Sanitation District of
Los Angeles County
(Former American
Can Company)
Carson, CA

33 Acre Development
Two 65-Year Land Leases
Industrial/Retail
Over $100,000,000
Gross Consideration

APPROACH

In 1997, the Districts sought the services of a consultant to assist them in consummating one of the industrial transactions that had been proposed for this 33-acre site. It was anticipated that it would take about 100 hours of consultant work to accomplish that objective. The Districts hired Patrick O’Healy as their consultant and he began to evaluate the various proposals the Districts had received.

One of the proposals was from Arnel Development to do a retail center on the site. Arnel had done their homework and had spent a significant period of time with people in the City of Carson. The pre-selling Arnel accomplished with the City of Carson was so effective that they would consider no other alternatives but retail. This created a significant problem for the Districts because they had purchased the property as a buffer between themselves and the residential to the east. Introducing retail to the site was fraught with potential problems.

CHALLENGES

During this process, we had significant contact with the homeowners and their association. Because of their close proximity to the Sanitation Districts liquid waste facility, the association is very well organized, and there was no lack of vocal expression. Despite the challenges, we continued to present our views calmly, listened to their points of view patiently, and continued to seek resolution that satisfied all parties. We had significant trouble entitling the industrial portion of the property, as the homeowners had a vision for all retail. Unfortunately, the market did not support that vision, and the retail development site was reduced to 22 acres. It took many months of patient persistence on our part to finally convince the city and the homeowners that the development as it resulted was the best possible alternative.

Further to the Districts challenge was their relationship with the City of Carson. Because the primary liquid waste treatment facility is located in Carson, the City of Carson and their residents bear the brunt of inconvenience associated with the waste the balance of the county generates. The Districts is very sensitive to that fact and wanted to aggressively mitigate the impact of their facility on the city and residents. The Arnel development promised quality retail and the infusion of sales tax dollars, two very important elements to the city.

It became obvious that the Districts had been “end played” by Arnel, and would have to negotiate with them for retail on the site. Arnel was well aware of the negotiating advantage they enjoyed and tried to better their position at every opportunity. As time went on, the team comprised of Districts staff, your legal team and O’Healy became very effective at protecting the Districts interests and putting their needs forward while addressing the needs of the City of Carson and the demands of the developer.

The “sensitive receptor” issue, under the regulations of the AQMD, caused a significant amount of creativity and heartburn as the team negotiated a broad spectrum of uses out of the lease. We had many heated discussions with the developer and eventually came to a mutual understanding. We could do nothing else because the consequences to the Districts of a “sensitive receptor” locating within such a short distance of the Sanitation Districts plant could have had grave impact on the citizens of Los Angeles County.

Midway through the negotiations, Arnel decided they did not want the back eleven acres, and tried to renegotiate the transaction. O’Healy found another developer to take the back industrial eleven acres, and the transaction went forward.

During the period of negotiations, O’Healy renegotiated the oil leases and reconfigured the surface rights area of the oil leases, which was an interesting challenge.

RESULTS

Thirty-two months later, the transactions were completed. There were sixty-eight pages of recorded documents, which was a record for the title company. During that time, the team learned a lot, and developed a great degree of appreciation and affection for one another, not to mention respect and pride regarding what had been accomplished.

During this transaction a significant number of outside consultants were enlisted to assist the team in developing the best possible outcome. O’Healy was not embarrassed to admit when he was outside his comfort zone, and the Districts were always willing to consider the acquisition of strategic talent to achieve the best possible outcome. Over time they developed a great degree of trust, mutual confidence and appreciation for the skill sets of the other.

The development is now complete, and is serving the city and residents in a quality manner. The Districts is getting a monthly rent check, and they have preserved the buffer they needed without incurring undue risk of negative impact to the Districts waste water treatment facility. The gross consideration of these transactions was in excess of $100,000,000.00.

Back to Success Stories

Carson Towne Center
Adjacent Homes

Home Depot - Retail Store

Town Center Oil Production