Sale of Land Under Fire
Embattled South Gate Treasurer Albert Robles is at the center of another controversy, as city officials plan to sell an 11-acre site to his former business partner for a price that critics and real estate experts say is far below its market value.
Officials want to sell the mostly vacant, industrial-zoned land for $425,000. Several real estate experts say the property, which fronts the Long Beach Freeway, could be worth anywhere from $2 million to $5 million.
Compounding the controversy are recent revelations that a building on the site is apparently being used by a telemarketing company to work on a city-funded campaign against the police officers union, one of Robles’ political foes.
The latest developments have prompted complaints of cronyism and misuse of public funds as the city prepares to hold a recall election next month targeting Robles and his three allies on the City Council.
City officials contend that the land deal is no giveaway. The sloping expanse of property, a former landfill and shooting range, is rife with environmental problems, said Oliver Mujica, the city director of economic development.
“There is very little you can do without spending an exorbitant amount of money,” he said.
Officials have already approved use of a portion of the site as an impound lot for a towing company owned by the father-in-law of Lynwood Mayor Fernando Pedroza.
Critics contend that action runs counter to the city’s own argument that the land is of little use. They say the deal shortchanges taxpayers in one of the county’s poorest cities.
“It’s a fire sale at City Hall,” said Councilman Hector De La Torre, a Robles critic. The land deal “is a gift that keeps on giving,” he said.
The three-member majority on the City Council that is allied with Robles has already expressed support for the deal. It is scheduled to be discussed at a council meeting Jan. 6.
The 37-year-old Robles is considered the most powerful political force in the city. He recently faced charges of threatening to kill state legislators. The trial ended when a jury deadlocked. Prosecutors have not said whether they will retry him.
Robles was not available for comment, but in the past has said that he no longer has financial ties with George Garrido, the businessman who has offered to buy the land.
Garrido, a nursery owner who was Robles’ partner in a trucking company, was not available for comment.
The site, with extended freeway frontage, sits near the confluence of the Los Angeles River and the Rio Hondo Channel in the southeastern part of the city. About half the acreage was a dump until the mid-1990s.
The remaining land was used mainly as a shooting range until earlier this year, when the council agreed to lease it to Garrido.
Critics and real estate agents say the $15,000 Garrido is paying annually under the 35-year lease is far below market value. And by leasing the land for such a long time, the city made it unattractive for anyone other than Garrido to buy the property. The site could have been leased for as much as 10 times more, the real estate agents said.
City officials said the low rent was necessary as an incentive for Garrido to move his nursery from another site slated for a housing development. Officials said if he wasn’t accommodated, the city would have had to pay damages.
A few months after the lease agreement was approved, Mujica said Garrido told the city he wanted to buy the land.
Officials ran a sale notice for two weeks in a local newspaper. The only other offer, at a lower price, came from the former owners of the shooting range.
Experts said the property was not marketed seriously. Municipalities normally seek real estate agents’ help in selling large industrial sites, they said, and it can take months to get the word out and structure a good deal.
“They got no exposure. They hid the property,” said Leo Vusich of Lee & Associates, an industrial real estate broker in the City of Commerce with more than 30 years of experience.
City officials disagree, saying the market exposure was sufficient, and that the price is fair.
That price, they said, was based on an appraisal from Duncan Appraisal Corp., which is a Garden Grove-based company.
The appraiser, Donald Duncan, wrote that the site’s value is limited because it is criss-crossed by several easements, including overhead high-tension wires and railroad tracks.
The appraisal’s value of $425,000 is one-tenth the price, on a square-foot basis, of nearby sites, which Duncan said are better situated.
“There’s a lot of problems on the site. I don’t know what you could put on it,” Duncan said in an interview.
The appraisal was criticized by several real estate experts who reviewed it at The Times’ request. They acknowledged that the site’s value is impacted by the landfill and the uncertainties surrounding the cleanup costs.
But the appraisal was incomplete, they said, because it failed to give any value to potential uses as a storage yard for trucks and trailers.
A buyer “can use the [property] for parking or a parking-related concession,” said Larry Kosmont of Kosmont and Associates, a real estate consulting firm.
In the weeks before the proposed sale, city workers have been making several taxpayer-funded improvements. Some of them, like closing the landfill and installing monitoring wells, were required by the Regional Water Quality Control Board.
City workers have also fenced the site and installed a heavy metal gate. City Atty. Salvador Alva said those improvements were necessary to reduce the city’s risk of liability in case of trespassers.
But critics question why such changes are being made now. And they question the legality of the telemarketing operation.
Earlier this month, the council approved a $98,000 contract to hire a telemarketing company to question residents about donations to the police union. De La Torre, one of two council critics of Robles, said the council was acting on Robles’ recommendation.
The union, say city officials, is not a qualified nonprofit organization because its corporate powers were suspended by the state in 1983 and it therefore cannot function as a charity.
Phone operators have been canvassing residents for weeks, telling them that donations to the union might not be tax deductible because of the union’s status, according to residents who have received the calls. Donors may be entitled to a refund and damages from the association, according to a letter written to residents from Alva, the city attorney.
The city has not disclosed where the callers for the telemarketing company are working, but sources say the building on the land being leased by Garrido was remodeled earlier this month and equipped with a 24- to 36-line phone bank.
Efforts to interview telemarketing officials at the site were unsuccessful. A guard prevented access to the building, which is fenced off and guarded by dogs.
“They are just trying to smear the credibility of the union,” said Frank “Pico” Rivera, a policeman working to recall Robles and his three council allies. “They know we have the public’s support.” The union has teamed with community groups in the recall effort against Robles.
Union officials say they ran afoul of state regulations by allowing the union’s state registration to lapse, but insist that it is a qualified nonprofit with a federal tax identification number.