Arcadia Slowly Steers Rusnak Dealership Expansion Back on Track

By Jim E. Winburn

Since the statewide dissolution of redevelopment agencies, the City of Arcadia has been contending with new property requirements to help Rusnak Mercedes-Benz with its decade-old plan for expansion.
Arcadia’s former Redevelopment Agency in 2011 acquired the last parcel of a two-acre site that it intended to sell to Rusnak as part of a development deal. That plan would help the dealership expand to six acres.
But because of the December 2011 California Supreme Court decision to eliminate redevelopment agencies, the Rusnak Mercedes-Benz dealership expansion has been stalled.
Arcadia is now working on a long-range property management plan for the dealership expansion – a plan that is now required for state approval before former redevelopment agency property may be sold.
“We have recently taken that particular plan to our successor agency, which is the City Council, and it is now going to go to its next step, which is the city’s oversight board to the successor agency,” said Assistant City Manager Jason Kruckeberg.
The Arcadia City Council is designated as the successor agency over the former Redevelopment Agency’s assets. However, the oversight committee – which includes representatives appointed by the mayor, the county and the community college chancellor’s office – may overrule any decisions made.
If approved by the successor agency, the property management plan for the potential Rusnak expansion will be submitted to the state’s Department of Finance. According to Kruckeberg, until that document is approved by the state, the city cannot negotiate the sale of any land.
“We are very much interested in still doing that deal, and Rusnak, I believe, is still interested in doing that deal, but that’s where we are,” said Kruckeberg. “We are really caught in the state’s legal process.”
Kruckeberg noted that the oversight board would meet around mid-December, depending if they have a quorum.
The current property plan that the city has been working on for the last two years includes the former Church of Arcadia site at 21 Morlan Place, which is currently the property directly behind the existing dealership at 55 W. Huntington Drive. The city is currently leasing property to Rusnak for a parking area there.
Other land involved in the plan includes property at 121-159 North Santa Anita Avenue, where the city has relocated the former tenants of two buildings. “The properties there are slated for demolition, and ultimately we’d like to be able to do a deal there with those properties,” he said.
At the Jun. 19 oversight board meeting of the successor agency, Kruckeberg, who is chairman of the oversight board, informed fellow board members that the disposition of the former Redevelopment Agency’s commercial properties have been primarily a part of the potential deal with Rusnak.
Kruckeberg informed the board that “staff has been in negotiations with Mr. Rusnak for years before the agency was dissolved and the negotiations have picked up again since the city has a new city manager on board.”
According to the minutes of the oversight board meeting, staff will likely come back to the board with information on the potential deal points of a purchase and sale agreement that would come before the board and then to the DOF for their approval.
Formerly located in Pasadena, the dealership moved to Arcadia in 2002. In 2005, Arcadia signed an agreement with Rusnak, assuring the dealership that it would attempt to secure five adjacent properties, about 4.5 acres in total, for future development.
The dealership was obligated to fulfill the minimum capacity requirements of Mercedes-Benz USA. If the dealership failed to acquire a necessary 14 acres, Rusnak would have to look elsewhere for business, causing a significant revenue loss for the city.
Rusnak Mercedes-Benz offers a large inventory of high-performance luxury cars including the Mercedes-Benz sedans and coupes, SUVs and crossovers, roadsters and supercars, including hybrid models.

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