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Acquisition and Redevelopment of Former Time Oil Property - Port Los Angeles Distribution Center
San Pedro, California
The significant increases in cargo volume and lack of developable land in the immediate vicinity of the Port of Los Angeles it necessary to site the new Port LA Distribution Center on a former Brownfield property.
Other than a range of environmental issues, the selected property located between the Harbor Freeway (I-110) and Gaffey Street was prime real estate. The property covers almost 90-acres and consists of three separate parcels. The site had been operated as an oil refinery and a terminal, storage, and transfer facility from 1923 until it was shut down in 1995. This complex transaction involved closing on Coastal's option to purchase the property and assuming all of Coastal's liability for the remaining environmental conditions on the site, including the requirement to complete cleanup of petroleum and solvent contamination.
The property was acquired in the Fall of 1999 by a Joint Venture between LandBank, two local real estate and development partners, and Pacific Coast Capital Partners. Mr. Stuart Miner, a founder of LandBank and now a Partner in Brownfield Partners, LLC, led the team that completed the due diligence on the property and closed the transaction. Ms. Mary Hashem, now a Partner in Brownfield Partners, LLC, managed all of the negotiations for the final cleanup standards and site remediation plans with the Los Angeles Regional Water Quality Control Board (LA-RWQCB).
After purchase of the property, the acquisition team brought in Overton Moore and Associates (OMA) as a partner to develop the property. At the same time, the JV closed on a nearly $70 million construction loan from Wells Fargo. The proceeds of this loan were used to fund completion of environmental restoration of the property, site development, and construction of 1.8 million square feet of warehouse/distribution buildings.
The remediation work was completed in June 2001 and regulatory closure was received from the LA-RWQCB in August 2001. When the first phase of development was 100% leased, the property was sold to an institutional real estate investment group.
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