Boxing's golden boy Oscar De La Hoya is purchasing the iconic Sears warehouse and store site in Boyle Heights that he frequented with his mother while growing up in the area.
Plans call for an intensive redevelopment of the property, adding housing and retail to the site. The 22-acre property is the largest redevelopment opportunity in East Los Angeles and one of the biggest in the city.
De La Hoya agreed last week to purchase the property for more than $70 million. His company, Los Angeles-based Golden Boy Enterprises LLC, in conjunction with partners Manarino Realty and Highridge Partners Inc., both Southern California developers, purchased the property from MJW Investments Inc.
"We have always wanted to do a project with Oscar De La Hoya," said Bud Ovrum, Los Angeles deputy mayor for economic development. "We really think that his star power will add something special to the project and perhaps make it easier to attract good tenants and good uses because of the high regard in which he is held by so many people."
The property, which is located at Olympic Boulevard and Soto Street, includes a still-operating Sears retail store and a long-closed Sears, Roebuck & Co. distribution center in a 1.8 million-square-foot complex.
The industrial parcel, which is near the Los Angeles River, would require zone changes for a redevelopment plan to move forward. The property also lacks the necessary entitlements for a mixed-use project. Ovrum said that city subsidies will be necessary to make the property's planned retail component which could be between 700,000 and 900,000 square feet pencil out economically.
The property is expected to go into escrow within days and the deal is expected to close in the first quarter of 2008. Sources say the redeveloped site could be opened in 2012.
When asked about details of the project, Bob Manarino said, "We aren't in the position to comment yet." His Irvine-based Manarino Realty specializes in retail development.
About 25 groups expressed interest in the site. Finalists are said to have included CIM Group Inc., Fifteen Group and Capri Capital Advisors LLC.
"It was a long process to find the right buyer," said Mark Weinstein, who heads Santa Monica-based MJW Investments, which had owned the property since 2004 and had long planned a redevelopment of the site.
"The community is really diverse and it is important that the buyers that were selected would meet the needs of the community and have the financial wherewithal and firepower to get the project done," he said.
Although the new owners' plans are not yet clear, Weinstein said he expects the new owners to pursue a plan that would be similar to what he had envisioned.
His plans called for between 300 and 800 housing units, nearly 1 million square feet of retail space, parks and open space.
"I had envisioned a diverse, urban, mixed-use development and these developers with their resources and ties have a really great chance to make it happen," said Weinstein, who worked with the local City Councilmember Jose Huizar and the Mayor Office's on the project.
Golden Boy Enterprises did not return calls seeking comment. John Long, chief executive of El Segundo-based Highridge Partners and a co-founder of Golden Boy Partners, the urban development unit of De La Hoya's company, was traveling last week and was unavailable for comment.
Redevelopment of the property has been discussed by city leaders and stakeholders for years. The warehouse is run down, but the Sears retail store does brisk business in an area that experts say is underserved.
"There is a huge void for retail in that area," said Mark Tarczynski, a senior vice president at CB Richard Ellis Group Inc., who represented both sides of the deal.
CB Richard's Richard Rizika also brokered both sides of the deal. "The whole Boyle Heights area and a 10-mile radius around it are so underserved by retail."
The new owners will work with Sears Holding Corp., the parent of Sears, Roebuck & Co., to build a new Sears retail outlet at the site, Weinstein said.
The site's 1927 warehouse building has been remodeled multiple times over the years. Its tower is a well-known part of the East L.A. skyline and the property is on the National Historic Register. Any redevelopment of the property would preserve the tower, with its distinctive Sears signs, Weinstein said.
The large retail component is expected to attract a variety of retailers. For his part, Huizar would like to see local and national retailers at the site. "I envision the project with mixed-use residential over retail, which offers mixed-income residential opportunities," wrote Huizar in an e-mail interview conducted while he traveled in Israel last week.
Ovrum said that he'd like to see the site become more than a simple shopping plaza.
"It is really important to have a major community-building retail component," he said. "Basically L.A. has conceded the retail market to Monterey Park and Alhambra in that area. It is more than just the sales tax for the city which is still very important."
Redevelopment of the site would be catalytic not just for Boyle Heights but also for the entire area near downtown L.A., said Carol Schatz, who heads the Central City Association, a downtown advocacy group. She called the Sears site the "eastern portal into downtown."
"I think there will be a lot of interaction between downtown and Boyle Heights," she said.
Several people said any redevelopment of the site would be a labor-intensive proposition.
"We understand that realizing a viable redevelopment project will take dedication, flexibility, vision, cooperation, and no small amount of political and financial willpower," said Huizar.
The sheer size of the project, coupled with the historic nature of the site, makes it a tricky development play that will likely involve compromise between community stakeholders and city agencies, including the Community Redevelopment Agency of Los Angeles. Huizar, who took an active role in helping Weinstein choose the buyers, will continue to work closely on the project.
"The project will take a strong meeting of the minds between the City, Golden Boy and the CRA," Huizar said.
Via his Golden Boy Partners entity, De La Hoya has built several projects in California. He co-owns the downtown mid-rise building at 626 Wilshire Blvd., among other holdings.
Weinstein, who built downtown's Santee Village loft project, knows well that the Sears site is a tricky property. He had worked on the project for years and spent about $50 million on it.
In recent times, he came to a "crossroads on a personal level" and realized it was time to sell the property.
"We could have done it but it would have taken a lot of focus for a lot of years," said Weinstein, who added that he has a "very serious girlfriend" and spoke of starting a family. "I was really attached to it I loved the community."
But Weinstein said De La Hoya made him realize that another developer does have a similar passion for the site.
"He said it was his childhood neighborhood and he wanted to restore a landmark for his community," Weinstein said.
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