A dialysis center could soon be built on a vacant city-owned property in the outskirts of Montebello, now that the city council has approved a modification to the plan for a mixed-use development that failed to attract commercial retailers, cutting the amount of revenue the city and the developer hoped to generate from the investment.
The Olson Company won a bid in 2006 to build 60 residential condominiums and a 7,600 square foot commercial retail and restaurant building on the vacant lot located at 100 W. Washington Blvd. As the project progressed, the developer purchased two-thirds of the lot for nearly $1.2 million and built the residential component of the property, which is now all occupied.
However, the commercial component failed to generate interest during the troubled housing market and the peak of the recession. Around 2007, The Olson Company asked the city to be released from its obligation to build a commercial component on the property, leaving part of the site vacant for years and the city without the revenue stream it had hope to get from the deal. The city expected the development to generate sales tax and other revenue for Montebello
The city has spent the last five years marketing the lot and had two perspective buyers last year. However, DaVita, a dialysis service provider, and Market Street Development LLC offered the city two times the amount offered by a prospective buyer with retail interests. The dialysis center guaranteed to move forward with the project to build a medical center and bring jobs to the city, said Montebello Director of Planning and Community Development Michael Huntley.
DaVita and Market Street Development LLC now want to build a one-story, 8,975 square foot medical office building at the location and the city council held a public hearing on the modification request during its March 27 meeting. The new plan calls for reducing the number of proposed parking spaces from 45 to 36.
“The enlargement of the building and the reduction in parking is what necessitates the approval of the proposed modification,” Montebello Planning Manager Ariel Socarras told the council.
“There is a lot of pluses with this [facility] coming into town rather than leaving this location empty,” said Councilman Art Barajas.
In December 2012, the city approved the application by DaVita and the developers to buy the property for $850,000, as long as the applicant obtains the proper land use entitlements. The developer was given two years to complete their plans or risks having the city reacquire the property.
“The price they offered was very attractive,” said Councilman Jack Hadjinian.
In addition to the purchase price, the proposed medical center will provide more revenue to the city through business license fees, increased property taxes and building permit fees, than a commercial developing, according to a city staff report.
As an added bonus, DaVita has stated they will give priority to qualified Montebello residents who apply to work at the facility, according to Barajas.
The vacant lot is located on the southeast gateway point into the city, across from Pico Rivera and Commerce. According to city officials, the location’s close proximity to a shopping center in Pico Rivera, which includes a Walmart, Chili’s, Walgreens and other retail outlets and restaurants, made the location less attractive to retailers.
City Attorney Arnold Alvarez-Glasman told the council that the city had made a significant effort to try and realize the retail component of the plan, including reaching out to markets, restaurants and retailers.
“Because of its unique size and location there wasn’t that level of attention for those types of uses,” Alvarez-Glasman said.
Hadjinian told the council that he talked to several developers and retailers but the site was “inferior to them,” he said. The size of the lot, the amount of traffic, the density or how desolate the area was prevented companies from being interested in the corner lot, he added.
The development will have no fiscal impact on the city since all construction and related costs will be paid for by DaVita and the developer, according the city.
The council also ruled that the modification to the planned development had no significant impact on the environment and agreed that there was no new traffic impacts or mediations than those from the original environmental report adopted on June 28, 2006.
“Due to the unique characteristics of the dialysis center the reduction in parking spaces was warranted,” said Socarres. He told the council that dialysis patients often do not drive themselves and due to the length of the procedure they are often just dropped off.
A Traffic and Parking Demand Study outlines the center’s plan to have 2-3 spaces for loading, approximately 8 spaces for patients, 8 spaces for employees and provide 4 spaces of guest parking for the residential project.
“The 36 parking spaces provided will satisfactorily meet the parking demands of the proposed dialysis center and satisfy the parking requirements of the original approval for the planned development,” Socarras said.
The modification was approved with a 3-1 vote, with Mayor Christina Cortez voting against the proposal. Mayor Pro Tem William M. Molinari recused himself before the public hearing because his home is within 500 feet of the property.
“We all desperately wanted to see something very vibrant on that corner, unfortunately we are in the situation that we are in because we sometimes don’t work as quickly as we should and this is an example of that,” Cortez said before the vote.
Councilman Frank A. Gomez applauded the efforts of the city’s planning division and told the council that finding a commercial retailer was not prevented by city codes or working diligently enough.
“Bottom line its location, location, location,” Gomez said. “That place is not amenable for whatever one wants to dream about to put there. It’s situated poorly and I think those who know more about real estate know that it’s not a profit-making venue.”
The city originally purchased the property in early 2003 to hopes of redeveloping the land after they demolished the Bahia Lodge Hotel on the property, which had been declared a “public nuisance” by the city.
“We helped turn around this part of the city,” Huntley said. “We have done what we said we were going to do.”
Construction of the project is expected to begin as early as late spring.