PALMDALE MAY BUY, THEN RESELL LAND.

Byline: Jim Skeen Staff Writer

PALMDALE - City officials are working on a plan to free up 60 vacant acres in the Trade and Commerce Center on which development has been stymied by $36 million in delinquent tax and assessment liens.

The aim is to reduce the cost of the land - on which back taxes and penalties amount to several times its worth - to a potential developer or company, though city officials won't name any companies as interested in the property.

``There are developers that are trying to put together deals,'' Mayor Pro Tem Jim Root said Thursday. ``When you get to the point where we are at now, there's soup being created in the kitchen.''

Under the proposal to come before the City Council on Monday, the city would acquire the land - lost by its previous owners for unpaid taxes - from Los Angeles County for $7,200, which would cover the county's administrative costs.

The land would in turn be sold to Palmdale T and C Partners, LLC, a subsidiary of the original underwriters of bonds that financed streets and utilities in the area west of the Antelope Valley Freeway.

If the proposal is approved by the City Council, the deal still must be approved by Los Angeles County.

The debt on the land, which includes $2.5 million in county penalties, places the cost at $14.46 per square foot while its ``debt-free'' value is $4.85 per square foot.

The proposal covers 18 parcels in an area generally bounded by Avenue P-8, Avenue Q, 10th Street West, and Fifth Street West.

At the same meeting, the City Council will vote on authorizing a submittal to the county to acquire the property, with the county waiving the $2.5 million in penalties that have accrued on the land since the early 1990s.

The proposed agreement with Palmdale T and C Partners calls for the city to use its best efforts to cause a ``workout'' of the assessment district debts as soon as practical to refinance the outstanding assessment liens. The city would not be responsible for any bond debt.

``Once the reduction of liens and anticipated refinancing is complete, the site will once again become economically attractive and the city expects all parcels to return to private hands and for development to proceed,'' according to the proposed submittal to the county.

The delinquent tax and assessment issue revolves around bonds sold in 1989 and 1990 to finance $63.9 million worth of improvements such as roads, utilities, storm drains and landscaping in the area.

The improvements were aimed at speeding up development, but they were completed just before the deep 1990s real estate slump hit the Antelope Valley.

The bonds were secured by land in the assessment districts. In the mid- 1990s, bond payments began to be missed, and foreclosure proceedings began on dozens of parcels. Foreclosure sales have been unsuccessful because of the debt owed on the properties.

Palmdale T and C Partners is a subsidiary of Stone and Youngberg LLC, the original underwriters of the assessment bonds.