Ben Cohen, founder of Ben & Jerry’s Homemade Inc., has found a home for his new apparel venture, signing a five-year lease for a downtown industrial building.
Cohen recently closed the $670,000 deal for 12,700 square feet and will set up Hot Fudge Venture Fund Inc. at 807 Mateo St.
Cohen launched Hot Fudge after Ben & Jerry’s was sold to British-Dutch consumer products group Unilever last year for $326 million. He had been scouting downtown L.A. for a large building to house what he said would be a “sweat-free” clothing company employing workers who would share in the profits (Los Angeles Business Journal, Sept. 3).
Bradford Broyles, industrial advisor at Grubb & Ellis Co., was Cohen’s broker on the deal. He said the lease starts at 80 cents per square foot gross, and includes annual 3.5-percent increases and one month’s free rent.
The official announcement and a public event will take place early next year, according to Broyles. Workers are building out the space, installing machinery and upgrading electrical systems.
The building, constructed by Dynamic Builders for landlord David Lavin’s Mateo.com LLC, was completed earlier this month. Broyles said the rent rate shows there’s vitality remaining in the downtown industrial market.
“For a garment user, that’s one of the higher rents,” he said. “There’s so little true Class A, stand-alone buildings downtown.”
Timothy Wetzel, a vice president at Colliers Seeley International Inc., represented Lavin in the deal.
System Back in Talks
System Property Development Co. Inc. is again in exclusive negotiations to sell its Subway Terminal Building on South Hill Street, this time with Cleveland-based Forest City Enterprises Inc.
Duane Cameron, president and chief executive of the family-owned System Property, confirmed that the talks were moving toward a deal. “I think both parties are headed in that direction,” he said. “I think it’s two or three months at most.”
Officials at Forest City, which owns the 270-unit Metropolitan luxury apartments at 950 S. Flower St., the 157-unit Miramar Towers at 2000 Miramar St. and is developing a market-rate condominium project at 11th and Flower streets, did not return calls.
System Property originally planned to spend $30 million to redevelop the 12-floor, 500,000-square foot building itself, constructing 178 loft-style apartments.
The building is perched between Pershing Square to the south and Angel’s Flight to the north. The System proposal involved converting the 50,000-square-foot ground floor to a variety of retail uses, including live theater, restaurants and bars. Underground levels would feature retail shops and other entertainment.
Ultimately, System Property decided to let someone else deal with the seismic retrofit issues involved in redevelopment and concentrate on building (a now-shelved) $40 million luxury hotel on a parking lot adjacent to the Subway Terminal Building.
At least one earlier attempt to sell the property fell through. System Property and Commonwealth Partners were said to be close to a $12 million deal earlier this year, but Commonwealth bailed.
Cameron said current market conditions don’t support the five-star hotel plan. “We won’t revisit it until the hotel business comes back and it looks like that will be a feasible project.”
Hotel Makeover
The owner of the Hotel Del Capri on Wilshire Boulevard, foiled once in its attempt to reposition the aging two-story motel-like building, has come up with a scaled-down plan that is more in line with height restrictions in the area.
JFBA LLC’s proposed six-story luxury apartment building will be presented to the Westwood Design Review Board on Nov. 28. This low-rise plan, unlike the previous scheme, conforms with the Wilshire Westwood Scenic Corridor Plan limiting new construction to six stories, or 75 feet, unless a conditional use permit is approved.
The plan also determines how shadows may be cast on residential structures more than 200 feet away.
JFBA’s attorney, Rob Glushon, said the partnership’s initial 26-story, 88-unit condo proposal met shade/shadow requirements, but his client didn’t have the energy to keep up the fight for a conditional-use permit in the face of community opposition.
Glushon said the hotel was not fetching the same rates as nicer and more modern hotels in the Wilshire corridor and was in need of redevelopment. The original condo proposal would have brought the highest return, he said. Other plans including a seniors and assisted-living facility were considered before the final use was settled upon.
Industry Sale
Westcore Gale LLC spent $18 million to buy Pacific Gulf Distribution Center, a three-building warehouse and distribution complex in City of Industry. The 409,000-square-foot industrial park, at 16333-16801 E. Gale Ave., was sold by Pacific Gulf Properties Liquidating Trust.
The site covers 21.75 acres and was built in three phases in 1973, 1977 and 1998. The buildings are fully leased by tenants that include Metropolitan Concessions, L.A. Specialty Produce and Edward Electronics. The property will be renamed the Westcore Distribution Center – Gale.
Leases
Sit ‘N Sleep signed a five-year, $3 million lease for 80,759 square feet at 18432 S. Wilmington Ave. in Dominguez Technology Center in Carson. The self-proclaimed “mattress superstore” in December will relocate its corporate headquarters and main warehouse from Montebello to Carson.
In addition to larger and more efficient office and warehouse space, the relocation puts the retailer in a geographically desirable location for service to Los Angeles and Orange counties, according to President Larry Miller.
The family-owned business has 150 employees and 10 retail locations in Southern California.
Staff reporter Christopher Keough can be reached at (323) 549-5225 ext. 235 or by e-mail at [email protected].
