Bank Buys Half of Hughes Land : Business: Deal to move Coast Federal into vacant facility was brokered by a nonprofit group created by the mayor.
Mayor Richard Riordan on Tuesday announced the sale of 40 acres of the closed Hughes Aircraft Co. research facility to Coast Federal Bank in an unusual transaction that was brokered by a nonprofit corporation created by Riordan to assist local business.
Coast, which has been seeking larger quarters for its 700 workers, will use about half of the 843,000 square feet of office space at the former Hughes plant in Canoga Park, which was shuttered in October when the aerospace company transferred its staff to Tucson.
In the transaction, Hughes gets a tax credit for selling the property below market price to the Valley Job Recovery Corp., a nonprofit group the mayor created in August to help retain local business. That corporation, in turn, sold half the land to Coast, which had considered leaving the city.
In addition, the city will receive a five-acre park at the entrance to the former Hughes facility on Roscoe Boulevard.
Ray Martin, Coast’s chief executive officer, called the deal a “win-win agreement for our company, the surrounding community and the city.”
The cost of the sprawling 86-acre Hughes property, formerly a missile research and development facility, was not disclosed but Riordan aide Rocky Delgadillo said it was below the site’s estimated $10-million to $14-million market value.
Riordan said the nonprofit corporation, which operates outside city government, is currently in negotiations with at least two other companies to buy the remaining space.
In a short speech Tuesday, Riordan credited the Valley Job Recovery Corp. with “bringing life back to a property that has been vacant since October.” Keeping Coast Federal Bank in the Valley will save about 750 local jobs, he added.
“This site was in jeopardy of becoming a statistic of the economic downturn, and it will be, but a good one,” said Riordan, speaking to a group of city officials and Coast administrators who toured the facility after final documents were signed.
By completing its first successful deal, the organization has shown it can boost business in the city, said Benjamin Reznik, a San Fernando Valley attorney who is chairman of the VJRC’s board of directors.
“If the city were to create the nonprofit, then you would have to go through city bureaucracy, and that could take years,” Reznik said. “This way, it moves much faster. If we have to hold a quick meeting, we’re available. If we need documents signed, we’re ready.”
John Rooney, president of the Valley Economic Development Center, said other cities have used independent nonprofit corporations to attract and retain businesses.
“It’s a super tool that you are going to see a lot more of in Los Angeles,” Rooney said.
City Councilman Hal Bernson and other Valley council members have been kept informed of the corporation’s projects, which includes negotiations with General Motors officials about its defunct Van Nuys auto assembly plant. The VJRC hopes to purchase the facility and transform it into an industrial park, Reznik said.
Reznik declined to provide details about the negotiations with GM officials but said he hopes to have a deal worked out early next year.
City officials said the city will help expedite the permit process for Coast, allowing the bank to begin relocating to the Canoga Park site by early April.
Meanwhile, some Granada Hills residents said they are worried that the Coast building on Chatsworth Street will be replaced with a commercial building that will bring traffic and congestion to the neighborhood.
