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Calexico RDA to consider loaning developer millions

August 29, 2001|By AARON CLAVERIE, Staff Writer

CALEXICO — This city's Redevelopment Agency decided to consider loaning a Los Angeles-based developer millions of dollars to buy land near the New River.

Armin Gabay, a partner in the development firm M&A Gabay LLP, explained his proposal to the City Council, seated as the RDA board, at a special meeting Tuesday night.

If the board eventually signs off, Gabay's firm would put down 25 percent of the price for the land and the RDA would loan the company 75 percent at a low interest rate.

Gabay said the loan would be a "bridge loan" since the money would be paid back in 18 months when, or if, the developers attract businesses for the proposed retail space near the river.

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He said his firm has looked at the land near the New River west of the city for more than eight years. Gabay said the area is ideal for retail stores, which would bring in, "a substantial amount of business; benefiting ourselves, the community — everyone."

His firm has developed similarly blighted areas in the Southern California communities of Lynwood, Huntington Park and Inglewood.

While the RDA board did not sign off on the loan at Tuesday's meeting, it gave direction to city staff in closed session to continue talks.

Before the board went into closed session, members asked Gabay questions concerning his proposal.

Mayor Pro Tem John Renison asked, "With the Mexican economy taking a hit, would that not force these sellers to ask for a better price?"

Gabay said once the city loans his firm the money, the negotiations to buy the various parcels of land would be easier.

To make the entire development a reality, Gabay's firm would have to close escrow on various parcels of land in the border area.

Councilman Javier Alatorre noted there seems to be pressure from the sellers of the parcels since a special meeting was scheduled.

"This is a great idea. My only problem — it is really important to analyze it from all perspectives. We don't have any analysis from staff," Alatorre said.

He added the project needs to go before the city Planning Commission and have a public hearing because, "We need to answer to the taxpayers."

Councilman Gilbert Grijalva said he wasn't sure how the U.S. Environmental Protection Agency would react to the proposal but said he has heard of commercial developments going into nearly similar situations, such as Superfund sites, that needed to be cleaned up.

Gabay said covering the highly polluted river is "very important."

He said his firm has a back-up plan to cover the river if a proposal to line and tube the river — a plan the City Council is paying to study — falls through.

Councilman Frank Montoya said the proposal sounds great but he wanted to know if the RDA had the money to loan.

Mayor Victor Carrillo said the proposal would bring needed improvements but agreed with Grijalva in that there might be some health and safety issues.

He said the RDA board should be "prudent and judicious in looking into whether a joint venture could be formed."

Staff Writer Aaron Claverie can be reached at 337-3419 or claverie7@hotmail.com

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