A developer once thought to be a contender for turning around the struggling Valley Plaza shopping center in North Hollywood appears to be out of the picture now that his bid to acquire a key parcel has fallen through, sources said.
Developer Ira Smedra was in escrow to purchase the quake-damaged J.C. Penney Co. building, but brokers for the owners confirmed that the five-acre site is back on the market.
"The property is not being sold to Mr. Smedra, and we're entertaining other offers," said Steve Weiss, a broker with Capital Commercial.
Weiss declined to say why the deal fell through. Smedra, who runs Arba Group, wouldn't discuss the situation.
But sources said the Los Angeles developer had difficulty gaining control of a common parking area he needed for his big-box retail project.
Smedra's exit from Valley Plaza could give developer J.H. Snyder Co. the edge as the city's Community Redevelopment Agency prepares to solicit proposals from developers willing to undertake a $130 million overhaul of the shopping center. Snyder is in escrow to acquire about nine acres of the 40-acre Valley Plaza site and is talking with other owners at the strip mall.
The long decline of the shopping center was exacerbated by the 1994 Northridge earthquake, which resulted in the Sears store being closed for a year for remodeling and the Penney building remaining vacant.
Despite a prime location along the Hollywood (170) Freeway, no developer has been able to pull together a replacement project. That's because Valley Plaza was subdivided early on, and now its many owners more than 30 individuals and groups can't come together on the terms of such a deal.
At one time, Smedra had the owners of 70 percent of the site interested in selling, but the deal unraveled when the developer began reducing his offer.
Bad feelings between the property owners may have contributed to the developer's problem assembling enough space for the big-box retail project he was said to be planning on the 5.6-acre Penney site. Part of the parking area at the site is jointly controlled by several owners who sources said rejected Smedra's proposal to relocate the common parking area.
The problems of Smedra and other developers prompted the CRA to take over the redevelopment project in February.
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