When a developer affiliated with Triple Five Group – owner of America’s largest shopping mall – contracted to buy the Valley’s sprawling Rocketdyne property in 2018, it planned to build residential units on the land.
But the developer has pulled out of the deal, claiming in a lawsuit that, because of the contaminated soil on the Canoga Park property, it would have been decades before it was able to develop that housing.
With the property now back on the market, some stakeholders differ on what they think could be built on the 47-acre parcel and that it could be years before construction breaks ground on the conspicuous property, located in the heart of what is envisioned to be the downtown of the San Fernando Valley.
Choices are limited. A developer could not do any substantial excavation, sources said, which limits the parcel’s use to low-grade commercial or light industrial buildings of only one or two floors. Heavy industry is not allowed and would require wider streets anyway.
“I’ve been getting calls from industrial developers, more oriented to light industrial or research and development,” said Brad Rosenheim, executive director of the Warner Center Association. “A broad range of those types of uses is permitted in the Warner Center and that’s certainly desirable in the region.”
While residential development is being encouraged in the wider Warner Center area, it is, for now, prohibited at the Rocketdyne site. Even after remediation efforts, ongoing contamination persists in the soil on land where rocket engines were once built.
Rosenheim and others have said they do believe something will ultimately pan out.
“There seems to be some very serious interest, and that interest is broad in the spectrum of the types of uses folks are envisioning for the site,” Rosenheim said. “It will be exciting to see where that all comes out in the end.”
Getting here
The site, which previously was the headquarters location of Rocketdyne, has lain vacant for years.
In a web of various transactions that began in 2005, the 47-acre site was demolished and cleared in 2016 and ultimately came under the ownership of Raytheon Technologies in 2020.
The colloquial Rocketdyne site had by 2018 attracted the interest of the Metro Global Group, a limited-liability company managed by Justin Ghermezian of the shopping mall family behind Triple Five Group, best known as the owner of the Mall of America in Minnesota, the largest shopping center in the Western Hemisphere. Metro Global entered into a purchase agreement with then-owner United Technologies for an undisclosed sum. (United would merge with Raytheon two years later.) The site was part of what the Warner Center 2035 plan had identified as Uptown – which was to be a mix of research and development firms, professional practices and density housing – and Metro Global aimed to take advantage of the plan’s incentives to build more residential space than local zoning code typically allows.
However, starting in 2021 that agreement began to fall apart, with Metro Global ultimately terminating the deal on April 9.
In a lawsuit against Raytheon, Metro Global alleges that Raytheon – which had already removed more than 8,900 tons of contaminated soil – had submitted informal contamination surveys to the Los Angeles Regional Water Quality Control Board as part of the process to obtain environmental clearance for the site. The suit also claims that Raytheon entered into a land-use covenant with the water board without the buyers’ consent. That arrangement allowed industrial, commercial and office space on the site — but barred residential development until further remediation was done, according to the suit.
Too late?
By the time Metro Global executives became aware of the extent of work needed to allow residential development, the suit added, a majority of the Warner Center 2035’s build-out of residential units had been allocated – suggesting that by the time all was said and done it would be too late for Metro Global to benefit from the liberal building requirements permitted by the plan.
Attorneys representing Metro Global and Raytheon declined to comment. An answer filed by Raytheon in June to Metro Global’s updated complaint denied the claims.
Rocketdyne was famous for having developed and manufactured, among other models, the F-1 rocket engine and the Saturn V rocket that launched the Apollo modules into orbit. The facility, as part of its arsenal of engineering chemicals and technology, included two small nuclear reactors. Last year, officials with the Water Board told the Los Angeles Daily News that a plume of water containing tetrachloroethene, total petroleum hydrocarbons and trichloroethylene was near the property.
According to exhibits filed with the lawsuit, water officials determined that the lifetime cancer risk associated with the site was 100 times higher than the minimum permissible level for residential use.
Now what?
For now, the property – once pitched by Los Angeles Councilman Bob Blumenfield as a possible West Coast headquarters for Amazon – is back on the market. The Realty Advisory Group is marketing the land, although no price is listed. (Triple Five reportedly had agreed to pay $150 million for the site in 2018, but that figure was not confirmed.)
The property’s size, which puts it among the largest undeveloped parcels in Los Angeles County, could be alluring for an ambitious investor. The perks of being a dedicated part of the Warner Center 2035 plan are a plus. Even when the Warner Center 2035 plan’s permitted build-out residences are met, a developer may still go through the usual bureaucratic channels to propose and build housing in the area. And the real estate sales broker is using the promise of a future Los Angeles Rams headquarters and practice facility nearby as a carrot.
However, with one remediation official speculating in lawsuit deposition that it could take 30 years of work before the site is suitable for residential development, it isn’t immediately obvious who has the money and patience to take it from Raytheon and wait it out for that. For their part, a representative in Rams owner Stan Kroenke’s orbit did not respond to an inquiry as to whether he’d be interested. Kroenke’s organization has already spent $650 million on three nearby Warner Center properties.
Given that heavy industrial use is out and that the region is saturated with retail, it’s also hard to point to an obvious alternative other than the light industrial use or studio space.
One local stakeholder speculated that a medical center might be the best bet, although it would have to be a low-slung development because of the prohibition on excavation.
“It’s a big chunk of land in a high-growth area that is financially in the upper brackets of the city. But the city, especially in the Valley, is also aging,” observed Vahid Khorsand, a Woodland Hills native who formerly served on the Los Angeles Planning Commission. “It’s an area that could be used for medical use geared toward an aging population. I could see that happening a lot sooner than some other type of use.”
Rosenheim was more confident that housing could be developed there, but ultimately felt that the site was attractive for mixed-use offices for film, music or video game production or such operations as advertising or public relations firms.
“Creative office I think would be the more likely type of office space something might be designed for on that site,” he said.