For the last two years, the 2.4-square-mile city of San Fernando has been in an uphill battle to turn itself from a Latino small-business mecca into a center for big-name retail development.

But the ambitious redevelopment plan has so far resulted in little more than some new entrance signs on the city borders. Virtually no new retail stores have agreed to relocate to San Fernando, though leaders say they are still in discussions with interested developers and business owners.

“This program is at its infancy,” said City Administrator John Ornelas. “We’ll see a lot more happening now.”

Last year, the city’s centerpiece project, a downtown retail/entertainment center with a 14-screen multiplex and 200,000 square feet of retail shops and entertainment venues, stalled amid infighting among the City Council, a questionable bidding process, complaints from local businesses about a lack of information on the plan and a pullout by the city’s chosen developer.

More recently, plans for another key project to turn a 36-acre swap meet property into a big-box retail center were halted when the property owner decided not to sell.

Despite the setbacks, the city insists things are turning around.

Next month, officials will put out a request for proposals seeking a new developer for the downtown theater project, which the city expects to award early next year. Ornelas said the yearlong delay was needed to refine the development process.

And in what could be one of its first retail successes, the city has pledged $125,000 to bring a Starbucks Coffee outlet to town at the Truman/Mission Plaza Shopping Center. Ornelas said the company is in negotiations to build one of its signature drive-through outlets there.

City leaders have also embarked on several other projects to try to spark retail revitalization, including a $1.6 million streetscape project to make Maclay Boulevard more pedestrian-friendly and attractive to businesses.

Aggravated merchants

The long delays have seriously frustrated San Fernando’s business community. Last summer, members of the San Fernando Downtown Business Association began attending City Council meetings as a way to pressure the city to move forward.

“There was a period of time where there was no activity going on,” said Dennis Levine, co-owner of the People’s Store furniture outlet, and former president of the association. “We wanted to see, if we maintained our presence, if we could get the city to speed up.”

That show of force, along with a string of complaints from business owners, have changed the way the city deals with the business community.

City economic development staffers now meet weekly with business owners downtown. To show business owners how successful a downtown project could be, the city hosted the San Fernando Fiesta on Easter Sunday, a farmers market-type festival that brought 18,000 people to the downtown area. The city now plans to host a weekly fiesta throughout the summer.

“It shows that a development could do the same thing,” said Mayor Silverio Robledo.

Levine said business owners have noticed and appreciate the city’s effort.

“There was kind of a general idea that it was business as usual and just words,” Levine said. “But when the city came and took over the fiesta and became active, I think it says a lot.”

Looking for sales taxes

Like most cities in California, San Fernando gets the majority of its revenue from sales taxes. Even a small presence by big retail stores could have a significant effect on the city’s annual budget of $4.3 million, meaning city services could be improved. City officials believe that a single big-box retail project could generate an additional $1 million a year in sales tax revenues for the city.

Martha Diaz Aszkenazy, chairwoman of the San Fernando Chamber of Commerce and owner of Pueblo Construction, said she understands the city’s reasoning in seeking retail stores for the sake of sales taxes. But she said the chamber would like to see the city do more to attract industrial businesses that offer high-paying jobs.

“Our thing is to keep this area stable,” Aszkenazy said. “We want it to be strong so the community can buy from the retailers.”

The chamber has begun its own effort at revitalization. It is working to lure manufacturing firms by marketing potential factory sites and referring interested companies to the city Economic Development Department or area real estate brokers.

The city is involved in similar efforts. It has set up a Web site featuring photos and fact sheets on available properties in San Fernando. “We’re kind of functioning as a broker,” Ornelas said.

The city has achieved some success at enticing manufacturers to relocate from neighboring parts of Los Angeles, though Ornelas said that is not a top priority. Earlier this year, Earth Corp., a printing products maker, moved its 200 workers to a 50,000-square-foot property on Truman Street. In January, Hyper Cell, a maker of cell phone accessories, moved into a 40,000-square-foot facility on the southeast side of the city.

Over the last year, 132 new businesses, most small, have relocated to San Fernando. The city has attracted many of them because of its lower business taxes and lack of utility taxes, according to the city’s Economic Development Department.