Case Studies

City of South Gate – Azalea Shopping Center

Azalea Letters
Client:  City of South Gate
Date:  2007 - 2014

Market Study and Public Private Transaction Negotiations

Economic Element: Kosmont Companies drafted the Economic Element of the City’s comprehensive General Plan update. The ultimate objective of this assignment was to create a roadmap for the City to follow in the coming years which would deliver the basis for sound fiscal decisions. The General Plan was adopted by the South Gate City Council.

Retail Market Study: Kosmont prepared a market study to analyze and identify the retail market potential for the City, and illustrate the level of retail leakage experienced by South Gate. The Study was intended to assist the City in assessing whether new retail development was appropriate and to help proposed projects fulfill unmet market demand. The Study also provided the City with the basic market factors, which assisted in developer and retailer evaluation of opportunities within the City of South Gate.

Azalea Regional Shopping Center: This project, located in South Gate, California is approximately 370,000 square foot regional promotional and entertainment retail center on 30 acres. Kosmont led public-private negotiations on behalf of the City of South Gate. In addition, Kosmont developed the developer RFQ, helped the City select a development team and ultimately negotiated the Development Agreement. Kosmont also prepared an Urban Decay Analysis that evaluated the local demand for the various types of retail within the proposed project, compared that demand to the available retail amenities within the City and surrounding communities, and estimated the impacts this proposed project might have on local retailers.

Kosmont prepared a Comprehensive Economic Development Strategy (CEDS) on the City’s behalf as an essential measure for the successful acquisition of approximately $2.5 million in U.S. Economic Development Administration (EDA) Grant funds for the Project. In May of 2012, Kosmont successfully negotiated and executed an Infrastructure Financing Agreement to fund off-site improvements necessary to make the project feasible. Kosmont subsequently served as financial advisor in the issuance of approximately $34 million in Water Utility Bonds (A- rating) at a True Interest Cost (TIC) of 4.35% to fund public improvements. The project had its grand opening in August 2014. CEDS for this project was successful and approved by the USEDA.

This project created approximately 1,400 permanent jobs and the City is reporting $2.5+ million in sales tax.

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