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Calexico mayor wants firm proposal on mall project

December 28, 2001|By AARON CLAVERIE, Staff Writer

CALEXICO — Mayor Victor Carrillo is hoping to light a fire under Armin Gabay, the Los Angeles-area developer looking to build a shopping mall near the New River.

Carrillo said after the New Year he wants to see a firm proposal from Gabay that specifies the scope of the mall project and the role Gabay expects the city to play.

"We need to know how (a mall) is going to benefit the community, for instance, creating job development or bringing economic prosperity to the general fund," Carrillo said.

In addition to the potential positives of the project, Carrillo wants to know the possible negatives. Specifically, he wants to know the economic risks Gabay would be undertaking.

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Gabay has told the council that his development firm, M&A Gabay Inc., needs a multi-million dollar loan to buy acreage near the New River and downtown Port of Entry. Gabay proposed putting up 25 percent of the land cost and covering the rest with the city's millions.

Once Gabay has "site control," he'd use his connections to attract retailers willing to set up shop in a shopping complex, he said.

Gabay and his brother Mark Gabay have purchased properties at low prices, then developed them, in once-blighted sections of Los Angeles and Oakland. The Gabay family owns downtown Calexico property as well, according to real estate agent Linda Barrientos.

Once Armin Gabay has enough retailers willing to invest in a New River project, the group would bankroll construction of a mall in phases.

The first phase would be built right next to the downtown port on land owned by the city and Calexican Raymond Lopez. Lopez has said he would consider selling his land to Gabay — at a good price.

Gabay has left himself an out if his plan is approved by the council. If he doesn't find enough retailers, he could sit on the land until it becomes more valuable and sell it later.

If he's not able to sell the land, the titles would revert to the city and it would be back at square one — no new mall, no new jobs.

Gabay said he doesn't foresee that scenario. He told the council his firm would pay back the loan in 18 months.

This fall Lopez was not allowed to build a truck parking lot on his land because the council said it was considering Gabay's initial proposal.

Under examination by a real estate agent representing Lopez, Gabay conceded he can't buy the Lopez property without a loan.

Some of Calexico's fiscal conservatives have said if the council approves Gabay's plan it would allow him to make a profit using city money.

A good number of private businesses that set up operations in Calexico have solicited and received city funds. The most recent example is U.S. Data Source. The council, seated as the Redevelopment Agency, gave that company a $200,000 grant and a $200,000 loan to help expand operations and offer more jobs to area residents.

New jobs and increased development was the argument for each of the projects the council has helped bankroll, including the Wal-Mart, the city's cinema multi-plex and Calexico Tissue.

In the case of Calexico Tissue, the city could be out hundreds of thousands of dollars until the tissue company's parent company, American Tissue Inc., is reorganized after bankruptcy proceedings.

Recently, Calexico Tissue closed the manufacturing plant at its Portico Boulevard warehouse.

Carrillo said Gabay has proven himself a well-respected developer.

"It takes someone with vision to work in this border area. We share this vision," he said.

Carrillo reeled off a list of Gabay's successful projects in El Paso/Ciudad Juarez, Los Angeles and Calexico.

"He's not a Johnny-come-lately," he said.

Carrillo said that he wasn't giving Gabay a "deadline per se" but added, "We'd like to see this undertaken in a reasonable time frame. Various councilmen are running for office who are in favor of this project and we want to follow through with what we've started in June."

Gabay did not return a number of phone calls to his Los Angeles office or his cell phone.

Barrientos, one of his local associates, said Gabay's firm is still looking to build the mall.

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

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