Big Box Could Cost Agoura Hills Big Bucks

Despite claims that a proposed retail development in Agoura Hills would not cost the city any money, it could cost $1.5 million in city funds before it is built and millions more in road improvements afterward, according to an unsigned agreement reviewed by the city attorney.

The draft agreement to build a shopping center anchored by a Home Depot calls for the city to help pay for site upgrades and relocation of a county animal shelter and for developer Dan Selleck to widen Agoura Road. But the city would contribute its funding up front, and Selleck would determine when--and if--he would complete a second phase of retail shops and the road improvements.

Details of the development agreement, which has been the subject of three years’ negotiations, have never been disclosed. The City Council has repeatedly insisted that no public money would be committed to Selleck’s project, and until last week denied the existence of the development agreement.

Controversy over the Home Depot project, which has prompted a municipal vote next month on whether big-box stores should be built in the city of 21,000, mirrors battles being fought in upscale suburbs across the country. Those clashes have pitted the nation’s largest home improvement store against community groups backed by smaller businesses that fear being crushed by Home Depot.

According to correspondence between Selleck and Agoura Hills officials, the development agreement has been prepared, but the City Council has not signed it. Mayor Dennis Weber said he had seen the agreement but didn’t remember the terms. He said the amount each side would contribute is still under negotiation.

“Maybe our piece is relocating the animal shelter or doing the medians,” said Weber, who sits on the two-person economic development committee negotiating with Selleck. “I don’t think we’re in position to write checks, but maybe just to share in the costs. Any city that says it is not going to help [by spending] one dime is stupid.”

Under the development agreement, the city would contribute $1.5 million, or nearly 20% of its $8-million operating budget, and may never see the road improvements. The high costs of leveling a section of Ladyface Mountain and moving the animal shelter make the second phase too expensive to complete and not likely to happen, said Ed Ball, a former minority partner in the deal who parted with Selleck last month over the financing of an unrelated project.

Selleck, who would earn his profits when tenants move in, said he plans to find a way to complete all the work without the city’s financial help. The city pegged the area for redevelopment in 1991 because the blue-collar equipment and hardware businesses there do not match the Southwest-themed stucco and glass office spaces that have sprung up on the local hillsides since incorporation in 1982.

“In a redevelopment deal, it’s customary for the city to participate somehow,” said Selleck, who transformed the old General Motors plant in Panorama City into an $80-million mall--also anchored by Home Depot--with $4 million in federal subsidies. The Plant, as it is called, was heralded as a model public-private partnership. “I don’t envision the city [Agoura Hills] participating financially unless they want additional improvements above and beyond what our project would require.”

Yet Home Depot’s estimates support Ball’s claim that the project is not feasible without substantial assistance from the city.

A Home Depot consultant said the project would cost $15 million more than investors have committed. To offset the cost, the city would have to contribute $1.5 million a year over 10 years to make the project work, the consultant said. However, the store would only generate $408,000 in sales taxes in its first year and $544,000 annually by the fourth year, making the level of needed assistance from the city “problematic,” the consultant said.

City officials said last week that they had not seen the consultant’s figures.

The two sides have drawn clear battle lines for the March 5 election. Citizens for Responsible Growth has spent about $140,000 in support of Measure H, which would bar construction of any store larger than 60,000 square feet, city records show. To combat Measure H, Taxpayers Opposed to Special Treatment has spent $40,000 and Selleck and Home Depot have contributed a combined $150,000.

Mel Adams Sr., whose Agoura Equipment Rentals is one of the businesses targeted for relocation, said the shopping center would undermine local businesses, make traffic congestion worse and jeopardize their sleepy, upscale environment.

Al Abrams, spokesman for Citizens for Responsible Growth, said the council has been too quiet about the “single biggest issue in the city” because voters might block the development if they knew the facts.

“We’re in the Enron generation now,” Abrams said. “I wouldn’t trust anything corporate America says anymore, even in a deal with the city.”

One key document, an environmental impact report that projects how the store would affect traffic, may not be released for another two months, well after the election, Selleck said.

For the bedroom community 33 miles north of downtown Los Angeles, a lot is riding on Measure H. While cities on either side of Agoura Hills have increased their bottom lines with new retail development, its more conservative policies have left it with more unoccupied office space than revenue-generating stores. And there is little room in the city budget, officials say, for much-need improvements to the freeway interchange at Kanan Road.

If Measure H is defeated, the Home Depot proposal would be submitted to the city for consideration, Selleck said. All five council members have said they support redeveloping the 24-acre site to replace the worn machinery and rubbish visible from the Ventura Freeway.

“You can count the number of big boxes in this city easily--there are none,” said City Councilman Jeff Reinhardt, who supports the Selleck project. “You don’t see a big-box store, an auto mall or a shopping mall, despite rampant development in our surrounding communities. We have no demonstrated recklessness.”