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Tuesday, May 30, 2023

Railyard Spot A Hot Button

Business owners in one area of Van Nuys are feeling anxious about the future of their companies. The Los Angeles County Metropolitan Transportation Authority, or Metro, board approved on June 28 a plan to construct a light rail line from the Van Nuys Orange Line station to the Metrolink station in Sylmar. The downside is this project will take land now occupied by 37 businesses west of Van Nuys Boulevard between Raymer and Keswick streets for a rail car storage and maintenance yard. Some, like Ettie Chlomovitz, who operates I&E Cabinets with her husband, and Steve Plourde, the facilities manager at David Barnes Co., attended the Metro board meeting although Plourde believed the vote approving the project was a done deal. It was a feeling shared by Doug Noland, whose Out Back Catering is located down Keswick Street from Barnes. “I have seen a downturn in business because I am forced to deal with what is going on with this project that hasn’t even begun yet,” Noland said. “The anxiety of it is just overwhelming for me.” The Metro board voted to construct a 9.2-mile light rail system for the East San Fernando Valley Transit Corridor project. Construction on the $1.3 billion project would begin in 2021 or 2022 and be completed in time for the 2028 Summer Olympics. It would have 14 at-grade stations to serve three-car trains that can accommodate up to 400 passengers. The site for the maintenance yard, known as Option B, is an alternative to a 58-parcel property near the Orange Line stop in Van Nuys that had previously been put forth by the agency as an option for the yard, the creation of which would have resulted in the displacement of as many as 186 businesses. Landlords and business owners there banded together last year to voice opposition to that proposal – dubbed Option A – ultimately leading to it being pulled from the table. While there has been some organized opposition to Option B among business owners, the general feeling is that Metro took its best option. The real estate acquisition process would begin in 2020, according to Metro spokesman Dave Sotero, who added that eminent domain, the process by which a government agency can take a person’s property at fair market value, is an option of last resort. “We have successfully negotiated property purchases for numerous transit projects throughout Los Angeles County,” Sotero said in an email to the Business Journal. “We are required by law to offer just compensation for properties and to assist business with relocation services.”   Five-year lease? Chlomovitz has operated the cabinet manufacturer for nearly 40 years, the last six on Raymer Street, in an area made up of auto body shops; distributors of heating, cooling and other industrial equipment; granite and marble wholesalers; other small manufacturers; a recycling center and a topless sports bar. She and husband Izzie were told about Metro’s plans more than two months ago by Kenn Phillips, chief executive of the Valley Economic Alliance. At first the couple did not take him seriously, she said. “But then he kept coming and telling us and we realized it was serious,” Chlomovitz added. Phillips said the alliance, a Sherman Oaks business attraction and retention organization, has been in contact with about 18 businesses out of the 37 in the impacted area, representing more than 500 employees. The couple leases the building they occupy at 14660 Raymer St. In April, they renewed their lease for five years. But now they have no idea if they will last that long in the location. “I do not want to lose my business; I don’t want to lose my clients,” Chlomovitz said. “I don’t want to lose my employees because I don’t know where I am going to find another building.” The 100 employees at Barnes, a precision metal grinder and manufacturer, are foremost on the mind of Plourde, who said the company is mid-way through a 10-year lease for the buildings it occupies in the 14700 block of Keswick Street. “We want to stay in the area, otherwise we are going to lose employees,” he added. “These are skilled employees doing the grinding, it’s not like you find them from school.” Relocating would prove a hardship, according to the business owners. I&E, for example, would need special technicians to come from Atlanta to take its machinery apart and put it together again. Noland, the caterer, said there are specific needs for his commercial kitchen, such as gas lines, hoods for stove ventilation and grease traps regardless of whether he has a deep fryer or not. Additionally, he has portable food cars that require specialized washing stations. “That would also need to be built into a new facility,” Noland said. “I would expect that if I am being told I will be made whole, that it is something that Metro would do for me.” New home search But finding new space in the Valley would not be easy. Jeff Puffer, a broker with Delphi Business Properties Inc. in Van Nuys, said that industrial properties in the San Fernando Valley are in high demand and only a few are available. “There is not a lot of space and its 70 to 100 percent more expensive than what it was six to eight years ago,” Puffer said, although his gut feeling is that the pricing has plateaued. He sees tenants renewing leases for longer periods of time, Puffer said, adding that even tenants of small spaces are taking longer leases because of the lack of supply. “They are locking in long term leases to give surety for their businesses to have a place to operate and know what the rent schedule will be for the next five to 10 years,” Puffer said. Phillips, of the Valley Economic Alliance, however, has one last trick up his sleeve in a bid to save the Van Nuys businesses. Saying that some creativity is needed, he will propose to the Metro board that it swap some land for an empty 17-acre parcel now owned by Los Angeles Department of Water and Power at 7600 Tyrone Ave. In exchange for that land, Metro could buy some or all of the 30 acres now occupied by Copart Inc. on Woodman Avenue and used as a car auction lot and sell it to LADWP, which has plans for a water purification plant on its Tyrone Avenue land. “LADWP says they have use for the site. Well, guess what? These 37 businesses and 750 employees, who in some cases have been there for seven decades, have a use for their businesses, too,” Phillips said. The Tyrone Avenue property would be ideal for Metro’s railyard because it is within a half mile of Van Nuys Boulevard. It would also save money and a lot of aggravation as the agency wouldn’t have to acquire any businesses. “It might not work at all but at the least you have done all you can,” Phillips said.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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