MAJOR DOWNTOWN HOUSING COMPLEX COMING

A $72 million residential/retail development a city within a city, complete with tunnels is planned for the Fashion District in downtown L.A., further boosting the area’s growing prominence as a place to live.

The 780,000-square-foot project is being developed by real estate investor Mark Weinstein, who bought 10 buildings in the area for $23 a foot about 18 months ago.

“My initial thought was fashion do more fashion,” Weinstein said about his project, which is to be called Santee Court. “But what I know better than anything is apartments. We want to build a project that creates a community.”

And so apartments it will be 400 of them. As president of MJW Investments, Weinstein owns and manages $150 million of real estate, including 1,000 apartment units and 2 million square feet of commercial and industrial space.

The centerpiece of his new downtown development is a cluster of eight buildings, with seven in the 700 block of Los Angeles Street surrounding what would become a cobblestone courtyard, and the eighth building at Eighth and Maple streets. A series of tunnels already winds under the block, connecting the buildings and creating a unique and secure means of entry to the potential residential units.

Parking likely would be under the courtyard, which today is an access driveway for loading bays in the buildings.

Weinstein, who is also lead partner in a company called Flatiron Development Group, said the buildings would be converted to residential units with ground-floor retail. He has plans for a pool and fitness club atop one of the buildings.

Two other buildings, at 824 and 910 Los Angeles St., would be renovated and remain offices and sewing operations, Weinstein said. The two buildings feature light manufacturing and creative office space that hasn’t been polished in some time.

In the works for years

The other members of Flatiron Development are David Gray, Blake Mirkin and Bradley Gwinn. Gray, an architect in Santa Monica, said that he, Mirkin and Gwinn have been mulling the development of residential units downtown for three or four years. They have completed several studies of the Fashion District and have collected and closely analyzed statistics on crime, graffiti, drug activity and rental demand.

Flatiron Development’s name is derived from the triangular sliver of property bounded by Spring, Main and Eighth streets, adjacent to the development site. The name is a takeoff on a similar piece of property in New York City, according to Gray.

“(The project site) has got some very good buildings, and it’s got lots of open space created by parking lots,” Gray said. “They’re historic buildings one block from the Broadway area. The neighborhood is very vibrant. It’s the closest you’re going to get to a New York street in downtown Los Angeles.”

Weinstein is taking the lead role in the development group because he owns the property and would be a major contributor in terms of financing the deal, but he came to the project late.

Having done significant research on the Fashion District and concluding it would be the area they would target for development, Gray, Gwinn and Mirkin had to conquer the next, more daunting task: where to build. They starting talking with developers who either already own property downtown or might be interested in investing in some.

Early this year, Mirkin realized that his friend, Weinstein, owned a big chunk of property in the very area that the group had identified.

“They showed me the plans and I said, ‘That’s my building; that’s my building; I own that,” Weinstein remembered.

Weinstein stumbled into the buildings when a colleague called and asked whether he’d be interested in 10 buildings that garment company heir Arthur Gerry was looking to unload.

Weinstein didn’t hesitate. He didn’t even go look at the buildings. He was familiar with the area because he used to buy suits there while a law student at Loyola Marymount University in the early 1980s. “I wrote an offer in 45 minutes and had closed the deal in 45 days,” he said.

Clearing obstacles

Mirkin said that bringing Weinstein into the development group helped solve perhaps the largest obstacle to creating the sort of downtown community that Flatiron Development dreams about.

“We’ve got the buildings. We’ve got the intellect and the ability to create the vision,” he said. “The fact that we own the land takes a critical component out of that.”

Mirkin said the residential community that the group envisions in its project would include all types of people with various income levels. He suggested rental rates in the residential units would range from $800 to $2,500 per month.

A 780,000-square-foot urban revitalization project, of course, is a big undertaking and expensive. Gray said that Flatiron is looking for financial assistance and hopes to get some help from the federal Department of Housing and Urban Development, Bank of America and individual investors.

“It’s under control,” Gray said. “We’re really not sure which of the sources we’re going to use for construction financing and equity.”

The city and state are potential sources for some money in the form of tax credits and restoration grants. Mirkin said the group would pursue historic tax credits and fa & #231;ade restoration grants.

The city doesn’t officially endorse development projects, but several city officials said the administration is supportive of Flatiron Development’s proposal.

“The concept sounds like a reasonable concept,” said Donald Spivak, deputy administrator of the city’s Community Redevelopment Agency. “One of the things the city is trying to encourage is the reuse of older and underutilized buildings for live-work types of activity.”

Spivak said the city’s adaptive reuse ordinance, which exempts development projects from certain zoning requirements, such as parking and setbacks, could save Flatiron Development as much as a year of untangling administrative red tape.

Variances needed

Flatiron Development would need variances to complete its proposed project, according to Steven MacDonald, bureau chief in the city Department of Building & Safety. The block is zoned for industrial use and does not permit residential development, MacDonald said. A variance for a project such as the one proposed by Flatiron Development would not be unusual, he added.

Gray believes that Santee Court would complement other residential developments, such as Gilmore Associates’ Old Bank District restoration projects and G.H. Palmer Associates’ new Medici housing/retail project.

“We believe we can attract plenty of tenants, and when the tenants come, they will generate the demand for retail,” Gray said.

Wade Killefer, an architect and principal at Killefer Flammang Purtill Architects, the firm that handled Gilmore’s Old Bank District project, said he was unaware of Flatiron Development and its project. Killefer, who’s working on as many as 2,000 more residential units planned for downtown, said he’s glad to hear that Flatiron Development is expanding the boundaries of downtown’s emerging residential community.

“I think that’s a great site,” Killefer said. “I’ve been waiting for stuff in that part of town to break loose because the buildings are great.”

Flatiron Development hasn’t submitted a formal proposal to the city yet, but Mirkin said the plan is in the works. Absent any unforeseen snags, Mirkin said, residents could be moving in within 18 months.