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Thursday, Mar 28, 2024

Development Has Been Brewing for Decades

After sitting on the land for some 25 years, a developer has begun construction on a 5-acre shopping center in Palmdale. RY Properties Inc. of Alhambra broke ground last month on the first phase of the project, a 5,700-square-foot building with Starbucks and other tenants yet to lease. The project has been through ups and downs in the market, despite zoning for the Rancho Vista Town Center on the city’s west side being approved in 1986. “The market just hasn’t been right,” said Greg Quan, development manager with RY Properties. “We were close to starting in 2007, but then the market dropped again.” This time around, things may work quicker as RY sold an adjacent 5-acre piece of the development to Wal-Mart Stores Inc. for $1.3 million. The Bentonville, Ark. retailer intends to build a 40,000-square-foot Neighborhood Market on the site. In addition to the first building, RY has plans to construct a 5,000-square-foot building at Rancho Vista Boulevard and Town Center Drive to attract a financial institution, and a 19,000-square-foot building Quan expects to lease out to “neighborhood use” tenants such as a restaurant, nail salon or cell phone store. The investment for the first building is about $3.2 million and the developer plans to have it open by October. Palmdale Mayor Jim Ledford said there is a large need for retail in the area, as there are thousands of homes near the Rancho Vista Town Center. “The residents around here need this,” he said. “This has been a long time coming.” RY Properties also owns two retail-zoned lots nearby adding up to about 15 acres. Quan said there is no timetable for plans on those lots. “Everything will depend on our leasing here,” he said. “Getting Wal-Mart and Starbucks has helped kick off this project and we’ll see where it goes.” Challenging Office A newly vacated 290,000-square-foot office tower in Simi Valley is looking for a tenant. The building at 400 National Way was part of a portfolio purchased by Rising Realty Partners in the fourth quarter from Bank of America Corp. of Charlotte, N.C. for $200 million. The portfolio of 10 office buildings in the greater Valley region came to the bank when it purchased Countrywide Financial in 2008. Bank of America has vacated several of the old Countrywide buildings, including two in Lancaster and now the one at 400 National Way, which was formerly a call center. But leasing the property may be tough in a small market not considered extremely tight. “We always like to have lighting in the bottle, but it’s a special asset that could require some time to market,” said Matt Heyn, senior vice president at the Universal City office of CBRE Group Inc., listing broker on the building. The consensus is that Nelson Rising, principal at the Los Angeles real estate investment company, got the buildings for a steal, paying roughly $114 a square foot for the portfolio. And while many industry insiders expect him to sell the buildings piece-by-piece, the company thinks it can lease the Simi Valley building to one large tenant. The building is in an attractive setting, behind a hillside on 44 acres. Heyn said the firm has not established a direct asking rate, as he expects a user that will have specific needs. “We expect that a user will want to control the building themselves,” he said. “We’re keeping it open ended.” Post Redevelopment Era After struggling to attract new office and retail tenants in the post redevelopment era, Glendale is forming a non-profit economic development corporation. The corporation, which will be staffed by city workers and led by a board of directors composed of City Council members, will focus on business attraction, marketing, helping businesses deal with City Hall and more. “The importance of a robust economic development effort did not go away with the dissolution of redevelopment. It merely took away one of our tools,” said Philip S. Lanzafame, director of economic development. And there may be no city that reaped the benefits of redevelopment more than Glendale, which under the agency’s guidance created an attractive high rise office district and developed the Glendale Galleria and Americana at Brand malls, among other projects. Startup costs are expected to be well under $10,000. The money will come from a share of the funds distributed by the state that formerly went to the city’s redevelopment agency. Staff Reporter Elliot Golan can be reached at (818)316-3123 or [email protected].

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