a developer whose plans may be much more grandiose.”

Gerald Silver, president of the Encino Homeowners Assn., agreed.

“Frankly, if we don’t like it (the next project), we’re going to fight even what the plan allows,” Silver said, referring to the Ventura Boulevard Specific Plan which governs development along the 17-mile strip. “The bank is headed for a lot of trouble if they don’t come to grips quickly with something the community can support.”