After years of challenging negotiations that were held up by the proverbial small independent property owner in the middle of a major development, Rusnak/Arcadia Mercedes Benz is on the verge of finally increasing the size of its Huntington Drive dealership by 50% from four acres to six acres.
Deal points are still subject to revision and another public hearing is set for Wednesday’s City Council meeting.
If all goes according to the current tentative agreement, Rusnak, instead of expanding across the entire block between its current location to Santa Anita Ave., will create an L-shaped dealership by adding frontage and a new showroom along Santa Anita Ave. from Morlan Place to Santa Clara Street.
Rod’s Grill and the Elks Lodge successfully held out long enough to win their battle to stay in place on Huntington across the street from Rusnak.
The city considers the buildings on Santa Anita blighted, saying they are “aging and dilapidated, depreciated properties, mixed character and incompatible land use mixtures , substandard design, underutilized land, inadequate public improvements. The changes will replace incompatible land uses, such as older commercial buildings adjacent to the Church in Arcadia next to an automobile dealership, with new investment that will involve a single use for the entire block.
Under current terms of the deal, Rusnak would pay the City nearly $3 mil. for nearly 2-acres of property, at least $800,000 a year in sales taxes for the next 10 years, and $120,000 per year for increased property tax values, for a ten-year total of a little more than $12 million. That would be just about break-even over that period to cover the $11.8 million the City has invested – more than $10 mil. to acquire the properties to sell to Rusnak, and another $1.8 mil. in demolition, relocation and legal fees, and payments to Rusnak for fees, public improvements, and excess sales tax reimbursements. According to a City summary report, the City expects to receive much more than that, as much as $200,000 more per year in sales taxes, or $2 million more than expected in the first ten years, meaning the City could actually recover its entire investment in only eight years, according to the report.
In addition, the other advantages of the deal for the City are listed as: * A first class showroom as part of an expanded dealership that will remain in Arcadia for at least ten additional years. * The preservation of existing jobs and creation of new jobs. * Value to the community of the continuing presence of a Mercedes Benz dealership. * Increased value to other landowners and potential developers from the investment by Rusnak/Arcadia in their dealership.
— By Scott Hettrick