Determined individuals bringing long-sought revival to reality
The reinvention of downtown L.A. is no longer mere talk or dreams, it’s a reality in the making.
The $1 billion second phase of Staples Center is roaring toward final approval. Thousands of residential lofts are being built out, or are already occupied. Architectural landmarks are rising out of the ground.
While the various downtown projects have received plenty of media attention, far less heed has been paid to the individuals who are driving this renaissance.
It’s a cast of high-powered investors, developers, entrepreneurs and civic leaders who are determined to give the nation’s second largest city a true heart. They steadfastly reject the long-held notion that L.A. is just too big, too spread out to ever develop a primary nerve center. They reject the belief that Angelenos are just too attached to their suburban backyards and swimming pools to ever live in an urban setting.
“It’s the last great city, and it’s just barely getting to puberty right now,” said New York transplant Tom Gilmore, among the catalysts driving downtown’s transformation. “Being a part of that really appeals to me.”
It also appeals to moguls like Eli Broad and Ed Roski, and to public officials like state Assemblyman Gil Cedillo and CRA deputy administrator Don Spivack. It appeals to property owners like Ira Yellin and Judah Hertz, and to cultural icons like Frank Gehry and Placido Domingo. While some of the downtown catalysts are offering little more than verbal support, others are investing significant amounts of their time and money. Gilmore, for example, has converted seven old downtown office buildings into residential lofts. So far, he has completed 235 units 95 percent of them occupied, he said with another 209 units under construction and 300 more units on the drawing board.
“When I said I was going to develop downtown I got laughed at,” Gilmore said. “(But) what percentage of people have to live downtown to make it work? It’s not that much it’s 30,000 people.”
Developer Yellin, one of the few people who predate Gilmore in years spent toiling to make the downtown live/work vision into a reality, puts the required residential critical mass at closer to 100,000 people.
Yet he remains a steadfast believer.
“I think we are developing a critical residential base, but it’s still quite small,” Yellin said. “I think it’s inevitable. I think downtown is going to become an attractive and interesting place to live in an evolving Los Angeles.”
The developer, formerly of Catellus Development Corp. and now a principal in Urban Partners, said the true downtown residential community will take another five to 10 years to emerge.
“The whole process of incremental renewal has to happen block by block, building by building,” said Yellin, has bought, restored and relaunched such downtown icons as the Bradbury Building, Grand Central Market and the Million Dollar Theater Building.
Feeding growth
Of course, every residential community of any consequence needs a full-service supermarket. And that’s where Pat Barber comes in. Barber is the senior vice president of real estate at Ralphs Grocery Co. who is spearheading the company’s search for a downtown store site. Currently, most downtown residents schlep to Hollywood, Pasadena or Beverly Hills to get their essentials.
Barber declined to comment last week, but downtown real estate industry sources said the anticipated Ralphs market will most likely emerge on the 7.2-acre property at Ninth and Flower streets, a site that CIM Group LLC is reported to be buying from Shuwa Corp. for $41 million.
A key player in any redevelopment of that property, which was formerly the headquarters of Southern California Gas Co., is Don Spivack, deputy administrator of the Los Angeles Community Redevelopment Agency. Spivack has access to as much as $7 million to assist in any redevelopment effort. The CRA board has approved exclusive negotiations between Ralphs and Shuwa.
Of course, Spivack’s role in downtown’s transformation extends far beyond the Shuwa site. He helps funnel public money into projects of every description. He also functions as something of an intermediary among the various downtown business improvement districts, developers and various governmental agencies.
“We’re promoting the attraction of residential developers, recognizing that a downtown functions better when you have a larger group of stakeholders,” said Spivack, who believes public support is key. “The private sector in some cases is not willing or not able to revitalize these older communities and has to have a push from the public side,” he said.
Providing a sustained push from the private-sector side, meanwhile, is Carol Schatz, president and CEO of the Central City Association, which includes the Downtown Chamber of Commerce and the Downtown Center Los Angeles BID. Schatz has become the No. 1 cheerleader and lobbyist for the area’s rebirth.
“We’re taking major blocks. This is not maybe,” said Schatz of the downtown renaissance.
Legislative roots
Key to the current flurry of development activity was passage of an adaptive reuse ordinance, which Schatz and her organization helped push through. The ordinance relaxed zoning, parking and other regulatory restrictions on downtown redevelopment projects.
