Palmdale Seeks to Foreclose on Auto Mall Builder
In more trouble for Palmdale’s financially ailing auto mall, the City Council has halted talks on a multimillion-dollar plan to purchase part of the site and instead agreed to file a foreclosure lawsuit against the mall developer for $1.7 million in unpaid assessments.
The developer had hoped the city would purchase his remaining interest in the mall for $5 million to $8 million, but the council decided to cease negotiations on the proposal during a closed session early Friday, two city sources said.
The foreclosure action, authorized by the council in public session Thursday night, will seek money owed on undeveloped auto mall property and adjoining land owned by the mall’s developer, Antelope Valley Auto Center, city officials said.
A law firm hired by the city is expected to file the lawsuit within several months. The foreclosure process could take up to two years but could be prevented if the developer pays the assessments.
The dual actions are not expected to have any direct effect on the four auto dealers now operating--and a fifth soon to open--on the already developed 40-acre portion of the auto mall, which opened last year. They own their sites and are not delinquent in assessment payments.
But the council actions could lead to a foreclosure sale of the 28-acre portion of the auto mall that has yet to be developed and about 77 acres of adjoining vacant land planned for related commercial projects--both still owned by Antelope Valley Auto Center.
City documents did not say how much of the $1.7 million was owed for each area. But the split appears to be about $1.3 million for the commercial property and about $400,000 owed for the mall property, a Times analysis shows.
Bill Royster, the managing partner of the venture, could not be reached for comment. But for months he has been trying to talk city officials into buying out his remaining interest in the auto mall property, which would make the city responsible for the property’s delinquent assessments.
City officials, who requested anonymity because the decision was made in closed session, said they finally agreed they could not afford Royster’s proposals because it would have meant using virtually all the city’s available funds at a time when city finances are tight.
The $1.7 million owed by the auto mall’s developer is the largest debt among a dozen owners along the Antelope Valley Freeway facing foreclosure for delinquent assessments totaling nearly $4 million for the past two years. The money is owed to repay what was spent on public improvements for the area.
