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Rusnak Expansion Deal Gaining Momentum

The deal would guarantee Arcadia receives at least $800,000 a year in sales tax for the next decade.

A deal to expand Rusnak Arcadia that was stalled by a California Supreme Court Decision to dissolve the state's redevelopment agencies has begun picking up speed.

As the designated successor agency, the city has taken over all its former redevelopment agency's assets, including the parcel earmarked for the Mercedes Benz dealership.

But before the city can sell the land to Rusnak, the state Department of Finance must approve the property management plan submitted by the city.

However, the city returned the remainder of the $7.5 million it had in redevelopment funds to the state this week, so that approval may get fast-tracked, Assistant City Manager Jason Kruckeberg said, which would propel the Rusnak deal back in motion. 

"We're just waiting for the state," Kruckeberg said. "We're continuing to put pressure on them. We've got some momentum now."

So far, Arcadia is the only city that has settled with the state, city officials say. 

The deal to sell a two-acre site to Rusnak for $2.8 million as part of the dealership's decades-old plan to build a 40,000-square-foot showroom on Santa Anita Avenue would ensure the city receives at least $800,000 in sales tax a year for the next ten years.

Rusnak owner Paul Rusnak says he hopes to ink the deal with the city within the next four months.

However, if the transaction falls through, Rusnak may be forced to move his dealership elsewhere. And as Arcadia's largest sales-tax generator, that would be a huge blow to the city.

"We are one of the few non-performing dealerships in the country," Rusnak said, adding that the lack of space simply does not allow for the volume of business required to make sales goals set by Mercedes Benz.

As a temporary solution, the city is leasing Rusnak the former site of the Church in Arcadia at 21 Morlan Place and a self-storage building at 37 W. Huntington Drive for vehicle storage.

Still, Rusnak says he has lost patience with the process.

"This has been dragging on for years," he said.

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