Reverse by city council to stall San Fernando Project.

The city of San Fernando announced with great fanfare last month that it had cleared a key hurdle in attracting what would be the first project in a long-term effort to redevelop the commercial core into a shopping destination.

It entered into an agreement to exclusively negotiate with Burbank-based V.G. Industrial to develop a $20 million retail center to be anchored by an 18-screen Sanborn Theatres multiplex and a La Curacao appliance and furniture superstore.

But now the deal is off, and the various sides are squabbling.

On the advice of its attorney, the City Council had reached its agreement with V.G. Industrial in a closed session, an action that some critics say violated the state's open-meeting laws.

In response, the city has fired its attorney, pulled the plug on its exclusive deal with V.G. Industrial, and opened the bidding back up to all interested parties.

The turn of events has left some city stakeholders scratching their heads.

Ron Meadow, owner of a furniture store called La Popular and a member of the San Fernando Chamber of Commerce and Mall Association of San Fernando, said the closed-door vote had bothered him.

"It's a little bit scary for people when big changes are happening and they have no say," Meadow said.

City Administrator John Ornelas insisted the closed-session vote did not violate state laws and that the primary reason for starting the bidding process anew was that three of the five council members are newly elected and wanted more time to consider redevelopment options.

"The council reflected on this and decided it was a major decision and, rather than rash into it, they just wanted to be comfortable," Ornelas said.

Already, another proposal has been submitted by San Fernando-based Pueblo Construction and Pacific Development Partners for an eight- to 10-screen theater complex with restaurants and coffee shops.

Ornelas said that plan, V.G. Industrial's and any others will be subjected to a series of public hearings slated to be held in the coming months.

City Council members and officials with V.G. Industrial and Pueblo Construction did not return phone calls seeking comment.

The city's redevelopment, targeted to occur along its commercial corridor, San Fernando Road, over the next 12 years, calls for turning what Chamber of Commerce President Joe Sandoval terms a "two-mile strip mall" into a "pedestrian-friendly center."

Over the next decade, officials hope to add restaurants, bookstores and cafes to the area's already-concentrated mix of furniture, bridal and jewelry shops.

As is the case with most redevelopment efforts, the San Fernando project is causing some concern among existing business owners. Even city officials concede that they will likely have to use the city's power of eminent domain to buy out and relocate existing businesses and assemble parcels large enough to accommodate new projects.

Sandoval characterized the fears of local business owners as reactionary, and based on a misunderstanding of the city's plans. "There may be changes in the nature of businesses in the area, but that will be far outweighed by the revitalization (of the overall community)," Sandoval said.

In the coming weeks, the city will hold workshops and take testimony from local business owners.

Furniture store owner Meadow argues that the new projects should be occupied only by retailers that do not directly compete with existing businesses. He's especially concerned about La Curacao, which would directly compete with his business.

"My problem, in addition to it being competition to me, is they're bringing in more of the same," Meadow said. "I don't think that's going to make the area much better."

Yet everyone seems to agree that redevelopment of some kind is needed. Dennis Levine, owner of the People's Store and a former member of the San Fernando city Planning Committee said he doesn't care where the initial redevelopment project is located, as long as it gets built.

"People are complaining about losing business; well, business is lousy anyway," he said. "The strong will survive."