JUNE 20, 2014
DEVELOPED AND REDEVELOPED
Movin’ on up
Sean Belk Staff Writer
For nearly a generation, oil production was the mainstay in Signal Hill. But, when oil extraction and the tax revenue associated with it started drying up in the late 1960s and early 1970s, the City took efforts to recapture a past vision for hilltop homes and a thriving business district. Long before Signal Hill became famous for the discovery of oil in 1921, the hill was best known for its sweeping views of the Southland. According to historians, Native Americans used the hill’s 365-foot height to signal to other tribes on Santa Catalina Island and elsewhere. Spanish settlers were the first to give the hill its name, “Loma Sental,” which translates to “Signal Hill.” Others believe that early smugglers used the hill as a natural lookout. The hill’s first owner of record was Don Manuel Nieto, who acquired the land in 1784 as part of a 300,000-acre grant from King Carlos III of Spain. Nieto later split the acreage into six cattle and horse ranches, two of which covered Signal Hill: Rancho Los Alamitos and Rancho Los Cerritos. In the 1800s, members of the Bixby family purchased the land to raise sheep. At the turn of the 20th century, a few mansions had taken root on the hilltop. G. W. Hughes, president of the Signal Hill Improvement Co., saw value in building luxurious homes, given the hill’s panoramic view of the Los Angeles basin. Lewis Denni, who founded a cheese factory, purchased a home from Hughes that was built in 1915. Hughes described Signal Hill in a brochure as “the most beautiful home site in Southern California,” depicting the hill as a place “swept by alternating breezes from both the ocean and the mountains, where peace, plenty and prosperity reign undisturbed, and nature is always at her best.” But, when oil was discovered in 1921, the plan for hillside dwellings came to a halt. The oil boom made property owners rich. Andres Pala, who owned a three-story pink mansion on the hill, leased his property to an oil company. It was estimated that the value of his property jumped from $15,000 to $150,000 after oil was discovered. The Denni property was torn down and sold for a 50-percent royalty. Oil operations also pushed residents out of their homes as oil and rocks rained down onto properties. Signal Hill incorporated as a city in 1924 (with a population of just about 1,800 residents) as a way for property owners to avoid a higher per-barrel tax on oil proposed by Long Beach, which had plans to annex the land. However, many decades later, as oil production began to diminish, a new era began. In the early 1970s, a Shell Oil Company representative brought up the prospect of forming a redevelopment agency, which would allow the City to bond against development projects with the chance to clean up oilcontaminated land and boost property-tax revenue. The City would be able to use a portion of the increase in property taxes to then provide developers with incentives to fund more projects. Keaton King, a longtime Signal Hill resident who was born the same year the City incorporated and served on the Council for two terms, recalls those early discussions about forming the redevelopment agency.
“[The Shell Oil representative] talked to me and said, ‘You got to get this thing because the tax [revenue] from oil is going to end pretty quickly,’” King said. “He said, ‘if you get this tax, you automatically get a lot of money from the redevelopment agency.’ So I said, ‘fine.’” With Signal Hill being a “no/low property tax” city (only receiving .6 percent of property-tax revenue), the thought was that redevelopment would be a boon for the City. King and a few other councilmembers pushed for the City to form a redevelopment agency, but not everyone on the Council was on board. The idea of having the City condemn run-down properties through eminent domain to build tax revenue-generating development wasn’t appealing to some councilmembers and property owners, he said. “The redevelopment agency kind of had a bad name,” King said. After a turnover on the Council and two years of debate, the Council, in 1974, voted unanimously to form the Signal Hill Redevelopment Agency (RDA) under the condition that homes couldn’t be condemned. One councilmember, Bill Mendenhall, originally voted no but eventually changed his vote after the Council got the three votes required for approval, King said. The first check the City received from redevelopment was $76,000, and the City’s full share of extra property-tax income at the time was about $200,000 a year, King recalls. “We had a lot of new development going on in those days,” King said. “Of course, as soon as we got the money and started cleaning up the property, we got a lot more income. We never got that kind of money from the oil tax.” Since then, the City’s redevelopment agency has spent a total of $17 million in acquiring properties and $15 million in environmental cleanups, according to city records. With incentives from redevelopment funds, developers began building residential homes on the hill again as the City’s population continued to grow. In the 1980s, however, some residents, including Councilmember Michael Noll, fought a plan for high-density condominiums that didn’t include any parks or trails. “They were building condos everywhere,” said Noll, who has been on the Council for 28 years. “It was high-density without the parks, and I thought, ‘This is a diamond in the rough. If I don’t get involved and work on making it better, then I have myself to blame.’” The development proposal was eventually changed with a lower-density residential community integrated with nearby parks and trails for the public to enjoy. Redevelopment also grew the City’s sales-tax revenue by attracting larger retailers, such as Home Depot, to town. The first major effort was drawing Price Club (now Costco) to a shopping center at Willow Street and Cherry Avenue that was formerly an industrial area. At the same time, oil companies had developed new technologies through a water-injection system to consolidate operations and shrink their oil-well footprint. Signal Hill Petroleum, which acquired most of the oil holdings and property on the hill, began working with the City and the RDA through a partnership to build more retail shopping centers and residential developments during the last three decades.
