San Fernando Hires Shopping Center Developer

Hoping to jump-start development in its downtown corridor, the city of San Fernando has signed an exclusive agreement with the Los Angeles-based Zelman Cos. to create a 12-acre shopping center anchored by a big-box retailer.

The agreement gives the developer six months to craft a development proposal for the city, secure financing and identify major tenants for the development at Truman and Lazard streets, City Administrator John Ornelas said Monday.

Ornelas estimated that the Zelman center could net the city up to $700,000 a year in sales taxes.

The agreement was announced just a few days after the city disclosed that Rydell Automotive Group, which operates a General Motors dealership downtown, will spend an estimated $10 million to double its size, possibly tripling tax revenue for the city of 25,000.

For years, San Fernando has tried to boost economic development in the tiny community.

A year ago, in a surprise move, Burbank developer Victor Georgino withdrew his bid to build a multiplex theater, retail outlets and restaurants there, saying it was simply a business decision.

And while some of the general merchandise big-box retailers have established new outlets south and west of San Fernando, that community has been bypassed.

“We have a Home Depot with a Sam’s Club on the edge of town, and it’s a great shopping center for us,” Ornelas said. “But this type of center--the K mart, Wal-Mart, Target-type center--is nonexistent for us.

“The city has always identified that area as a good site for your regional retail,” he said. “K mart, Target, that’s the kind of retailer we would like to see.”

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Bob Exel, development partner with Zelman, said it was too soon to discuss the tenant mix at the proposed center, but he remarked that it probably would include one large store with one or two ancillary retailers nearby.

He also said the company does not have a cost estimate for the as-yet-unnamed center.

“Being only five hours into the process, there are a lot of answers we don’t have yet,” he said.

Ornelas said that as the city negotiates with Zelman over the next six months, it will become more clear what type of city subsidies, if any, will be needed to make the project fly.

The city owns two of the 12 acres, with the rest held by a mix of private parties.

Having so many owners “makes it a big challenge for us,” Exel said. “So that’s our next step, to meet with each property owner and get a read on what their wishes are.”

Ornelas said the price of the city’s two acres, and a determination of how much the city would provide in terms of public improvements, such as streets and sewers, would depend on the municipality’s potential tax take.

He said that if all goes well, construction could begin in one year.