Real Estate Column—Caltrans’ Headquarters Design Plan Draws Skepticism

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The $170 million state project to build a new downtown headquarters for Caltrans has raised questions of fiscal responsibility with at least one local real estate executive.

Arden Realty Inc. Chairman and Chief Executive Richard Ziman said the state would save considerably if it would take existing downtown buildings through eminent domain.

“There are two schools of thought,” he said. “The first question to ask is, should they be building this project at all? They could buy any number of perfectly decent buildings for $200 per square foot, initiate condemnation proceedings, kick out the tenants and take over the building done.

“Should Caltrans, especially with the current condition of our infrastructure, be spending money on making an architectural statement? Maybe not.”

Caltrans is moving forward with the project involving adjacent blocks between First and Second streets and bounded to the east by Los Angeles Street and to the west by Spring Street.

It wants to move from 120 S. Spring St. into the planned 603,500-square-foot building in the block immediately to the east. The new building would allow Caltrans to consolidate employees and possibly house the Los Angeles Department of Transportation offices, which would require building another 112,700 square feet.

Christopher Martin, president of AC Martin Partners Inc. and the state’s master architect on the project, said Caltrans’ space requirements could not be satisfied in existing buildings for a better price.

Even with his skepticism on spending so much public money on the project, Ziman is not closed to the positives of new construction.

“The other school of thought is that, given that you are going to go ahead and put up a 700,000-square-foot building, it’s a given that you have a responsibility to the city to make it an architectural statement, especially in downtown. You certainly don’t want to just put up a black box.”

That’s not likely as the finalists in the design competition include international architecture superstars Rem Koolhaas of Holland and Mirralles Tagliabue Studio of Spain.


Anatomy of a Deal

Boyd Willat, creator of the DayRunner planner, SENSA pen and a developer of courtyard apartments in West Hollywood, sold a Harper Avenue apartment complex for $4.2 million.

The buyer was Accord Interests LLC, which earlier this year sold the former AIDS Project Los Angeles building at 1313 Vine St. to the Academy of Motion Pictures Arts and Sciences.

Willat built the 14-unit Isola Bella complex at 1320 N. Harper Ave. in 1993 with the intention of selling the units as condominiums. When Willat finished renovating the building, the real estate market wasn’t strong enough to support sales at his target level, and he reverted to rentals. He had planned to take the units to market as condos this summer and sell the 1,250-square-foot (average) units for between $350,000 and $400,000. Instead, he sold the whole thing for $302,000 per unit.

The sale came about because Andrew Levant, a senior broker with George Smith Partners, has relationships with both sides of the transaction. He said he was helping Accord principals Joe Mansour and Karl Sternbaum search for investment opportunities and approached Willat with the idea of selling the complex as a package rather than piecemeal.

Sternbaum said the developer would spend more than $500,000 on exterior fix ups and continue to rent them.

“There was the option to turn them into for-sale units, but we felt that marketplace is in short supply of rental property,” he said.

The units all with two bedrooms, two-and-a half bathrooms, loft space, private rooftop decks and, in some cases, enclosed outdoor sleeping quarters have been renting for between $3,800 and $5,000 per month. Sternbaum said the work, mostly exterior, will be complete by the end of October.

Accord is a commercial and residential developer best known in Los Angeles for the Nickelodeon animation offices in Burbank and the Pasadena Courtyard hotel in Old Pasadena. The developer has built 25,000 apartments in Texas, Florida and Missouri. This is the first residential project for Accord in Los Angeles.


Lofty Ambitions

While much of the attention regarding adaptive reuse of old office buildings has been focused downtown, Los Angeles developers Mika Co. have quietly spent $4 million to convert a Wilshire Boulevard building to 48 live/work loft spaces.

The American Cement building at 2404 Wilshire Blvd., near MacArthur Park, was home to American Cement Corp. until the late 1970s. Mika bought the property in 1989.

Built in 1964 of reinforced concrete as a means of showcasing the marvels of the occupant’s product, the building has 11,000-square-foot floor plates with views of the park, mountains and downtown.

Mika Principal Scott Schwartz said the building’s north and south faces are covered by a giant concrete grill composed of 225 X-shaped, pre-cast pieces measuring 11 feet high and weighing two tons each. From a design perspective, the grill serves multiple purposes, including load bearing and sunshade to reduce energy costs.

Mika commissioned local artist Peter Lodato to paint a mural on the east side of the building, facing downtown. The painting, scheduled for completion by the end of the month, will be 20 feet wide and 64 feet high. Occupancy is scheduled to begin in late September.


Architectural Acquisition

San Diego architects Austin Veum Robbins Parshalle have come to Los Angeles after acquiring Santa Monica architects Siegel Diamond Architecture.

Douglas Austin, principal and chairman of Austin Veum, said the deal was complex, allowing Siegel Diamond Principal Katherine Diamond to take a post with Lennar Communities Urban Development Group. He said his company can benefit from the expertise of the seven-person Siegel Diamond staff and because the firm has begun taking on more work on transportation and school projects, both hot areas in L.A. Diamond Siegel is known for design work on four light rail stations on the Los Angeles/Long Beach Blue Line and the Air Traffic Control Tower at LAX.

Staff reporter Christopher Keough can be reached at (323) 549-5225 ext. 235 or by e-mail at [email protected].

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