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redevelopment

When a city or state agency decides to redevelop an area, it uses its eminent domain powers to buy properties and move existing businesses and residents out.

That can be traumatic for business owners, many of whom have spent decades establishing a local clientele. It also leaves them feeling bewildered about how to get a fair deal from the government.

Enter Redevelopment Consultants of America.

The Burbank-based company has discovered a growing niche that includes such services as appraisals of real estate and equipment, filing of documents with government agencies, identifying and securing a new location for the business, and representing the business in court if necessary.

“We take you cradle to grave here,” said Tony Solis, president of the 19-year-old company and a former staff member with both the Oxnard Redevelopment Agency and the California Department of Transportation.

Redevelopment Consultants represents clients throughout the state. “We go anywhere that we figure there’s a dollar in it,” said Cliff Beck, vice president and founder of the company. The 74-year-old Beck recently stepped down as president.

Currently the firm is involved in the neighborhood just north of the future Staples Center arena in downtown Los Angeles; the area paralleling the Alameda Corridor project between the ports and downtown L.A.; and an area in South Gate where the Los Angeles Unified School District is building a new elementary school and middle school.

Redevelopment Consultants has five clients in each of those three redevelopment areas, according to Randy Nielsen, a relocation and planning consultant with the firm.

Outside the L.A. region, Redevelopment Consultants represents clients in the area surrounding an extension of the Bay Area Rapid Transit railway in San Francisco.

Nielsen said an important part of the job is assisting small businesses unsure of how to deal with a large bureaucracy. “We’re trying to make it as painless as possible for the ‘displacees,’ ” Nielsen said.

Beck stressed that the firm is not a public-service agency and only takes on clients that will bring profits. “We get a lot of satisfaction in helping people, but money is the main motive,” he said.

Profits have varied from year to year, corresponding roughly with the number of redevelopment projects being done throughout the state. In turn, the number and size of such projects correspond with local economic conditions.

With the California economy on the upswing, Redevelopment Consultants has generated revenues of about $1.2 million so far this year, up from $783,000 in 1996.

The company, which does most of its work on a contingent basis, has two methods of charging its customers: on an hourly basis, with rates ranging from $25 to $300, and on a percentage basis. Most customers prefer the percentage, Nielsen said.

Representing a single client generates anywhere from about $11,000 to as much as $250,000 in revenues.

For percentage-based customers, Redevelopment Consultants only gets paid a percentage of the money received by the client that is above the initial amount the city or state offered.

In a typical situation, a redevelopment agency presents the business with an offer. If the business owner doesn’t deem it fair, Redevelopment Consultants will negotiate with the city. Once a settlement is reached, the company receives 25 percent of whatever the client receives over the initial offer.

If a settlement is reached, Redevelopment Consultants’ involvement typically lasts from eight months to a year. If the matter goes to court, the firm’s involvement can last up to two years.

The firm’s six employees primarily do research, handle paperwork and locate new clients. For such specialized services as eminent domain law and equipment appraisal, the company has contracts with outside specialists.

“In most cases, the redevelopment agencies keep it kind of hush-hush,” Nielsen said. “They don’t want attorneys to find out, and they don’t want us to find out.”

Scott Anastasi, vice president of Anastasi Construction Co. Inc., was a client of Redevelopment Consultants for seven years as Anastasi Construction’s supply yard was being displaced by a Hawthorne Redevelopment Agency project.

“They were excellent,” Anastasi said. “We had a great working relationship. They certainly know their craft and the ins and outs of how to present these intricate cases.”

Anastasi said Redevelopment Consultants got his company about 50 percent more money for its land than the city of Hawthorne had first offered. “They presented a great case and we got a substantial upgrade of what the city offered us, which was typically a low-ball offer,” he said.

But not everyone is complimentary.

“It’s looks kind of like ambulance chasing,” said Michael Baitti, principal associate with Redondo Beach-based Meyers & Associates, which provides relocation services to city redevelopment agencies. (He was not familiar with Redevelopment Consultants in particular.)

Nielsen said his company is not stirring up displacees, but rather protecting them from agencies that often are trying to buy them off for as little money as possible.

“Generally, (government agencies) have an agenda, and their agenda is to purchase these properties for the least cost possible,” Nielsen said.

Spotlight

Redevelopment Consultants of America

Year Founded: 1978

Core Business: Providing consulting services to businesses being displaced by redevelopment projects.

Top Executive: Tony Solis, president

Revenues in 1993: $912,000

Revenues in 1996: $783,000

Revenues in 1997 (to date): $1.2 million

Employees in 1993: 8

Employees in 1996: 5

Employees in 1997: 6

Goal: To protect clients’ rights, maximize clients’ benefits and reach as many “displacees” as possible.

Driving Force: An increase in the number of redevelopment projects being undertaken as the California economy improves.

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