Anschutz Downtown Deal Feeds Growing Student Market
By DANNY KING
Capstone Development Corp. is in escrow to buy a 1.75-acre site a block east of the Los Angeles Convention Center from Staples Center developer Anschutz Entertainment Group for more than $13 million, according to a source close to the deal.
Capstone plans a $180 million, 32-story residential project that will house nearly 1,500 college students.
John Vawter, chief operating officer at Birmingham, Ala.-based Capstone, confirmed the deal but not the purchase price.
"There's a tremendous amount of excitement in the projects planned around Staples Center," he said. "Our development, along with the other ones, is really going to turn the community into a 24-hour situation."
At $175 a foot, the deal for the property is considered an all-time high for vacant entitled land downtown.
The project, which will be marketed to USC students, would play a large part in the possible tripling of downtown's student population over the next few years. Vawter said the university would be offered an option to buy the building, at 12th and Flower streets, after its completion.
"Capstone has talked with the campus but we're not active partners in the project," said Jeff Urdahl, director of housing services at USC. "They may be targeting our students, but Capstone's operating it on their own."
The Capstone development, to be designed by McLarand Vasquez Emsiek & Partners Inc. (Wilshire Courtyard, Water Garden), is one of many downtown projects catering to the student market.
A block south of the site, TriCal Construction Inc. had been in talks to sell its City Lights on Fig project to the Fashion Institute of Design & Merchandising for use as student housing. But Bill Cook, TriCal's chief executive, said the deal had fallen apart. Instead, he said, the developer would be leasing to a mix or professionals and students.
The Capstone acquisition marks the latest step in addressing an increasingly important constituency for downtown's rapidly increasing housing market.
About 10,000 people live in the 6,600 market rate apartments downtown. And while there is no official count of how many are students, about 700 live in the Metropolitan, Renaissance Tower and the Medici apartment buildings alone. With smaller pockets of students living in the Bunker Hill Towers and Promenade Towers further north, that figure could easily exceed 1,000. About half are from FIDM, with most of the remainder likely coming from USC.
"Because the number of units that are available (near USC) is fairly fixed and enrollment is going up, more students are moving to the downtown area," said Urdahl. "Downtown is also seen as a more viable location because of the improvements going on there."
The notion of a collegiate atmosphere downtown is not new. Students from USC, FIDM and the Southwestern and Loyola law schools have long helped fill projects like Flower Street's Metropolitan, built in 1989, and Olympic Boulevard's Renaissance Tower Apartments, built in 1994.
"Our rents may be somewhat comparable to what the school charges, but you have a much nicer environment to live in," said Jim Yi, manager of the Forest City Residential Group Inc.-owned Metropolitan.
Rents at the Metropolitan range from $1,200 a month for studios to about $2,000 a month for two-bedroom apartments, said Yi, who estimated that about 80 percent of the Metropolitan's nearly 500 residents are students.
Newer landmarks such as Staples Center, area restaurants and a new Ralphs supermarket being built nearby, have led more students to move to the area. Yi, who first lived in the Metropolitan 10 years ago, said its student population percentage has steadily risen in recent years.
In the coming years, students looking for the downtown experience will have more to choose from, as South Park is in the midst of a building boom largely spurred by the completion of Staples.
Within the past year, the TriCal site and Flower Street Lofts condo project have been completed while the South Village project at Ninth and Flower streets and Met Lofts a block south have broken ground. Between the four projects, more than 1,600 residential units have or will be added to South Park's housing stock.
"There are so many things to do downtown, and we're five minutes from (USC)," said Phillip Fileccia, business manager with Legacy Partners, which managers the G.H. Palmer Associates-owned Medici. More than 50 students have taken apartments at the 632-unit Medici, just west of the Harbor (110) Freeway.
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