SUBWAY — Subway Terminal Building Eyed for Apartment Project

0

While other downtown redevelopment projects may be getting a lot more attention, one of the most ambitious of them all is taking shape far out of the spotlight.

A local developer is quietly working to convert the leviathan Subway Terminal Building on South Hill Street into a high-end residential, retail and entertainment complex.

System Property Development Co. Inc. has plans to create 178 loft-style apartments, ranging from 600-square-foot studios to 2,900-square-foot townhouses, in the 12-floor, 500,000-square foot building perched between Pershing Square to the south and Angel’s Flight to the north.

And that is just the beginning. The $30 million project, when completed, will not just add badly needed residential spaces to the downtown market, it also aims to make a dent in the dearth of nightlife in the immediate vicinity.

For the 50,000-square-foot ground floor of the building, there are plans for live theater spaces, restaurants and bars. Down in the subterranean levels, there’ll be retail shops and additional entertainment.

“We’re planning to come on line at the same that Disney Hall and the new cathedral will be completed, about two years from now,” said Duane Cameron, president and chief executive of System Property Development, a private, family-owned firm. “A projected 1 million visitors will be coming to downtown Los Angeles to see these new attractions, and they’re going to need a place to go in the evening.”

The Subway Terminal Building is the company’s first attempt at converting a historic building, although it has done a few retail developments in conjunction with parking garages it owns. And although the financial risks of the project are significant, there is a proven demand for quality residential space in the downtown area.

“If it gets built, no matter where, it’s going to get leased out,” said Chris Owen, research manager with Marcus & Millichap Real Estate Investment Brokerage Co. “The class-A apartment buildings downtown, on Bunker Hill and at Ninth and Olympic, are 100 percent leased. These buildings achieve some of the highest rents per square foot in the county.”

A case in point is the first phase of the Medici apartment complex on Seventh Street just west of the Harbor (110) Freeway. The first 92 units were leased almost as soon as they became available early this month. There is already a waiting list for the second phase of the project, according to developer Geoff Palmer of G.H. Palmer Associates.

Likewise, developer Tom Gilmore of Gilmore Associates reports strong interest in the loft apartments in his converted bank buildings on Spring and Fourth streets, which are coming online this summer.

Historic considerations

One of the only obstacles now standing between Cameron and his vision for the Subway Terminal Building is the city’s Cultural Affairs Department. The agency has taken exception to the developer’s proposal for external metal bracing between the four wings of the building, to be installed as part of necessary seismic upgrades.

Since the building is on the city’s list of historic-cultural monuments, any significant work must be approved by the city Department of Building and Safety and the Fire Department, which according to Cameron had no problems with the bracing. However, approval also must come from the Cultural Heritage Commission, which oversees L.A.’s historic landmarks. And that’s where there’s a problem.

“There are some guidelines that need to be followed,” said Catherine Schick, president of the commission, who declined to provide further details. “It’s our concern to make sure the integrity of these old buildings is preserved.”

Ken Bernstein, director of preservation issues with the Los Angeles Conservancy, which is acting as an informal mediator between the city and System Property Development, agrees that the developer’s plan for the exterior of the building is not likely to meet with city approval.

“It’s too visible and it dramatically changes the defining features of the building,” said Bernstein. “Besides, it’s in the interest of the developer to maintain the historic character of the building because that is what makes it mar-

No posts to display