Work begins on Pacoima’s new Costco

For years a chain-link fence surrounded the contaminated 25-acre lot near the junction of Interstate 5 and California 118 in Pacoima, a daily reminder of the thousands of well-paying manufacturing jobs lost to Mexico in the last decade.

After a complex clean-up effort, detailed in an 8-foot-high stack of documents, officials on Thursday broke ground on a $78-million project that economists hope will provide a much-needed retail hub in one of the San Fernando Valley’s most impoverished communities.

Known as Plaza Pacoima, the 209,000-square-foot project will feature the first Costco built in Los Angeles in a dozen years. It will also include a Best Buy and other stores, plus restaurant and office space. It is expected to create 438 construction jobs and 354 permanent positions at a time when many projects are on hold.

At Thursday’s event -- with a standing-room-only crowd repeatedly cheering speakers -- state and local legislators ticked off obstacles the builder, environmental officials and redevelopment experts overcame to begin construction.

Attracting dollars to build in the largely working-class northeast Valley has historically been difficult, lawmakers recounted, not to mention difficulties overcoming significant contamination on the site itself, where metals and solvents were left behind with the departure of plumbing fixture manufacturer Price Pfister.

“What’s being created here is truly an economic miracle, especially in this climate,” said Bruce Ackerman, president and chief executive of the Economic Alliance of the San Fernando Valley, an organization created in the aftermath of the Northridge earthquake to revitalize the region.

The builder and redevelopment officials also spent months hammering out an agreement with several dozen community groups on benefits they would realize from the project, including first crack at jobs created on the site. Pacoima has among the Valley’s highest unemployment rates.

“Jobs were our biggest concern,” said Roy LaVoise, director of job development for Communities in Schools, noting that the agreement allows workers to be interviewed without background checks.

“This is a huge gang area, and we’re trying to get people off the streets and into a job,” he added.

Officials said the project, which will have an 898-space parking lot “landscaped as a grove” with more than 500 trees, would bring hope to a industrial area where residents have long had to travel far afield to shop. The parcel also includes a 140,000-square-foot Lowe’s Home Improvement Warehouse, which is under construction on about 10 acres that are owned separately.

Readying the site took years, as its former owner, Black & Decker, which bought Price Pfister, undertook an extensive cleanup monitored by state and federal regulators.

Workers trucked 35,000 tons of contaminated soil off the parcel in sealed tractor trailers to prevent toxic dust from escaping and blowing into yards of homes across the street.

They removed 6,000 gallons of oil and 2,000 pounds of solvents used to clean metal fixtures and installed vacuum cleaners to suck toxic vapors out of the soil. They also sank wells to clean contaminated groundwater deep beneath the surface, an effort complicated by contamination that migrated into the water table from a separate site on the other side of Interstate 5, redevelopment officials said.

Development is important not only for the Valley, Los Angeles Mayor Antonio Villaraigosa said at Thursday’s groundbreaking, but also for the city as a whole, as economic leaders seek to boost sales tax revenues to bridge a burgeoning budget deficit.

“L.A. will not lie down in the face of this recession,” Villaraigosa said, adding that the Costco project was expected to bring $2 million in annual sales tax revenues into city coffers.

The mayor said Plaza Pacoima is the result of efforts he’s undertaken with Robert “Bud” Ovrom, deputy mayor for residential and commercial development, to build the region’s sales tax base.

Los Angeles ranks 314 among the 567 entities that collect sales tax in California, according to the state Department of Finance. The city collects $111 in sales tax per capita annually, compared to $175 collected by San Diego and San Francisco, $360 by Santa Monica and $715 by Beverly Hills.

Without $9.8 million in public subsidies to help purchase the site and build new utilities and roads, the project’s developer said he wouldn’t have been able to construct the project.

Big-box retailers that often shy away from working-class communities were attracted to Pacoima because of the size of the former Price Pfister site and the lack of competition, said Arturo Sneider Primestor Development Inc.

Costco executives and Los Angeles officials agreed the development won’t be the retailer’s last stop in the city, which Villaraigosa said has the spending power to support 16 Costcos. It has four.

“I will guarantee that this won’t be the last Costco that comes to the city,” said James D. Sinegal, Costco president and chief executive

To which Villaraigosa, sitting behind the lectern where Sinegal spoke, replied: “That’s what I like to hear!”

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jennifer.oldham@latimes.com