Spurred by a change in zoning regulations nearly five years ago, residential development in downtown L.A. has started to gain critical mass.
A series of acquisitions and projects have been announced in recent months as developers, encouraged by the relaxed requirements of the city's adaptive reuse ordinance, pour tens of millions of dollars into the urban core.
They're betting that younger renters (most of the residential units are apartments) are looking for an environment that is at once grittier and yet caters to their comfort needs.
Many of the historic buildings downtown are vacant, save for street level retail. But more than 20 buildings in the historic core or within blocks of its official boundaries Third and Ninth streets, Main Street and Broadway --- are in play to become residential:
- Pacific Electric Building on Sixth Street between Main and Los Angeles: Landlord ICO Investment Group, in partnership with Capital Vision Equities, is turning the 500,000-square-foot building into 300 to 340 rental loft units. The project, which will restore the rooftop garden of the original Jonathan Club, will cost more than $40 million.
- Former St. Vibiana's Cathedral at Second and Main: Gilmore Associates is converting the site into a mixed-use development with 300 housing units, a hotel and a performing arts venue.
- Higgins Building, also at Second and Main: Albion Pacific Properties of San Francisco has renovated the building and is marketing the space to residential tenants.
- Victor Clothing Building at Third and Broadway: Nathan Corman and Clinton Financial Corp. are converting the building to 24 residential lofts and 9,400 square feet of retail.
- Irvine Byrne Building at Third and Broadway: Oxford Street Properties is converting the building to 48 residential lofts.
- Old Bank District at Fourth and Main: Gilmore Associates built 230 loft units in three buildings.
- The Rowan Building at Fifth and Spring: Gilmore again, with Simpson Housing Trust.
- Security Bank Building at Fifth and Spring: Simpson Housing Trust has the building in escrow and plans to convert to lofts.
- Santa Fe Buildings on Sixth Street between Main and Los Angeles: KOR Realty Group and Oxford Street Properties converting to lofts.
"It's arguably the finest collection of pre-War buildings intact in the United States," said Dan Rosenfeld, a principal and partner at Urban Partners.Revised zoning a boost
The jumpstart for loft development came in 1997 with the adaptive reuse ordinance. The ordinance made two very big concessions to developers: relaxing structural codes tightened after the 1994 Northridge earthquake and removing the requirement that parking be added.
The earthquake made many people squeamish, Rosenfeld said, but should have been reassuring to developers.
"I'd rather be in a brick building that's been through three or four earthquakes and still looks good than a high-rise where the welds are hidden behind granite and you don't know what's happening," he said.
Even before the earthquake, Ira Yellin and Catellus Development Corp. pioneered the downtown development of residential units. Now Rosenfeld's partner at Urban, Yellin developed more than 100 apartment units at the Million Dollar Building at Third and Broadway and the Homer Laughlin Building above Grand Central Market.
But the leader of the downtown residential movement is Tom Gilmore. The transplanted New Yorker wasn't the first one to do it, but he was the one to make the biggest splash. By getting publicity for his Old Bank District projects, Gilmore showed the rest of the development community it could be done.
"Once it gets going the snowball effect is bound to occur because there are so few gaps (to develop) in the landscape," Rosenfeld said.
Irving Bonios, senior vice president at NAI Capital Commercial Real Estate Services, said the adaptive reuse ordinance might have made it procedurally easier to convert downtown office buildings to loft apartments, but that means nothing without demand.
The bottom line, he said, is "people like living in these historic buildings."
And that isn't something you can find unless you're downtown.
"You can't find in West L.A. a building with granite, marble, sculptures, exposed wood ceilings, huge windows with metal sashes," said Frank Gamwell, who along with his partner Bud Hawley is a principal at Oxford Street. "And you certainly can't afford to build it."Shifting business core
There is a mystique about living in an historic building the sort of thing that is driving the generation of 20-somethings and 30-somethings to abandon the suburbs where they were raised and seek urban adventure.
"They're rediscovering something almost in an archaeological sense," Rosenfeld said. "You find parts of our culture that were hidden for decades."
Regardless of the young people's quest for urban exploration, it must be acknowledged that Los Angeles is a vehicular society, and that means parking and that means trouble downtown.
Rosenfeld said Los Angeles came of age with the automobile and attitudes will have to change, but he can envision an L.A. with far fewer cars. Hawley and Gamwell believe it, too.
"I think we will see the time when people will say, 'I don't need a space in my building because I can park in Pershing Square and walk,'" Hawley said.
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