SIGNAL TRIBUNE
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Courtesy City of SH
A 2002 photo shows construction of new homes on the hilltop. A plan to build luxurious hillside homes was halted during the 1920s after the discovery of oil, however houses eventually returned after oil production subsided in the late 1960s and early 1970s.
This partnership made it possible for much of the commercial development that exists in the city today, including the Signal Hill Auto Center, Town Center East and the Signal Hill Gateway Center, and many others. Redevelopment has enabled the City to acquire and clean up land that otherwise would have remained empty since much of the property was owned by individual shareholders from the oil-speculating days. Also, much of the former oil land is assessed at a low or even negative Courtesy City of SH value because of the requirements for cleaning up oil wells that can cost any- New hillside homes near Stanley Avenue are pictured in this photo taken in 2002. where from $120,000 to $800,000 for Before becoming famous for the discovery of oil in the early 1920s, Signal Hill was each well. best known for its sweeping, panoramic views of the Southland. “If it hadn’t been for redevelopment, we’d still be looking almost like we did back then, with metal buildings and a lot of storage yards,” Noll said. “We wouldn’t have all those developments because we would run into old oil pipes and wells that hadn’t been abandoned. It was just a mess. Our early forefathers really helped to spur it on with redevelopment, and we played within the rules.” Since the State abolished redevelopment nearly three years ago to fix a budget deficit, the City of Signal Hill is Courtesy SHHS now working to dismantle the agency’s The top half of a two-story home is being relocated into a new historic district in Signal Hill. The home was previously located on Long Beach’s ocean edge and was moved to make way for a high-rise condominium project. assets. As the Successor Agency to the former Signal Hill RDA, for sale. It’s still very (below) A historic two-story home (back center) on the City, which now has a population of valuable but it’s going to Burnett Street in Crescent Heights still exists today, more than 11,000 residents, hopes to take someone who has however the homes above it (back right) and the homes eventually sell four city blocks of some knowledge on oil (front center) on Creston Avenue were lost after being vacant land along Spring Street because there are still a pushed out by oil production. between Atlantic and California lot of active oil avenues to Signal Hill Petroleum, wells on it … which owns the mineral rights to the there’s a lot property. The City plans for the devel- going on, but we opment to include a hotel, office build- have to look at ings and retail establishments on the new ways for land near Memorial Hospital. How- developing propever, without redevelopment incentives erty because we to pay for oil-well cleanups, the process don’t have redefor moving the project forward will velopment to do it.” likely be slow, Noll said. “We’re moving along, not as quickly as we’d like to, but there’s progress being made,” Noll said. “As soon as Courtesy SHHS [the State] releases that property, we can put it up
Courtesy SHHS
Courtesy SHHS Andres Pala estimated that the value of his pink, three-story mansion (left) near the crest of the hill jumped from $15,000 to $150,000 after oil was discovered in 1921. A home (right) owned by Lewis Denni next door was A home purchased by Lewis Denni, the founder of a cheese factory, was built on the hill in 1915. torn down and sold for a 50-percent royalty. An oil company later purchased the Pala mansion, and it served However, the home was eventually pushed out by oil operations. The site is where the current Promontory Homes exist today. as an office for several years.