“It’s key because we brought attention to the fact that we had a stock of older office buildings that would best be used by converting them to housing,” Schatz said.
Within City Hall, among those who have been channeling downtown’s accelerating momentum is Kelli Bernard, senior business development representative with Mayor Richard Riordan’s business team.
While her role could end with this month depending on what the new mayor wants to do, Bernard since 1993 has been working to bring more jobs downtown.
“Three years ago it was harder to convince people that downtown was a place to do business,” Bernard said. “Now we are trying to make sure that the things we promised were true.”
Amy Anderson is working on fulfilling another promise. As Broadway Initiative coordinator for the Los Angeles Conservancy, Anderson is promoting the revitalization of Broadway between Third and Ninth streets as a profitable retail stretch. It once was just that, anchored by a collection of lavish movie palaces, and could be again.
Helping Anderson, by trying to light up the Broadway corridor at night, are Alan Abshez, a land-use attorney in Century City, and Roger Landau, a city planning commissioner and bankruptcy attorney.
The pair has organized a team of professional advisors to work pro bono on a plan to bring back to life the old Broadway District.
The Nighttime Broadway plan is focused on convincing restaurateurs and nightclub operators that they could make money and contribute to the downtown rebound by opening locations on the upper floors of old buildings that have street-level retail.
“It’s going to help provide 24-hour uses for downtown, both for residents of downtown and to attract people downtown on evenings and weekends,” Abshez said. “For those looking for urban excitement and energy, these uses don’t exist (today). If we’re really to have the downtown take off, you have to have those amenities so people are getting what they think when they move downtown.”
Personal commitment
Donating his professional expertise to the cause is Abshez’s way of giving back to his city. It’s also a way to network and build professional and personal relationships.
“I believe in this idea. If it’s adopted and it succeeds, I’ll get a personal satisfaction, which is all I can count on,” he said. “It’s more than a hobby. It’s a lot of work, actually, but it’s satisfying to see the reaction to it.”
While nightlife, supermarkets and job growth are all essential elements, the true key to downtown’s transformation into a 24-hour community is residents and lots of them.
Besides Gilmore, among the developers focused on luring more residents into downtown is Geoff Palmer of G.H. Palmer Associates. Palmer has built the Medici housing/retail project and is building a second development called Visconti. In addition, KOR Realty Group is working on a handful of residential projects, including a recent $30 million joint venture with Kennedy-Wilson International to convert the 500,000-square-foot building at 612 Flower St. into 317 residential units.
Mark Weinstein, through his MJW Investments, is working on a $72 million, 400-unit apartment/retail community that will encompass 10 buildings in the Fashion District.
Significant investments also are being made by Judah Hertz, whose Hertz Investment Group has been steadily snatching up downtown office buildings for the past five years, in anticipation of the good times.
Hertz was among the early investors in the loft wave that swept through SoHo in Lower Manhattan, and he played a role in the redevelopment of the warehouse district in New Orleans. He missed the South Beach wave in Miami, but he’s not letting downtown Los Angeles wash over him.
“I’d like to think I see something coming,” said Hertz of his decision to invest $700 million, to date, in downtown L.A. real estate.
Most recently, Hertz bought the Union Bank Plaza office building at Figueroa and Fifth streets. His other recent investments include the CaliforniaMart at 110 E. Ninth St. in the Fashion District, the Standard Oil Building at 605 W. Olympic Blvd. and the Twin Springs at 433 and 419 S. Spring St. Hertz also has his eye on “several million square feet” of additional property downtown, which he declined to identify more specifically.
And Hertz’s investments across all property types supports his contention that downtown will brim with a combination of residents, office workers, shoppers and fun-seekers.
“I don’t see any reason why it shouldn’t develop like in other cities like San Diego, San Francisco,” he said.
And an increasing number of investors seem to be reaching the same conclusion. “When we started to purchase, I’m sure I was the only offer (the property sellers) ever had,” Hertz said. “Now, every time, there are 20 offers on the table.”
Nonetheless, the downtown renaissance remains in its formative stages.
“We’re still on the front end of this upside curve,” said Larry Kosmont, a partner in the real estate consulting firm Kosmont Partners. “We’re getting a critical mass of announcements rather than a critical mass of projects. It’s too early to pop the cork on the champagne of a downtown comeback.”
