City Drops Developer of Watts Industrial Park Project

A $10-million proposal to build Watts’ first industrial development project in 15 years suffered a setback when the city of Los Angeles formally ended its partnership with the nonprofit group that headed the development.

The group, Economic Resources Corp., had been planning the industrial park on a 10-acre, city-owned parcel near Lanzit Avenue for more than five years but has been hampered by financial problems.

Los Angeles city officials, saying they were fed up with the group’s excuses and delays, withdrew the exclusive development rights Monday from the Lynwood-based nonprofit group.

“It simply wasn’t moving,” said Los Angeles City Councilman Mark Ridley-Thomas, whose district includes the project and the surrounding Watts community. “It should have been built by now.”

As proposed, the Lanzit project was expected to create up to 300 permanent jobs amid 164,000 square feet of office and light manufacturing space, a child-care center and job training facilities.

Watts leaders say the project has become a symbol of unfulfilled promises for a community that has been passed over by the state’s robust economic recovery.

Ridley-Thomas said he is not certain if the city will offer the project to another nonprofit group or sell the city-owned parcel to a private developer. A decision on the project should be made in the next 30 days, he said.

But the councilman insists that he will press to ensure that the project is built.

“I’m of the view that the Lanzit project must be developed and if that means getting another developer, so be it,” he said.

The city has an incentive to complete the project: It already has spent $5.2 million to buy the property, build streets and sidewalks, and install lights on the land.

Economic Resources has a record of creating inner-city jobs that dates back to 1968. The group built a 52-acre business park in Lynwood and the Martin Luther King Jr. shopping center in Watts.

Economic Resources officials blame the delays on Browning-Ferris Industries, the nation’s third-largest trash hauler. They say Browning-Ferris reneged on an agreement to invest as much as $2.6 million in the project as a condition of winning lucrative city contracts for trash hauling.

Browning-Ferris promised to make the investment because the city offered preferential consideration to bidders that agreed to help create inner-city jobs. In 1993, the city gave Browning-Ferris two trash contracts worth $95 million.

Dutch Ross III, president of Economic Resources, also blames Los Angeles city officials, saying they failed to pressure Browning-Ferris to live up to its agreement.

“Browning-Ferris didn’t do it because no one forced them to do it,” he said.

City officials promised to make Browning-Ferris live up to the agreement, even with another developer for the site.

Browning-Ferris officials have said that the company did not provide the money because Economic Resources broke the agreement by failing to secure other investors in the project.

Last year, Economic Resources sued Browning-Ferris, demanding at least $3.9 million in damages.

Hoping to revive the project, Economic Resources officials said Southern California Bank recently agreed to invest the funding that Browning-Ferris has failed to provide.

But in March, the city’s Community Development Department released an economic analysis, saying the project still needs an additional investment of up to $1 million and an investor to guarantee repayment of a $3.7-million city loan.

When Economic Resources could not meet the city’s new demands, the city pulled the plug on the project.

“Too much time has elapsed, too little progress has occurred, and far too many delays have prevented and eliminated the possibility of a timely build-out and completion of this project,” Jasper Williams, the city’s industrial and commercial development director, said in a letter to Ross.

Ross disagrees with the city’s latest analysis, calling the new demands “unachievable.”

“‘We are extremely disappointed,” he said.