Deal Struck for Project on GM Site in Van Nuys

The site of the long-idled General Motors plant in Van Nuys, once a symbol of the region’s economic decline, will be reborn as a commercial development with retail stores, a theater, a police substation and an industrial complex, according to an agreement announced Monday by GM officials, city leaders and developers.

The developers can expect tax breaks similar to those offered to the DreamWorks SKG studio near Marina del Rey under a set of incentives recently outlined by the city’s Economic Development Incentive Task Force, according to city officials.

Although no tenants for the proposed development have been announced, sources say negotiations are underway with businessman and basketball star Earvin “Magic” Johnson to open a movie theater complex in the development.

The $100-million project, expected to create about 2,000 full-time jobs, will include 300,000 square feet of retail space along Van Nuys Boulevard and 520,000 square feet of light industrial space at the rear of the property. In the midst of the development, plans call for a 3,700-seat movie theater and a 24,000-square-foot Los Angeles Police Department substation employing about 100 patrol officers.

GM will retain 27 acres of the 100-acre facility for a vehicle emissions testing center.

Groundbreaking is expected this fall, with completion scheduled for the summer of 1997.

Once one of the San Fernando Valley’s largest employers, the GM plant and the economically depressed community that surrounds it have come to symbolize the downturn in the local economy since the plant closed its doors in 1992, putting 2,600 people out of work.

The development agreement, in the making for several months, is the result of a cooperative effort between a Woodland Hills-based partnership, GM and city officials.

Mayor Richard Riordan took a key role in the negotiations by assigning Rocky Delgadillo, one of his top staff members, to ensure the project’s success.

Selleck Properties of Woodland Hills, whose partners include actor Tom Selleck, his father and two brothers, teamed up with Voit Companies, the firm that developed much of Warner Center in Woodland Hills.

Selleck Properties is to develop the retail portion of the project, while Voit is to handle its industrial element.

Both developers declined to say how much they are paying for their 68-acre portion of the site, but a private brokerage firm previously appraised the entire 100-acre lot at $25 million.

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For their part, city officials have offered a package of incentives to make the project more appealing.

City Councilman Richard Alarcon, who represents the district in which the plant is located, said he met 20 times with the developer to make sure the deal would be made. The city has assigned a “case manager” to ensure that building permits for the project are not bogged down in City Hall red tape, he said. City officials also have vowed to use local and federal funds to improve streets and street lighting in the area.

In addition to city tax breaks, the GM property is within the so-called “revitalization zone,” a designation created after the 1992 riots to provide state tax breaks for businesses that employ local residents.

Because of gang and crime problems in surrounding neighborhoods, particularly in the Blythe Street neighborhood, the police substation is key for the development, Alarcon and the developers agreed.

Alarcon said the city has not committed the estimated $5 million to build the substation. But he said he will consider several funding options, including tapping money from an emergency redevelopment project established around the GM plant after the Northridge earthquake.

“The station is an important element because of the crime rate, particularly on Blythe Street,” Alarcon said.

Daniel F. Selleck said the police substation will be a selling point as his firm tries to attract tenants. Selleck said no tenant agreements have been signed but added that he envisions attracting several national chains.

The “open-air” retail development may include a department store, a toy store, a clothing outlet, restaurants and a home improvement store, he said.

The agreement signals the most optimistic development in the long-playing drama to make use of the plant that closed in August 1992, after producing 6.3 million cars over 45 years.

GM shuttered the aging plant and moved its manufacturing to Canada in part because of the lower cost of shipping parts from Midwest suppliers.

For more than a year, GM officials said they tried to sell the land with the auto manufacturing plant intact but found few firms interested in using the aging facility.

Over the years, politicians and community leaders have proposed using the property to build electric cars and other low-emission vehicles.

Alarcon originally said he would not support a project that would compete with the nearby Panorama Mall and other area retail stores already struggling to stay in business.

On Monday, he said he still is concerned about the competition but hopes no retail tenants will be lured that would directly compete with other area malls.

Voit and Selleck were among four developers who began negotiating about a year ago with GM and city officials on the project. Although Voit and Selleck did not make the highest offer for the land, Claudia Killeen, project manager for GM, said they were selected because of their track record.