Genesis L.A., the program Mayor Richard Riordan launched 13 months ago to revitalize 15 inner-city sites, is off to a roaring start on paper.
To date, according to Riordan administration officials, about $238 million in private investment has been committed in development deals signed at the Genesis sites. Those developments are projected to create 4,300 jobs. That’s most of the way toward the administration’s goal of having $250 million worth of deals creating 5,000 jobs signed by the time Riordan leaves office in June 2001.
“If all these commitments hold up, that’s a significant feat,” said Larry Kosmont, an L.A.-based economic development consultant. “In the past, it has been typically very difficult to get anywhere near that amount of private development dollars committed to inner-city development.”
The challenge, of course, is translating these commitments into completed projects. The private sector has a long history of not following through on its inner-city commitments.
And despite the impressive commitments to date, some Genesis L.A. projects have become mired in controversy or have stalled out in the tough economic environment of the inner city.
Successes and failures
Among the more successful Genesis sites is Taylor Yard, once a major rail yard along the Los Angeles River. Last year, a metal manufacturing business, Nelson Nameplate, set up shop there, with plans to create up to 500 jobs. Federal Express also has set up a facility on the site with 100 jobs.
Another 60 acres on the site is being developed as a media and technology center by Legacy Development. And Lennar Partners is in negotiations with the city over a 40-acre portion of the site, where it plans to build an 18-to-20-screen theater complex, 650,000 square feet of industrial space and retail shops.
Yet the success of this site is not entirely due to the Genesis plan. In fact, work on the redevelopment of Taylor Yard has been going on for years, and several of these projects would likely have been finalized without the Genesis plan.
Last month, Trammell Crow Co. purchased one of the other Genesis sites, the 24-acre former Marquardt Co. defense industry parcel near Van Nuys Airport. Trammell Crow plans to turn the site, which it purchased for $23 million, into a light industrial and high-tech manufacturing center that could support up to 1,200 jobs.
And some of the turnaround may be quick: Two existing buildings on the site are already being renovated and could be ready for occupancy next month.
Meanwhile, at the 208-acre Goodyear Industrial Tract at Slauson and Central avenues, two business expansions are underway. United L.A. Alloys Inc. has agreed to acquire three parcels behind its existing facilities, and Apex Pattern Co. is going to expand on about two acres.
At the 16-acre former Crown Coach site in East L.A., where a prison was slated to open in the mid-1980s, the city put out a request for proposals three months ago and has received 10 proposals. “The hard part is going to be choosing a developer,” said Rocky Delgadillo, deputy mayor for economic development.
But other sites have not fared so well. Perhaps the biggest disappointment to date has been Santa Barbara Plaza in the Crenshaw District, where a partnership led by former Los Angeles Lakers superstar Earvin “Magic” Johnson tried to redevelop the rundown plaza.
But the two main anchor tenants, Wal-Mart Stores Inc. and Home Depot, pulled out last summer, deciding to go elsewhere. A few weeks later, the Community Redevelopment Agency chose to end its exclusive negotiations with Johnson Development Corp., essentially sending the site back to square one.
And proposals to develop two other Genesis sites have been met with opposition. One of those is the Cornfield, a 50-acre abandoned railroad yard between Dodger Stadium and Chinatown.
Majestic Realty Co., the company of Staples Center developer Ed Roski Jr., put forward plans for light industrial facilities and warehouses that would employ up to 1,000 people. Majestic won the support of Mayor Riordan and local Councilman Mike Hernandez. But a group of Chinatown residents and open-space advocates are opposed to the plan, igniting a firestorm of controversy and threatening to tie up the project for years.
The other site facing opposition is the so-called Lancer parcel in the Harbor area. Developer Ralph Horowitz has proposed a light industrial park of primarily textile-industry tenants and is in exclusive negotiations with the Port of Los Angeles.
But the state Tidelands Trust, which governs port operations, has raised concerns about that proposed development.
Investment fund on track
Meanwhile, the other half of the Riordan plan, the creation of a private-sector fund to invest in various inner-city projects, is set to complete its first round of $75 million in raised funds within the next 30 days.
While that’s about four to six weeks behind the original target date, it still represents substantial progress, especially considering that several investors were initially wary of the Riordan proposal.
“When you are dealing with this many investors, companies tend to be a little bit bureaucratic. It takes some time,” said Gene Krieger, vice chairman and chief operating officer of Shamrock Holdings Inc., the Burbank-based private fund manager selected to manage the fund.
Five financial institutions have committed to pony up $10 million each: Bank of America, Washington Mutual, Wells Fargo Bank, U.S. Bancorp and Union Bank. Fund administrator Shamrock and Far East National Bank put $5 million and $3 million into the fund, respectively. And three other entities, the Sacramento-based nonprofit Nehemiah Community Reinvestment Fund, California Federal Bank and the Los Angeles Community Development Bank, have also added to the fund.
