By LARRY KANTER
By eliminating lengthy and frustrating traffic delays, the Alameda Corridor could provide a boost to the industrial real estate market in L.A.'s rust-belt cities of Vernon, Huntington Park, South Gate and Compton.
But the two to three years it will take to build the $2 billion transportation project are expected to wreak temporary havoc in the corridor area, which is making the market an increasingly difficult sell in the short-term, brokers say.
With a fleet of earth-movers and bulldozers soon to be dispatched to streets already clogged with trucks and trains, upcoming construction of the corridor has real estate brokers and businesses in the area bracing for even more gridlock than usual.
"In the short run, the Alameda Corridor probably will bring down (real estate) values a bit," said Paul Sablock, an industrial broker with the Seeley Co. who has worked in the area for the past 18 years. "People are afraid of what's going to happen to their businesses. I haven't lost a deal to it yet. But I have had to hold a lot of hands."
Sablock and others say that once completed, the corridor which is expected to reduce traffic snarls by moving train traffic below grade could provide untold marketing opportunities and attract new tenants to the jumble of aging brick warehouses, distribution facilities and manufacturing plants in L.A.'s vast industrial heartland.
"It will be a short-term disruption with a real good long-term gain," Sablock said.
The Alameda Corridor is a 20-mile, high-speed railroad line designed to speed cargo from the ports of L.A. and Long Beach to the railyard distribution centers near downtown Los Angeles.
The heart of the project is a 10-mile-long trench of depressed railway running along Alameda Street, beginning at Santa Fe Avenue in L.A. and continuing south to state Route 91 in Compton. The concrete trench will be approximately 50 feet wide and 30 feet deep, and will include two railroad and 26 highway overcrossings. The corridor also includes a number of grade separations at its northern and southern ends, as well as the widening of Alameda Street for increased truck traffic, which will remain at grade level.
Three companies have submitted bids to construct the trench Bechtel Infrastructure Corp., Kiewit Pacific Corp. and Tutor Saliba Corp. The Alameda Corridor Transportation Authority, the agency overseeing the project, is expected to choose the contractor in September. The digging of the trench is expected to begin in mid-1999. The entire corridor is scheduled for completion in 2001.
Corridor officials say the project will create as many as 10,000 construction jobs. But whether it will bring lasting economic benefits and higher real estate values to the corridor cities is a matter of debate. Many fear that the corridor is simply a sunken expressway, which will benefit the ports to the south and the distribution centers to the north, but do little for the communities in between.
"The project is essentially an expressway," said Michael Gagan, a lobbyist representing the city of Vernon, which has yet to reach a settlement with ACTA on traffic mitigation issues. "The cargo is destined for locations 300 miles away or more."
Other than alleviating surface transportation problems, "the project does nothing," said Gagan.
Jeff Kellogg, the former chairman of ACTA and a Long Beach real estate executive, takes issue with the expressway argument. Existing railroad spurs, which allow locomotives to vacate the main rail lines to pick up or deliver cargo, will be incorporated into the Alameda Corridor, he said, providing opportunities for distribution centers along the corridor's route.
But Kellogg and Gagan agree that the project's main value to the real estate market will be its contribution to solving the region's traffic problems.
"After the corridor is in place, we may see more (businesses interested) in the area, because it will facilitate greater movement," said Carol Lefkowitz, a broker with Grubb & Ellis Co.
A recent study by the city of Vernon found that traffic at the town's numerous railroad crossings regularly results in delays of up to 15 minutes, often with more than 260 vehicles stacked up for almost a half-mile, many times blocking the driveways of local companies.
Lefkowitz says she often finds herself stuck in those traffic jams an annoyance that becomes downright embarrassing when she is showing a prospective client around the area. "And it happens all the time," she said.
Those headaches not just for brokers, but for businesses throughout the area are likely to worsen when construction of the corridor begins in earnest next year.
The primary beneficiaries of those hassles will be owners of industrial properties in cities like Commerce and Industry, which lie to the east of the Alameda Corridor but still have easy access to downtown and the Long Beach (710) and Santa Monica (10) freeways, said Sablock.
Potential tenants aware of the corridor's pending construction already are beginning to look east as an alternative to Vernon or Huntington Park, he said.
But if the Alameda Corridor realizes its promise of reducing the number of traffic jams in the area, the corridor cities likely will catch up quickly after it's built, he added.
"In the short term, it's going to make the broker's job more difficult," said Sablock. "But we're always trying to sell the long-term benefits. And any time you can improve the infrastructure, it only does good for an area."
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