‘Giveaway’ Lease of South Gate Parcel Assailed

A former business partner of South Gate Treasurer Albert Robles has been given a lease on city-owned land for less than its market value in a deal that is stirring more controversy in the troubled city.

The South Gate City Council on Tuesday night approved a 25-year lease that permits the businessman, George Garrido, to rent the 15 acres of land for $15,000 a year. Industry experts say the parcel is worth anywhere from double to 10 times that amount.

City officials say the lower rent was necessary to entice Garrido, a nursery owner, to give up another leased site that the city wants for senior citizens housing.

Robles denies that he had any hand in the deal, saying he has broken off his business relationship with Garrido.

“Just because he had an association with me years ago should not make [Garrido] a bad person,” Robles said. “This controversy is fueled by enemies of mine.”

But critics say the deal amounts to a gift of public funds. The agreement allows Garrido to sublease the property and extend the lease to 55 years if he wishes.

“It’s a giveaway,” said Councilman Henry Gonzalez, who voted against the agreement. “Nothing more than a sweetheart contract.”

Mayor Raul Moriel, Vice Mayor Xochilt Ruvalcaba and Councilwoman Maria Benavides voted for the agreement. Councilman Hector De La Torre, who had voiced opposition to the pact, was absent.

One industrial real estate broker expressed astonishment, saying he could have leased the site for 10 times what Garrido will be paying. “I’ve never seen anything like this in my life,” said Leo Vusich, a broker for Lee & Associates.

Percy Duran, an attorney who spoke on Garrido’s behalf at the meeting, refused to comment.

Garrido owns GWS Nursery & Supplies Inc. and has leased a seven-acre, city-owned site on West Frontage Road since 1996. Last year, the original agreement was changed from a month-to-month lease to a 10-year lease by the City Council.

Because the city now wants that site for senior housing, officials say they offered Garrido the new site to avoid paying a big settlement for breaking the lease.

Garrido contends the city would have been on the hook for $9 million in lost revenue if it broke the lease. Critics say the city could have driven a harder bargain, and that it took his claims at face value.

The 15-acre site, a former dump now used as a shooting range, is near the confluence of the Los Angeles River and the Rio Hondo channel.

Bill De Witt, a businessman and former South Gate mayor, had appeared at council meetings in recent weeks, offering the city $30,000 annually to lease the land.

Garrido was linked to Robles through a trucking firm called U.S. Transport. Garrido organized the firm, according to its articles of organization. Robles listed the company on his 2001 statement of economic interest, saying he held a stake of $10,000 or more.

City Atty. Salvador Alva, who drew up the new lease agreement, said he did not know Robles had a business relationship with Garrido and said he would “look into it.”

Alva insisted that the deal is good for the city. “GWS has no motive to move,” he said. “The city has to entice them to move.”