Pieces Coming Together on South Central Project
By DANNY KING
Staff Reporter
Having secured agreements on about a quarter of the property it needs for a $20 million South Central shopping center, Majestic Realty Co. officials expect building to begin in about a year.
“If things go well, we’ll have the entitlements complete by year-end,” said John Hunter, Majestic’s vice president of retail development. Build-out of the 120,000-square-foot shopping center at the northeast corner of Vermont and Manchester avenues is expected to take 12 to 18 months.
No tenants have been signed, although Majestic broker Vince Evans said discussions are ongoing with a number of national restaurant and supermarket chains, including Food4Less.
So far, Majestic has preliminary agreements to purchase three of five apartment buildings on the site and also has had discussions with three commercial landowners. The power of eminent domain is limited to three non-residential properties.
The Community Redevelopment Agency, which opened negotiations last August with Majestic and its development partner, Vermont Village Community Development Corp., voted unanimously on Feb. 21 to extend the negotiation period by 90 days.
The developers are seeking entitlements for the 10.5-acre center that would span three blocks along Vermont between Manchester and 83rd Street.
CRA assistance
The site consists of five apartment buildings, a Payless ShoeSource, an Ici Dulux Paint store, a few vacant lots and a number of empty storefronts, some of which were damaged during the 1993 riots.
“Everybody in the neighborhood realizes the potential of the project,” said CRA Project Manager Oscar Jauregui. “That’s why the developer has been successful at locking down three of them and is close to locking up the other two.”
The CRA has agreed to purchase for $1.8 million two acres of adjoining land for parking. Depending on approvals from the 8th City Council District, the CRA may invest an additional $3 million in the project. “It restores the retail component of an area that got devastated in the riots,” said Jauregui.
The project is Majestic’s second foray in recent months into a South Central Los Angeles retail market largely believed to be underserving its residents.
Since October, Majestic, in partnership with Capital Vision Equities, has been in negotiations with the City of Inglewood to develop a $150 million mixed-use project, which includes 160,000 square feet of retail space at Century and Crenshaw boulevards.
“I think retailers are going to start taking a look at the area,” said Katell Properties President Jerry Katell, who was a developer for the 250,000 square-foot Chesterfield Square at Slauson and Western avenues. “The area is very under retailed.”
A 1999 study by Pepperdine University’s Davenport School of Public Policy found South Central Los Angeles to have 65 percent fewer grocery stores and 20 percent fewer clothing stores per capita than the rest of the county.
“If it all goes well, there’s no question it should be a success,” said Thomas Tseng, who authored the report. “With all these projects, politics can make them successful and politics can kill them as well.”
Though encouraged by the success of Chesterfield Square Katell noted that sales at its two anchor stores, Home Depot and Food4Less, are above projected levels both Evans and Jauregui said Vermont-Manchester will be more tailored to the immediate community than Chesterfield.
“There are two significant churches that have 25,000 to 30,000 congregants between them within a quarter mile,” said Evans of the need to have a full service, as opposed to a fast food, restaurant at the site. “The folks there don’t have a place to sit down after the service.”
Initial steps
Officials at Majestic, which has developed 38 million square feet of commercial property in Los Angeles County, were first introduced to VVCDC Vice President Allan Crabbe Jr. by 8th District Councilman Mark Ridley-Thomas. The bid submitted by Majestic and VVCDC was one of 11 received by the CRA.
“The most competitive bid we got back was from Majestic,” said Ridley-Thomas, who noted the importance of having “indigenous stakeholders” such as VVCDC as a partner.
The project also is one of several projects in which the VVCDC has been engaged to upgrade the Vermont Corridor, an area that extends along the two-mile stretch between Manchester Avenue to the south and Florence Avenue to the north.
The developer is in escrow on a 26,000 square-foot office building at the corner of 81st Street and Vermont Avenue that was once used by Pepperdine University, but has been vacant for years. While the purchase price was not disclosed, about $2.5 million will be put into upgrading the building, which will 80 percent occupied when the rehab is completed, according to Crabbe. VVCDC is also looking to purchase a number of residential properties along the corridor for the development of affordable housing complexes.
“Our approach is going to be a holistic approach to development,” said Crabbe.
