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Healthy Growth?

The planned reopening of Martin Luther King Jr. hospital in the next few years may do more than return a medical center to the poor South L.A. neighborhood of Willowbrook.

It also is reviving dreams of creating a business park for Los Angeles County’s growing but scattered biotech and medical device companies – a goal that has eluded industry boosters.

A new Urban Land Institute study commissioned by the county sees MLK, an adjacent medical university and an aging shopping center across the street as the building blocks for a complex of high-paying employers in the inner-city community.

“We’re charting a bit of new territory here,” said county Supervisor Mark Ridley-Thomas, who commissioned the study that was quietly released in November. “There are all sorts of opportunities to create places for health care businesses in the near future as the hospital reopens – with biotech maybe a little further down the road.”

The Board of Supervisors unanimously agreed last month to partner with the UC Board of Regents to reopen the hospital by 2013. The hospital closed two years ago after a scandal over a series of patient deaths.

The county also wants to construct a new smaller hospital building. Because the new building will have a significantly smaller footprint than the existing building, county officials believe the 38-acre campus can serve as the nucleus for a wider redevelopment of the neighborhood. Supporters hope to attract a variety of health care, biotech and other life science companies, as well as add work force housing, retail and other commercial services for residents.

The initiative already has attracted the attention of L.A.’s wealthiest resident, biotech billionaire Patrick Soon-Shiong, whose family foundation provided a $100 million guarantee to enable the county to reopen the hospital through an independent non-profit agency managed in partnership with UCLA.

Soon-Shiong, who the Business Journal in May estimated had a net worth of $6 billion, said his new biotech company, Abraxis Health, may even have a presence on the campus. The company is developing drugs based on new understandings of genetics.

“There is no reason why cutting-edge medicine – and training in it – shouldn’t be available in urban areas like (Willowbrook),” Soon-Shiong said. “In addition to providing training opportunities for health care professionals, I believe MLK would be a prime area for biotech, too.”

Prior failure

Unlike California’s more robust biotech centers in San Diego and San Francisco, Los Angeles has long struggled to develop business parks that not only would foster startups but also give them room to expand. Promising companies often are either acquired or move away.

Moreover, a highly publicized effort to build a similar 100-acre biotech park next to USC’s Medical Science campus in Boyle Heights hasn’t gone very far since it was proposed in 2001. It also had the backing of a billionaire, L.A. civic philanthropist Eli Broad, and others.

Still, on paper, the plans to entice biotech to Willowbrook show promise, including proximity to the Westside, where lack of affordable rents and developable land has prompted growing life science entrepreneurs to look elsewhere for expansion.

Boosters also note that public agencies control roughly 100 acres of property in the area, including land to the north owned by the Compton and Los Angeles school districts. (LAUSD has a magnet high school focusing on health care careers in the area.)

The Ridley-Thomas study envisions broadening any redevelopment to include Kenneth Hahn Plaza, a ’60s-era shopping center that has suffered since the hospital’s closing reduced foot traffic. Property fronting the Century (105) Freeway also is seen as suitable for redevelopment.

In addition, the entire area is in a tax-advantaged federal empowerment zone, and easily accessible by freeways and the Metro Blue and Green light-rail lines – making it desirable as a site for so-called transit-oriented development that clusters new construction near mass transportation.

The Urban Land study specifically envisions Wilmington Avenue east of the hospital transformed into a tree-lined boulevard with wide sidewalks, and retail and office development. The boulevard also would serve as a southern gateway to the MLK and Charles Drew University of Medicine and Science, which recently launched a bioscience degree program.

As for the hospital site, the new MLK would be surrounded by outpatient clinics and ancillary buildings, allowing the old hospital to be torn down or renovated for potential private development. That could allow much of the current 38-acre campus to be reconfigured for companies.

The idea for a biotech hub, though, is still in its nascent stages with the Urban Land study only suggesting biotech and biomed as two of the complementary industries that could grow there. The county still needs to complete a detailed master plan.

However, Dan Rosenfeld, Ridley-Thomas’ senior deputy for economic development, said the supervisor is interested in talking with developers or companies, even at this early stage.

“We plan to be very open and very welcoming to whoever comes forward with good ideas,” said Rosenfeld, a veteran Beverly Hills-based developer before joining the supervisor’s office last year.

“The scale of clinical practice that will return as the hospital reopens should interest a lot of companies, be they interested in urban health issues or in building a biotech or device company.”

Skepticism, optimism

Nevertheless, some in the biotech industry remain skeptical about the county’s ability to create an enticing package for biotech companies given the track record in Boyle Heights, where a coalition of city, county and university officials faced opposition from residents who feared they would be pushed out of their homes. In addition, the cash-strapped county had problems relocating a juvenile detention facility on its portion of the 100-acre project area.

But Rosenfeld sees a key advantage for the Willowbrook site: Public agencies, including the school district, control roughly 100 acres in the area, including the equivalent of six city blocks along Wilmington Avenue. There also aren’t huge obstacles such as the Boyle Heights juvenile hall, which the county estimated would cost $200 million to relocate.

“There is an abundant supply of land for modern facilities and a very cooperative local government in the county,” he said.

Still, redevelopment and biotech industry officials caution that the county faces several challenges in convincing biotech and medical device companies to move to an area that, at least initially, will lack expected amenities such as convenient lunch spots. There also are safety concerns.

“Willowbrook is not La Jolla,” quipped Ahmed Enany, executive director of the Southern California Biomedical Council trade group, referring to the upscale San Diego County community that is a biotech hub.

Curtis Fralin, founder of L.A.’s Infinity Redevelopment, found out firsthand how difficult it is to develop in the area. He attempted to buy Hahn Plaza a year ago, but was stymied not only by the tough financing market but by the center’s complicated, multiple ownership of the land and its buildings.

“We definitely see a lot of potential for the area with the hospital coming back,” Fralin said. “But there are issues that must be worked out first.”

Ken Lombard, a partner at Capri Capital Partners in charge of the Chicago firm’s South L.A. investments, said it may well be worth it to developers to keep an eye on the neighborhood. He expects retail, office and work force housing to take root first, but then believes many things are possible for developers who work closely with the area’s minority population.

“MLK can be a tremendous economic boost to the area,” said Lombard, whose firm in 2006 bought Baldwin Hills Crenshaw Plaza, located in a largely African-American neighborhood. “Whoever goes in there, though, needs to have a firm understanding of the area’s density and diversity. They’ll need to engage both the African-American and Latino populations that are there now, rather than just catering to one over the other, which is a mistake that has been made in the past.”

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