Peace Down, Property Values Up for Grove Neighbors

By DANNY KING
Staff Reporter

While leading a pre-opening tour of The Grove at Farmers Market last week, developer Rick Caruso spoke of the "residual value" of the 575,000-square-foot retail center, which he said would increase property values for nearby homeowners.

"The effect is going to be huge," said Caruso, chief executive of Caruso Affiliated Holdings. "I've seen it happen around our other properties."

But if you were to tell Dave Finn he was sitting on a gold mine, he would have none of it.

As cars backed up in front of his Martel Avenue home six blocks away on that same day, Finn was skeptical about what effect The Grove, which opened last Friday, would have on the value of his home of 50 years.

"Why should it boost it?" asked Finn, pointing his cane at the line of cars. "This used to be a nice neighborhood. It's terrible now."

Center proponents believe that the convenience and quality of the development anchor tenants include Nordstrom, Barnes & Noble and J. Crew will outweigh the challenges in dealing with what Caruso estimates will be 25 million visitors to the development each year.

"It's going to (adversely) affect the peace and solitude of our neighborhood, but it will also raise property values," said Ronnie Gootkin, president of the Rancho LaBrea Neighborhood Association and 29-year resident of the neighborhood just east of the development.

Rising Expectations

The Grove opens at a time when median home values in L.A. County continue a six-year climb. And while the value of the increases has slowed recently at the higher end of the market, the center's positive effect would merely continue an existing trend of rising home prices over the past few years.

The median price for a home in the 2 1/2-square-mile neighborhood surrounding The Grove was $638,500 in January. That was 23 percent higher than in December 2000, when The Grove broke ground, according to San Diego-based DataQuick Information Systems. Median home prices across L.A. County increased by 18 percent during the same period.

For homes directly east of The Grove, in Gootkin's neighborhood, appreciation appears more pronounced. At 130 N. Gardner St. (which borders Pan Pacific Park, which itself borders the east side of The Grove), a three-bedroom home that went for $350,000 in January 1999 sold for $558,000 in November. After a renovation, it's on the market again for $740,000.

"The big yellow house across the street just sold for $700,000," said Gootkin. "On Gardner Street? That's outrageous."

Despite the outrage, Caruso's claims do have precedent. The 200,000-square-foot Commons at Calabasas, another Caruso development, had an immediate positive effect on nearby home values when it opened in 1998, according to R.J. Thomson, relocation director at Calabasas-based ReMax Centre.

"It gave the community a town center before, it really didn't have one," said Thomson, who added that some homes near the Commons have appreciated as much as 40 percent since its opening. "I firmly believe if you took it out, property values would suffer," he said.

Density issue

But Calabasas is a different market and the increased traffic in an already dense L.A. neighborhood has residents doubting the positive impact of the project.

"We just believe that eventually the property values will depreciate because of the traffic imposition and the danger in raising children in the area," said Diana Plotkin, president of the Beverly Wilshire Homes Association, just west of The Grove.

Residents already are feeling the effect of drivers taking shortcuts on north/south streets between The Grove and LaBrea Avenue.

"When kids have to be careful crossing the street because people are racing down the block, you have to take that into consideration," said a resident whose home is in escrow and asked that her name not be used.

Gootkin said Caruso had taken steps to mitigate the impact of more traffic on the neighborhood, including the four-lane Grove Drive, which will handle north/south traffic between 3rd and Beverly, speed bumps, and additional stop signs either in place or planned for the upcoming months.

More importantly, she said, the proximity of The Grove could make the community more attractive to homebuyers looking for a neighborhood where getting in the car is not always a necessity.

"What makes this neighborhood wonderful is that it's the most walking neighborhood in the city, and here we have a neighborhood where people want to walk," said Gootkin.

"Do you think the people who live right near the Beverly Center walk there?" asked the resident in escrow. "The people in this city use their cars, not their legs."

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