A modest bicycle shop on Pacific Coast Highway became an obstacle to a major Redondo Beach development in the late 1980s. When its owners refused to sell, developers did not abandon the project. Instead, they built the Redondo Shores Shopping Centre around the shop, leaving the family property as an unusual holdout inside the larger commercial development.
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The property developers could not acquire
According to the Los Angeles Times, the Ernst family owned a property on Pacific Coast Highway where Otto Ernst operated Redondo Cyclery and lived in an apartment above the shop. His parents, a retired couple living in Salem, Oregon, owned the property, while Otto had been living and working there for several years and did not want to move. The property became an obstacle as Redondo Shores Construction Co. assembled land for a new shopping centre.
In October 1989, the Redondo Beach City Council approved the proposed Redondo Shores Shopping Centre, planned for a 5.9-acre triangular site just north of City Hall. The project was designed to contain 104,941 square feet of commercial and office space, including shops, a restaurant and a Mrs Gooch's grocery store. The council imposed 72 conditions addressing matters including traffic, security and the surrounding neighbourhood.
Two adjoining property owners refused to sell. One was the Ernst family; the other was a doctor who owned a small apartment building. Negotiations involved disputes over property lines and construction noise, as well as allegations of threats against workers and claims of adverse possession. The dispute also divided the Ernst family. Otto's brother, Ted Ernst Jr, said Otto had persuaded their parents not to sell and argued that the decision was a mistake. By the time the newspaper reported the dispute in June 1991, the brothers were no longer speaking.
Building around the holdouts
Rather than acquiring the two remaining properties, the developers proceeded with a layout that incorporated them into the larger shopping-centre site. The Ernst property, which housed Redondo Cyclery, and the doctor’s apartment building therefore remained outside the main development. According to a study published in the Journal of Housing Economics , developers assembling land for large projects can face a “holdout problem” when individual property owners know their parcels are important to completing the project and can demand higher prices. The study found that these additional bargaining costs can influence where developers choose to build, sometimes encouraging development on sites with fewer, larger parcels.
Redondo Shores opened in 1991. That same year, the newly opened centre also became a temporary home for another Redondo Beach facility. After earthquake damage forced the closure of the Main Library at Veterans Park, the City Council voted to negotiate a three-year lease for an interim library at the shopping centre. At the time, the centre's tenants included Thrifty, Blockbuster Video and Mrs Gooch's grocery.
Redondo Cyclery was still there
A 1994 Los Angeles Times report again placed Otto Ernst in an apartment inside the bicycle shop on the 400 block of North Pacific Coast Highway. The small business had therefore remained in place after the shopping centre had been completed around it. The resulting landscape contrasted the large commercial complex with the modest bicycle shop that had survived the land assembly and remained within the developed site.
The Redondo Shores project later became a long-running commercial property. In January 2026, a commercial real estate report described the centre as a 107,000-square-foot retail property at 401-417 North Pacific Coast Highway. The property had recently undergone a $6-million renovation and was anchored by Whole Foods, Michaels and Centinela Feed & Pet Supplies. The later changes showed how completely the surrounding site had evolved, while the bicycle shop's survival remained a physical reminder of the property that developers had once been unable to acquire.
