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Tuesday, Oct 3, 2023

Plan to Redo Valley

A developer once thought to be a contender for turning around the struggling Valley Plaza shopping center in North Hollywood appears to be out of the picture now that his bid to acquire a key parcel has fallen through, sources said. Developer Ira Smedra was in escrow to purchase the quake-damaged J.C. Penney Co. building, but brokers for the owners confirmed that the five-acre site is back on the market. “The property is not being sold to Mr. Smedra, and we’re entertaining other offers,” said Steve Weiss, a broker with Capital Commercial. Weiss declined to say why the deal fell through. Smedra, who runs Arba Group, would not discuss the situation. But sources said the Los Angeles developer had difficulty gaining control of a common parking area he needed for his big-box retail project. Smedra’s exit from Valley Plaza could give developer J.H. Snyder Co. the edge as the city’s Community Redevelopment Agency prepares to solicit proposals from developers willing to undertake a $130 million overhaul of the shopping center. Snyder is in escrow to acquire about nine acres of the 40-acre Valley Plaza site and is talking with other owners at the strip mall. “It’s not a secret that we’re looking to acquire additional property there,” said Cliff Goldstein, a partner with Snyder. Goldstein added that his company is not currently in discussions to acquire the Penney building but said, “We certainly would be interested in acquiring it.” Developed in the early 1940s by an entrepreneur named Bob Symonds, Valley Plaza thrived until competing malls began springing up in the 1960s. The strip center at Laurel Canyon and Victory boulevards never managed to keep up with the times. And because it’s bisected by several city streets, pedestrian traffic has flagged over the years. The long decline of the shopping center was exacerbated by the 1994 Northridge earthquake, which resulted in the Sears store being closed for a year for remodeling and the Penney site remaining vacant. Despite a prime location along the Hollywood (170) Freeway, no developer has been able to pull together a replacement project. That’s because Valley Plaza was subdivided early on, and now its many owners more than 30 individuals and groups can’t come together on the terms of such a deal. At one time, Smedra had the owners of 70 percent of the site interested in selling, but the deal unraveled when the developer began reducing his offer. “At our first meeting, he said he would pay us $100 a square foot, but by the second meeting he cut it down to $60,” said Manning Post, a longtime owner who recently sold his property along Victory Boulevard to another developer. “It was an insult. When they called a third meeting, I told them to forget it.” In addition, part of the parking area at the site is jointly controlled by several owners who sources said rejected Smedra’s proposal to relocate the common parking area. The problems of Smedra and other developers prompted the CRA to take over the redevelopment project in February. Some believe it will take the agency and its power of eminent domain to assemble enough property for a major redevelopment effort. “Getting all these people on the same page has been very difficult,” said Chuck LeRoy, co-owner of Anchor Management Services, a property management firm at the mall. The CRA is preparing to solicit proposals for redevelopment. Developers will have 60 days to respond before the CRA board and the Los Angeles City Council approve a plan. The process could be completed by the first quarter of the new year. David Stolzer, senior real estate development agent for the North Hollywood office of CRA, said the agency is looking for a developer capable of pulling off a major revamping of the mall. The idea would be to close some streets that now divide the center and develop a more pedestrian-friendly retail strip that the CRA hopes will spark renewal of the entire area. “What we’re looking for is a master plan for the site,” said Stolzer.

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