The developer of this site will receive $2.8 million in loans to revamp it before a national tenant moves in this year. (Photo by Gary McCarthy)
Story Created:
Mar 3, 2010 at 9:07 PM PST
Story Updated:
Mar 3, 2010 at 9:07 PM PST
COMPTON — More than five months after authorizing the Community Redevelopment Agency to extend a $2.8 million loan to a developer seeking to renovate the Compton Renaissance Plaza Shopping Center, the city council has announced yet another delay to the project.
Originally scheduled to have opened this month, city officials said that opening day is still some time away. The reason, according to City Manager Charles Evans, is that the property owner is still in negotiations with the intended anchor tenant, Burlington Coat Factory. In addition, “from my understanding in talking with Burlington and [the property owner] there is an issue with one of the lenders,” he said, adding that the two parties are close to resolving their issues and moving the project forward.
“We’ve been wishing and hoping and praying that it would come,” said Councilwoman Lillie Dobson. “We think it is coming — but it’s another delay.”
According to Evans, Burlington Coat Factory still has every intention of coming into the city. Still, the postponement drew concerns from some who were under the impression that the loan had already been disbursed. But officials attempted to stamp out “rumors” by noting that the city has not yet paid out any money to the developer.
“We have loaned the money,” said Councilwoman Arceneaux. “However, we have not released any money yet because the project has not taken place.”
Added City Treasurer Douglas Sanders: “I can testify, I sign the checkbooks.”
On Sept. 29, the council held an emergency meeting to approve the loan. The release of funds is contingent on the opening of Burlington Coat Factory.
The developer, Compton Commercial Development Renaissance Plaza, LLC, is to use the funds to resurface the entire shopping center parking lot, change the color scheme of the buildings, and apply a new landscape design.
In addition, the vacant 86,489-square-foot building — once occupied by a K-Mart at the northeast corner of Compton Boulevard between Alameda Street and Willowbrook Avenue — will be leased to Burlington Coat Factory following the renovations.
The $2.8 million loan will be codified in a promissory note and secured by a deed of trust. It will bear interest at a rate of 3 percent annually for a period of five years, with an ending date of October 1, 2014.
“The redeveloper shall pay on the $1,425,000 portion of the loan...,” said the Sept. 29 staff report. “The other … $1,425,000 of the principal amount of the [term payment amount] and all accrued interest thereon shall be deferred and forgiven by the agency on the maturity date if no default shall have occurred during the term of the agency loan.”
If no default occurs, the total payments of the forgivable portion of the loan — at the end of the five year period — will be $1,638,750. This includes $213,750 in interest plus $1,425,000 of the loan principal.
In the event of a default, the property is secured through the loan and becomes the property of the city.
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