Build Boom

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Build Boom
City Planner Mark Gallatin at the Skycourts project in San Gabriel.

Some things in San Gabriel have stayed pretty much the same over the last 20 years.

The population of the bedroom community about 12 miles east of downtown Los Angeles has remained relatively constant at 40,000. Its commercial core is still very much a local affair – dominated by mom-and-pop operations with no Starbucks or chain grocery stores.

Despite all that, the city is undergoing a cultural makeover, one that has led to more than $225 million in hotel, retail and residential development planned or under way.

The rush to build, city officials said, comes partly because the easing of the recession has released pent-up demand but mainly because of the rapid growth of the city’s Asian population. Its proportion of the city’s population has doubled over the last two decades to more than 60 percent.

In all, there are 13 residential, commercial and mixed-use projects that have just been completed or are in the planning stages, among them a 316-room Crowne Plaza Hotel that is set to break ground shortly and an 88-unit residential community, the largest of its kind to be built there.

“Our city will look a lot different from what it once was,” said Mark Gallatin, San Gabriel city planner.

Indeed, in many ways it already does.

Founded in 1771 by a Spanish priest who oversaw the building of one of the state’s first missions, it is possible now to find yourself in parts of the city where only Mandarin is spoken. That has proved to have great appeal to Chinese tourists to the L.A. region – and there were more than 420,000 of them in 2012.

“San Gabriel is in a more favorable position to rebound more robustly from the depth of the recession as compared to other communities that don’t have our particular assets,” Gallatin said. “One of those primary assets is our role as a tourist destination for travelers from Asia.”

The city’s only full-service hotel, the 222-room Hilton Los Angeles/San Gabriel, has been running at 90 percent occupancy for the last three years, well ahead of last year’s 77 percent Los Angeles County average.

“I could easily run 100 percent every single night,” said Carl Bolte, the hotel’s general manager, explaining that the hotel is essentially fully occupied: 10 percent of the rooms are kept vacant for deep cleaning and maintenance.

“I could see easily 200 hundred (more) rooms that could be sold,” said Bolte, adding that he often turns down requests for blocks of 40- to 50-room reservations.

Those big numbers encouraged Sunny Chen, developer of the Hilton, to bring in two more hotels to what he’s calling the Landmark Project, a commercial complex at Del Mar Avenue and Valley Boulevard. The original plan, submitted in 2012, envisioned two six-story hotels with ground-floor retail and parking, but it’s on hold right now due to traffic issues.

The Crowne Plaza, being developed by Alhambra company Pacific Lion at Valley and Palm Avenue, will soon break ground and is expected to open in summer 2015.


Residential rush

Hotel developers are not the only ones who want to cash in on San Gabriel’s tie to visitors from Asia.

Richard Sun, a former dentist and San Marino City Council member, has formed Las Tunas Regency, which is planning a mixed-use development that will have 18 live-work units, 15 residential units, and more than 9,000 square feet of retail and restaurant space.

It will be the first development to offer live-work units in San Gabriel.

“A lot of executives travel in between Hong Kong, Taiwan, China and here, and a lot of them are staying in San Gabriel,” Sun said. “Instead of choosing Hilton, they can purchase units here.”

Sun said he has seen this trend happening in Taipei, Hong Kong and cities in China, and he wants to test it in Los Angeles, too.

Sun, a local with deep ties to the community, is typical in many ways of the developers driving the new building boom. That has been a factor in keeping the scale of the projects modest thus far.

“Really, anything over about 15 to 20 units would be considered large for our city,” said Gallatin. “The average or typical multifamily project in years past has been like six or seven units.”

But that is changing. A number of residential or mixed-use projects are planning 30-, 40- or 50-unit complexes, such as the 46-unit Arroyo Village condominium project by local developer Frank Lac and the 31-unit condo and retail project Skycourts by Rosemead’s CETT Investments Corp.

“The housing market is coming back,” said Tom Murphy, senior resident fellow at Urban Land Institute in Washington, D.C. “But the other thing you are seeing, which was just beginning prior to the recession, is there was sort of a big movement back to a more walkable place. That’s driving the mixed use.”

Gallatin said San Gabriel welcomes the trend of increasing mixed-use developments and wants to keep these projects along its three major streets, Las Tunas Drive, and Valley and San Gabriel boulevards, to make these areas more vibrant and pedestrian friendly.

Among the larger projects in the works is an 88-unit townhome project by Olson Co. of Seal Beach, the first large nonlocal company to come in to develop residential complexes.

“We built in Alhambra previously, but we were also very attracted to Monterey Park, the city of San Gabriel and Temple City because they are highly desirable,” said Scott Laurie, Olson’s chief executive.

Olson, which was founded in 1988, has traditionally focused on affordable urban housing throughout California. Since the market downturn, the company narrowed its focus to Los Angeles and Orange counties and, increasingly, to the western San Gabriel Valley.

To decide where to build, Olson ranked all the cities in the two counties by school scores, incomes, price of appreciation, delinquencies and other data points. San Gabriel, along with many other valley cities, is among the highest rated.

“We really like the market. We continue to look for additional opportunities,” he said. “Our belief is that buyers out there are looking for new products, but there is not much new inventory.”

Last year, 76 percent of Olson’s homebuyers were Asian.

Olson’s interest in the Asian market works well with San Gabriel’s plan to attract more mainstream brands. Though valuing the importance of tourists to the area, city officials hope they can make use of the opportunities to transform the place to more than a bedroom city and tourist destination.

An example on the retail side would be the opening of Smitty’s Grill, which serves American comfort food, the very first of its kind in San Gabriel.

“There are a lot of ethnic restaurants in the city,” said Gregg Smith, co-founder and owner of Pasadena’s Smith Brothers Restaurant Corp., which owns Smitty’s. “There seems to be a lack of American restaurants.”

City Councilman Chin Ho Liao also said he is working on bringing in a mainstream grocery store like Trader Joe’s or Ralphs.

Also in the works is a large mixed-use development planned by developer Stephen Chan at Valley and Del Mar Avenue. The project, still in the preliminary design stage, includes a four-story development with 56 residential units and 26,000 square feet of commercial space.

The growth has not been without its negative impacts, though.

For years, tour buses taking residents and tourists alike to tribal casinos, Las Vegas or on shopping trips have used Valley as a pickup and drop-off location. The wear and tear from the operations has raised concerns about damaged pavement as well as safety and environmental issues, leading the City Council to pass an ordinance late last year banning on-street loading and unloading of commercial buses.

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