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Housing
Slump or Not, Homes Still Slated for Alondra Landfill Site
Elected official expresses concern as real estate depression continues
Plans to build 100 homes at the former
Alondra landfill site on West Alondra Boulevard, shown above, are
moving forward despite housing market woes. —Photo by Allison
Jean Eaton
By
Allison Jean Eaton
Bulletin
Staff Writer
COMPTON – Two
years after an exclusive negotiation agreement (ENA) was inked, city
lawmakers last month finally moved forward with a plan to build 100
single-family homes on the former Alondra landfill site despite the
real estate bust.
The City Council acting as the Urban Community Development Commission
July 15 unanimously approved entering into a disposition and development
agreement (DDA) with Advanced Real Estate Services Inc. to develop the
17.9-acre vacant lot, which for years has served as an eyesore blighting
one of the city’s major thoroughfares.
Advanced will pay the city $15.25 million for the land.
The move did not come without some hesitation on the dais. Councilman
Isadore Hall, a real estate executive, said he’s worried the city “could
lose in the end” in that there’s no telling when the real estate
market will bottom out and begin its slow recovery.
The land was appraised in January at roughly $8.5 million. But the
value of that land could continue to decrease to a point where the city’s
return would be less, Hall said.
According to Rick Julian, president of Advanced, the signing of the
DDA gave his agency the authority to move forward with contamination testing
and remediation work, which will be conducted by Sukut Construction, which
Julian described as the largest grader in the state and the premier “landfill
closer” in the nation. “They are experts in the art of closing
it (a landfill) at the least cost possible.
“Obviously there is a lot of work to take place,” continued
Julian. “We
need to keep in mind the property will be re-evaluated” once the
remediation work, the cost of which the city is to shoulder, is complete.
This is where the catch – and Hall’s concern – comes
in.
“I’m a little ambivalent about this. It’s already been
two years,” he
said relative to the ENA, which was signed on May 23, 2006. “I’m
really excited that we’re going to do something with that lot, but
if it takes two more years, the value of that land could depreciate
a great deal. That means they (Advanced Real Estate Services) have the
right to
renegotiate.”
Over the past two years, the so-called mortgage meltdown has burst
the housing bubble wide open, leaving numerous builders, developers and
homeowners by the wayside in its wake. Economic experts currently advise
caution in any type of real estate development.
In 2006, the ambitious project was expected to boost property tax
coffers by $70 million annually. Advanced, which will build a gated community
of homes on 5,000-square-foot lots along with a pocket park, then planned
to price the homes from $600,000 to $700,000.
But those prices likely wouldn’t cut it in today’s market,
and they might be too far out of reach for too many in the future.
In June alone, Southern California housing prices plunged 29.3 percent
compared to last year, according to DataQuick Information Systems. The
median price for new and resale homes and condominiums stood at $355,000
in June in a six-county region, down from $502,000 in June 2007.
And the availability of mortgages has shrunk dramatically, according
to DataQuick President John Walsh. Even qualified borrowers are being turned
away left and right by lenders.
“The mortgage market turbulence is putting quite a bit of activity
on hold,” he said. “Even some very well-qualified households
aren't getting mortgages these days, although this could all change
fast if liquidity comes back.”
Dr. Kofi Sefa-Boakye, head of the city’s Community Redevelopment
Agency, said he’s aware of the economic ramifications of the plan
as the economy stands today. However, that’s no reason to go back
on the agency’s overall aim to breath new life into the 3rd District
area.
“That doesn’t mean we should back away from our goals of transforming
this city,” he said. “This (housing slump) is cyclical – it’s
a temporary downturn. It will turn around.”
The county’s chief economist, Jack Kyser, agrees. Even though the
latest report from his office says the state is “on the brink of
recession,” some parts of the state are already in recession and
the cause of the recession will linger until 2009, he’s not ready
to label such projects bad ideas.
His office’s most recent mid-year economic forecast report predicts
the market will move into a “recovery” in late 2009. But it
will be a slow one, he said.
Sefa-Boakye estimated it should be about a year before any kind of
construction begins in light of testing and remediation requirements. Once
the homes are constructed and ready to be put on the market, which should
be in the next two to three years, the market will likely have begun to
turn around, he said.
The Community Redevelopment Agency purchased the land located at
2815 – 2875 W. Alondra Blvd. from the Compton Brick and Tile Company
in 1956. It was formerly used by the city as a sanitary landfill for refuse
and debris produced through city functions such as street repair, tree
trimming and landscaping from roughly 1947– 1975.
Previous plans positioned the parcel as a future park site, and although
the city in the early 1990s acquired federal and county grant monies – funds
it’s still sitting on and, according to the city treasurer, has earned
roughly $1 million in interest on over the past 12 or so years – the
park plans were scrapped.
Sefa-Boakye was not with the city when that decision was made. He
did say that because that particular parcel is one of the largest owned
by the agency within city limits, “It was determined by the Council
at that time that the highest and best use for the area would be market-rate
residential development.
“It was a policy option to promote housing. Home ownership would
provide better economic benefits, especially in that area,” he said.
If a park were located there, the city would not be able to earn
tax increment on the property, funding which will be used to further the
agency’s goals of transforming Compton in line with the Birthing
a New Compton campaign.
Requests for proposals were sent out in December 2006 to 60 prospective
developers to develop the site, which has long been a damper on economic
and other revitalization in its vicinity. Advanced Real Estate Services
was one of only two developers that submitted proposals.
Longtime resident Ulysses Terry, who has lived adjacent to the site
for more than 45 years, said he’s glad the city is finally moving
forward.
“That property has been vacant for a long time, ” he
said .
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