Mayor takes on Rite Aid ‘blight’
The lot on the southeast corner of Manhattan Beach and Sepulveda boulevards has been vacant for the past six years.
The previous gas station was cleared to make way for a 13,000-square-foot Rite Aid store, which the city approved in 2008. The adjoining office building on 11th Street and Sepulveda Boulevard was cleared of tenants in preparation for being torn down.
And then nothing happened.
Manhattan Beach Mayor Wayne Powell remembers when the Rite Aid was approved. He was on the planning commission that approved it. Now as the mayor, he’s leading a campaign to have something done with the site.
“It’s a blight on our community,” he said. “The residents deserve much better.”
It’s not just a personal pet peeve. He said he’s gotten dozens of calls over the past six years asking what’s being done. In the past year alone, he said he’s gotten at least a dozen calls and emails.
Powell has mentioned the issue at multiple city council meetings. He successfully pushed for an update to the city’s nuisance ordinance to include “attractive nuisances,” or eyesores. The law allows the city to abate the nuisance bill the owner for the cost.
The Sepulveda Boulevard site consists of two parcels of land, which belong to two different owners. The vacant lot belongs to Smail Nayebdadash of Palos Verdes. The parcel with the empty office building and liquor store belongs to Stuart Sackley, a real estate investor who owns other properties along Sepulveda Boulevard. Rite Aid signed a 50-year lease with an escape clause after 20 years. According to Sackley, the company has been paying over half a million dollars per year in rent. Nayebdadash’s son Ali declined to answer questions about the amount paid, and Rite Aid didn’t answer questions about the terms of the lease.
Powell is eager to have it declared a nuisance, but city staff was directed to reach out to Rite Aid first.
Two weeks ago, Community Development Director Marisa Lundstedt sent a report to the city council saying that staff had met with the senior real estate director for the Western division of Rite Aid.
“Rite Aid indicated that since 2010 they have been focusing on remodels and have had only one net new location,” wrote Lundstedt. “With the improved economy and a number of other factors, they are now interested in possibly pursuing development of the site and will be discussing options with their internal real estate committee.”
Powell, who got the staff memo at the same time as it was made public, was not satisfied with the response.
“It’s what they’ve said to every city manager,” he said. “I got really upset. I said, ‘That’s all you’re going to do about it?’”
The mayor doesn’t believe that Rite Aid will ever develop the site. He pointed to the recent shuttering of its longtime store in Torrance. He also mentioned the close proximity of Walgreens and Target, which have pharmacies.
“Whoever is making Rite Aid’s decisions is in some corporate office,” he said. “They’re not concerned about our community. They’re concerned about shareholders.”
Ali Nayebdadash, who worked at the gas station that his father operated before it was torn down, traced the problem to the city’s approval of the Walgreens on Sepulveda and the recession. Although Rite Aid’s project was approved before Walgreens’, Rite Aid wasn’t able to start building right away because of the recession. Walgreens did.
“Now we’re second to market,” said Nayebdadash. “We thought we were going to be first.”
Both Sackley and Nayebdadash said that they had expected the company to build its store as planned.
Smail Nayebdadash tore down the gas station and removed the underground gasoline tanks per the lease agreement. Sackley evicted the tenants in his building. Rite Aid would not allow the tenants to stay until the building was torn down.
“They could’ve got $25,000 per month all these years,” said Sackley.
Neither owner wants out of the lease.
“We can’t get out of the lease, nor would we want to,” said Nayebdadash. “They’re good tenants. That piece of land is my father’s retirement.”
Sackley said that Rite Aid asked him a couple of years ago about getting out of the lease. He told them no.
Powell said he’s talked to at least one developer who was interested in subleasing the property but was turned down by Rite Aid.
Because it’s a ground lease, the owners are just providing the land. Rite Aid can build whatever it wants, according to Sackley, who also said that Rite Aid pays the taxes.
The county assessor’s office valued Nayebdadash’s vacant property at $819,000 in 2014. Taxes were just over $9,000 last year, according to the county treasurer’s website. The Sackley land is worth $1.2 million with $615,000 in improvements. Taxes were $22,350.
Powell is frustrated because besides being an eyesore, he thinks the land could be put to better use.
“If we still had a gas station, at least we’d have a business that provided a service to the city,” he said.
It would also be earning the city sales tax.
One possible use Powell has thought of is a temporary parking lot.
He holds up the example of Wells Fargo property on the other side of Sepulveda. A developer planned to build a strip mall where the bank currently sits, but the recession ended those plans. The bank, however, was still able to get financing for construction, so it built its branch and turned the rest of the site into parking, which it then invited residents to use.
“It turned out to be a win-win,” he said. “There at least they developed half of the property. It’s a good case study of what could be done with Rite Aid.”
Even if Rite Aid did move forward with developing the property, the permits it originally acquired expired in 2010. It would have to go before the planning commission and city council again, which Powell estimated would take at least two to three years.
He hopes that staff will send Rite Aid and the property owners a courtesy letter asking them to abate the nuisance, which is the first step in the nuisance ordinance. Failing that, he hopes to get a majority of the council to direct staff to do so. The topic is scheduled to be addressed at the May 5 council meeting.
“The city attorney would say it’s questionable that it’s considered a blight,” said Powell. “In the eyes of the residents or visitors, whatever you call it, it’s not Manhattan Beach. We need to do something — it’s gone on way too long.” ER