CITY OF INDUSTRY, CA—One of the first land deals since the state shut down 400 redevelopment agencies has finally concluded, some 1.5 years after entering escrow.

A 10.67-acre land site here that was designated for redevelopment has been sold for $10 million by Chalmers Equity Group to Jacmar Foodservice Distribution, which services white-tablecloth restaurants, delicatessens and fast-food establishments.

Jacmar will use the property to house a 232,000-square-foot industrial property, with construction anticipated to cost more than $23 million. The completed project will have a 32-foot minimum ceiling height, 25 dock-high loading doors, and cooler and freezer storage.

Lee & Associates brokered the deal for CEG on the property, located at 300 N. Baldwin Park Blvd. in City of Industry. John Tilley of the Imperium Co. represented the buyer.

“We had three offers to do build-to-suit,” says Jeff Bethel, SVP of Lee's City of Industry office. “But (California governor) Jerry Brown shut down the (local) redevelopment agency. The buyer was ready to close, but the government shut down to get those (redevelopment) funds back.”

Brown told the New York Times that he considered the redevelopment agencies as a special interest "piggybank," and that the state needed those funds as a way to cover its $25 billion deficit. Cities fought back, saying that the agencies created jobs and transformed blighted areas, but ultimately lost the battle.

Bethel tells GlobeSt.com that the parties to the City of Industry transaction initially thought sorting out the post-redevelopment agency world would take six months. But they soon learned that the new realty of dealing with a multitude of local and state officials made everything take a lot longer.

“We basically hung in there and made things happen,” Bethel says. “Everything has been in limbo because there's all these oversight boards that they put together for the disposition of these properties that were formerly (dealt with ) in city redevelopment agencies. This is one of the first (properties) that actually was allowed to be sold.”

Trace Chalmers, the president of Chalmers Equity Group and CEG Construction, called the sales process “kind of a debacle.”

Because CEG had signed documents prior to the abolishment of the agencies, they had an “enforceable obligation,” Chalmers says. Those with pending deals that didn't have that status “were wiped out,” he says. The City of Industry sale is one of “four or five” that have gone forward since the redevelopment agency purge, Chalmers says.

“Previously it was just the city council and redevelopment agency executing the deal,” says Chalmers. “We did four or five projects with City of Industry. They did a lot of improving of blighted areas. Now it's a money grab where the state will take the funds. What the state didn't realize is that it's not like all these properties are owned free and clear. We will see what happens in terms of revenue. This wiped our redevelopment jobs and projects like downtown San Diego's revitalization. None of that would have happened (if redevelopment agencies still existed).”

Bethel says Jacmar is expanding and relocating from Irwindale, with the new City of Industry facility serving as its new corporate headquarters. “There is an extremely low supply of state-of-the-art buildings in Los Angeles County,” Bethel says.

As reported earlier by GlobeSt.com, Lee & Associates was involved in the sale of a portion of Palmdale Marketplace, a 500,000-square-foot power center in Santa Barbara.