Officials at Playa Capital Co. say they’re hoping the company will be able to move forward with construction at their massive Playa Vista project in the first months of next year.
The problem is, the latest set of environmental reviews for Playa requested by a city committee that must approve bond financing for the project were expected to be completed by October.
Instead, the reviews have dragged on so long that the office in charge of the them, the Chief Legislative Analyst’s Office, has given up on providing an estimated timeframe for how long it might take to get a report together.
The project’s latest hurdle stems from a city budget committee chaired by Councilman Mike Feuer that is waiting for additional environmental reviews before approving the bonds. The CLA’s Office is waiting for state officials to review Playa Capital’s fault-risk assessment and for a consultant to do additional research.
As soon as the CLA’s Office issues its recommendation to the city committee, Playa Capital President Peter Denniston said he plans to announce a number of new deals involving the project that have been inked in recent months.
Some real estate observers have expressed quiet concern that the added environmental review could set a precedent for other controversial projects on environmentally sensitive land.
Although the L.A. City Council has given approval to the controversial Playa Vista project, City Hall has yet to issue virtually any of the required construction permits.
Permits have been issued to Playa Capital to build the first few hundred apartments. In addition, ground has been graded for a site on which 400,000 square feet of commercial space is to be built, and road improvements on Lincoln and Jefferson boulevards are finished. But the permits for most of the rest of the first phase of Playa Vista, another 3,246 residences and 3.2 million square feet of commercial space, are in limbo at City Hall.
Permits have been stopped until the CLA’s Office can analyze conflicting testimony about possible earthquake fault lines, methane problems and health risks that might be related to the development.
“They’re trying to be thorough, and if there’s still questions and disagreements among experts, that’s not useful,” said Jane Blumenfeld, chief of staff for Feuer. “There was no way to evaluate what (the conflicting expert testimony) meant, and what it meant relative to the safety of the permits being issued and the next permits that were going to be issued.”
In the meantime, Playa Capital has channeled its own environmental documentation into the effort to secure financing.
Despite the delay, Playa Capital has had some victories this year. It won a key court decision concerning its wetlands restoration proposal, and Building & Safety commissioners denied requests by environmentalists to revoke Playa Vista’s approvals. But the court battles may not be over if the CLA issues a negative recommendation on the environmental issues.
Huge San Pedro Deal
A massive industrial lease transaction in the South Bay, possibly that market’s largest ever, has been signed at the first phase of Overton Moore Properties’ new $90 million Port Los Angeles Distribution Center.
Logistics and transportation companies Performance Team Freight Systems and Gale Triangle, both subsidiaries of Triangle Network, will move into the project’s first two buildings and occupy a total of 547,000 square-feet by January, said Don Koch, vice president of marketing for Overton Moore, which is developing the project in partnership with Pacific Coast Capital Partners.
The 11-year lease is valued at $36 million.
“Port-oriented properties are in very, very short supply,” Koch said. “This is a once-in-a-lifetime opportunity to get a property of this size in proximity to the port.”
The logistics and transportation companies wanted facilities near the port and the freeway that would enable them to move goods quickly, company officials said. The firms handle distribution for retailers and for the garment industry.
Company officials are already familiar with Overton Moore because they occupy space at the 1.4 million-square-foot Dominguez Hills Industrial Park in Compton. Overton Moore built that project in the 1980s and continues to manage it after selling the park to Bristol Industrial Group in 1999.
The buildings in San Pedro are located at 300 and 400 Westmont Drive. The project is being positioned toward larger tenants seeking 200,000 square feet or more, Koch said. The second phase of the four-building project, which will bring the project’s total size to 1.9 million square feet, will break ground around the first of the year.
Tres Reid, Ken Carey, and Greg Dyer of CB Richard Ellis represented both parties in the transaction.
Overton Moore was brought in to develop the San Pedro facility by Pacific Coast Capital Partners, Koch said. The 88-acre property most recently has been used for oil product storage by Amerigas Propane Inc. It sits adjacent to the Tosco oil refinery.
The partnership has been very busy. Together Overton Moore and Pacific Coast Capital Partners also are building the 170,000-square-foot Cross Pointe office project near LAX and the 216,000-square-foot Douglas Technology Center in El Segundo.
Retail Game
Time for the players in retail real estate to come together.
The Retail Game, founded as a UCLA class 27 years ago by current mayoral candidate Steve Soboroff, will be held Dec. 7 at the LAX Marriott.
Now sponsored by the International Council of Shopping Centers, the event offers a mix of awards for retail projects, discussions on issues ranging from malls to online real estate, and a chance to meet retailers that are expanding locally, such as Mars Music and Home Depot, said the event’s co-chairman James Rosenfield of Rosenfield & Co., an L.A.-based retail real estate consultant.
Rick Caruso of Caruso Affiliated Holdings, Rick Evans of the Irvine Co., and retailer Fred Segal will be among those receiving awards at the event. Tickets are $175 in advance or $225 on the day of the event. For information call (310) 458-6682.
Staff reporter Milo Peinemann can be reached at (323) 549-5225, ext. 224, or at [email protected].
