Zoning Twist Blindsides Owner, Derails $4M Deal in Palmdale

PALMDALE, CA, April 24, 2025 /24-7PressRelease/ — A zoning reclassification in the City of Palmdale has been cited as a key factor in the collapse of a $4 million commercial property sale, with the property owner reporting that no formal notice of the change was ever received.

The property, located at 38940 Trade Center Drive, spans 22,680 square feet and was originally purchased under a broad “Mixed Use” designation more than a decade ago. The building was originally used by Tarps Plus, a tarps company and had also served various tenants over the years, including Vivint Solar, now a subsidiary of Sunrun Inc. In 2024, the owner entered escrow with a buyer intending to use the space for light manufacturing.

However, the City of Palmdale informed the involved parties that the property was now zoned “Medical Flex,” which does not permit the intended manufacturing use. According to documentation reviewed by the owner, the zoning change had occurred several years prior, but the owner states no formal notification was provided at the time.

Following this revelation, the buyer withdrew from the transaction, and the property was ultimately sold in early 2025 for $3 million—roughly $1 million less than the initial offer.

Further details provided by city officials indicate that a past tenant, identified as Sunrun Inc., may have submitted a business license application under a use category not aligned with the property’s original zoning. This discrepancy, according to the city, contributed to the loss of the building’s nonconforming use rights.

Legal professionals familiar with the situation are now examining whether the lack of notification could constitute a due process issue under California law. Some have suggested the events may warrant further legal scrutiny, including potential claims of inverse condemnation.

“This situation underscores the importance of clear communication between municipalities and property stakeholders,” said a commercial real estate analyst not affiliated with the case. “Transparent zoning practices help prevent these types of financial disruptions.”

The City of Palmdale has not yet publicly commented on the matter. Legal analysts and industry observers continue to monitor the case for broader implications related to municipal zoning practices and property rights.

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