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Sunday, Oct 1, 2023

LAND–Majestic Wins One, May Lose Another

Deal for Northrop Site on the Rocks

Majestic Realty Co. has been working for months to purchase Northrop Grumman Corp.’s B2 plant property in Pico Rivera, and redevelop it as a 200-acre industrial and retail complex.

But that deal is now in limbo, with Northrop talking to other potential buyers, much to the chagrin of city officials who are eager to swiftly replace the jobs and tax base lost by Northrop’s coming departure.

“The last time we met with Northrop, they told us they would make an effort toward closing the deal with Majestic,” said City Manager Dennis Courtemarche. “It doesn’t appear Northrop is interested in breaking the logjam. They ignore us like we don’t matter.”

Among the parties Northrop is said to be negotiating with is Lowe Enterprises, which is buying 105 acres in Hawthorne from Northrop.

Northrop’s management committee agreed to enter into negotiations to sell the Pico Rivera property. The sale was to be transacted in two parts, with Majestic initially purchasing 40 acres, followed by the balance, 160 acres. But the 160-acre deal never went into escrow because of various issues.

“The way it was packaged by Northrop was, it’s just some business issues that needed to be ironed out and they would move forward,” Courtemarche said.

Then recently, negotiations between Northrop and Majestic broke down when Northrop raised its asking price by about 25 percent. It has come down a little since then, but the two sides are still at an impasse.

“We tried very, very hard to pay the maximum possible price and we were open with Northrop about how it was arrived at,” said Brook Morris, an executive vice president at Majestic. “We were surprised they said, ‘Thank you very much, we’ll compare it with something different.'”

Northrop spokesman Jim Hart said the company is open to talking to any interested parties. But city officials said any deal that doesn’t include Majestic would result in dangerous delays. “We’re ready to move forward,” Courtemarche said. “If they substitute a different developer, we’re starting from ground zero and we’ll miss the market.”

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