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CRA Tries Again with Scaled-Back Deal for Cleantech Manufacturing Center

By Eric Richardson
Published: Monday, October 31, 2011, at 02:45PM
Cleantech Manufacturing Center Eric Richardson / blogdowntown

A vapor extraction system pulls tetrachloroethylene from the 20-acre parcel at 15th and Santa Fe that the city hopes to turn into the southern anchor of a 4-mile corridor of green jobs.

Los Angeles may finally have found a buyer for its Cleantech Manufacturing Center, but the terms that will come before the Community Redevelopment Agency's board on Thursday appear to soften several key policies related to wages and potential tenants for the industrial site.

Under the current terms, the 20-acre site at 15th and Santa Fe would be sold to developer Trammell Crow for $15.4 million, allowing the CRA to repay its loan from EastWest Bank. In exchange, Trammell Crow would promise to put $100,000 into a marketing plan aimed at attracting cleantech tenants to the site.

At least 140,000 square feet must be leased to firms in CRA-specified cleantech categories within the first two years the project is open. Within the first ten years, any available space must be marketed first for cleantech uses before it is made available to other tenants.

That's a step down from previous efforts, which required that all tenants of the site be cleantech users.

A requirement that all jobs on the site pay "living wage" has also been scaled back. The agency's last agreement to sell the site required that all tenant jobs meet city living wage requirements, but the new agreement only applies that criteria to construction jobs and 100 jobs created within two years.

Pressuring the sale is the agency's $15.4 million acquisition loan, which has already been extended twice. It comes due in February of 2012. The proposed sale would close just a few weeks earlier.

The agency acquired the parcel in 2008, hoping to turn it into a southern anchor for a planned "Cleantech Corridor" which would stretch north along the L.A. River to Chinatown.

In 2009, Italian rail firm AnsaldoBreda proposed to build a manufacturing facility on 14 acres at the site, but the deal was eventually scuttled when firm could not reach and agreement with Metro over a $300 million contract to build light rail vehicles.

A bid by a solar panel manufacturer competing for a contract with L.A.'s Department of Water and Power suffered a similar fate, and an attempt to locate a battery pack assembly plant for electric vehicle firm CODA Automotive eventually fell through.

Earlier this year, the CRA selected Genton Property Group as the winning bidder for the site, but again the deal fell through because of environmental questions and financing issues. Trammell Crow, the agency's second-place respondent, declined to buy the property under the terms of the Genton deal, but was subsequently selected as the best choice after further negotiations and term changes.

The site, designated as a brownfield in 1997, was formerly the headquarters for school bus manufacturer Crown Coach. The company was shut down by General Electric in 1991, leaving the site contaminated with terachloroethylene, a toxic liquid that was used to degrease metal parts.

CRA Staff Report for Thursday

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