Sushi to Kimchi

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Little Tokyo is about to take on a distinct Korean flavor.

In a transaction that marks a turning point for the area, the Little Tokyo Shopping Center last week was purchased by a group of Korean-American investors.

While non-Japanese landlords of Little Tokyo properties have become common, this sale of the large shopping mall on Alameda Street will lead to a cultural change: Korean businesses, including a grocery, spa and electronics store, will replace the current Japanese tenants, said Ryan Oh of Coldwell Banker, who brokered the deal for the new owners.

Little Tokyo and nearby downtown have seen an influx of Korean-Americans as well as non-Asians, he explained. Meanwhile, much of the ethnic Japanese population has slowly decamped for Torrance and other areas.

“The downtown population is booming and much of Little Tokyo is still catering to Japanese tourists, not the local community,” Oh said.

The three-story, 250,000 square-foot shopping center houses 45 retail tenants including the 40,000-square-foot Mitsuwa Marketplace, a Japanese grocery that’s something of an anchor for Little Tokyo. It is part of a chain with eight other locations in Southern California, Chicago and New Jersey. It is unclear when it will have to leave.

Little Tokyo, bordered by Alameda and Los Angeles streets between First and Third streets, has been home to Japanese businesses for more than a century. There are 300 members of the area’s business association, although not all are Japanese.

In fact, over the past few years, a series of purchases has changed the ownership landscape. The Japanese Village Plaza was bought by American Commercial Equities. Jamison Services Inc., a local Korean-American commercial developer, picked up three properties in Little Tokyo.

Last fall, Persian investors took over what was formerly the New Otani Hotel, now Kyoto Grand Hotel and Gardens. In November, they sold the third-floor restaurant area, including the 30-year-old Thousand Cranes Restaurant, to a Korean restaurant operator.

But those owners are committed to preserving the cultural heritage of the Japanese-themed business district, said Frances Hashimoto, owner of Mikawaya, a Japanese pastry shop that has been in Little Tokyo since 1910. The purchase of the shopping center by the Korean-Americans marks the first time a new owner has moved in with plans to part from the traditions of Little Tokyo.

“If they’re going to make it into a Korean shopping center, then why don’t they go to Koreatown?” asked Hashimoto, whose store has locations in the Little Tokyo Shopping Center and Japanese Village Plaza.

However, bustling Koreatown is overflowing and many Korean-Americans are locating in Little Tokyo.

As a result, the buyers of the shopping center are simply catering to the demands of Little Tokyo’s increasingly residential character, Oh said. The new residential developments near the shopping center, including Savoy and Hikari, are home to a high concentration of young Korean-American professionals.

The buyers are six Korean-Americans who made their money as manufacturers in the Fashion District and who organized Three Alameda Plaza LLC to purchase the shopping center for $35 million. They declined to be named.

Their plans call for a renovation of the shopping center to accommodate new tenants in three anchor spaces: a Korean market that’s about 30 percent larger than its counterparts in Koreatown; a full-service Korean spa with various herbal steam rooms; and an electronics retailer.

There are 42 smaller shops in the center, including health stores and gift shops. About half of them are already owned by Korean-Americans. Nine shops are vacant and the rest have month-to-month leases.

These types of multistory shopping centers, anchored by grocery stores, are experiencing somewhat of a boom in Koreatown a few miles away. There are two such malls near Western Avenue and Olympic Boulevard, and two more are on the way: City Marketplace is near completion on Sixth Avenue and Alexandria Avenue, and there are plans for one more on Western.

But unlike its competitors in Koreatown, the Little Tokyo Shopping Center will not cater only to the Korean community. It will be marketed to the new downtown residential neighborhood with English-language ads. The grocery store, in addition to kimchi, would also carry items typically found in any neighborhood grocery chain.


Changing times

The Little Tokyo Shopping Center has changed hands several times since it was built by Japanese developer Taira Services Corp. in the mid-1970s.

At the peak of the market, it sold to Mitsuwa Corp. for a reported $40 million. When Japan’s speculation-driven bubble economy burst in the early 1990s, Japanese companies scaled down or shuttered operations in Little Tokyo. Mitsuwa sold the building to downtown property owner Richard Meruelo for $13 million.

Also in the ’90s, Sumitomo Bank left Little Tokyo, along with department stores Matsuzakaya and Yokohama Okadaya. The business district never quite recovered from this exodus. Big Japanese businesses took root in Torrance.

But the Little Tokyo district falls under the protection of the city’s Community Redevelopment Agency, which offers assistance to help maintain its cultural roots. Those date to 1884, when an American sailor set up a Japanese restaurant on First Street upon returning from a tour in Japan.

Design guidelines require buildings to reflect Japanese themes, and signs can only be posted in Japanese and English.

That’s why Kyoto Grand Hotel and Garden has maintained a Japanese name, and Richard Lee, new owner of Thousand Cranes in the hotel, has kept the restaurant’s head chef and the kitchen staff, who have been there for 30 years.

Thousand Cranes is one of a few remaining restaurants in Los Angeles that serve Kaiseki dinners, a multicourse traditional Japanese meal. It is served in tatami rooms overlooking a garden that’s a replica of the one in the New Otani Hotel in Tokyo.

Little Tokyo Shopping Center, however, is just outside the district, so it’s under no obligation to remain Japanese under CRA guidelines.

“Still, I’m concerned that the Little Tokyo Shopping Center is about to totally lose its Japanese identity,” said Chris Aihara, chairwoman of the Little Tokyo Community Council. “Since many of the residents in Little Tokyo are Korean, it’s reasonable that businesses cater to them. It’s just a shame to lose the historic value of the area.”

Evolution of ethnic enclaves, however, is inevitable, said Mark Tarczynski of CB Richard Ellis. “Where Chinatown is today, it used to be Little Italy in the 1920s. Ethnic enclaves change over time.”

Hashimoto said Little Tokyo has been her family’s anchor for a century. Her great uncle opened the first Mikawaya on First Street in 1910. Her parents took over the pastry shop in the 1940s, only to shut down for the three years they were taken to a relocation camp in Poston, Ariz., where Hashimoto was born. She took over the business in 1970, moving the bakery to Fourth Street.

“Little Tokyo has worked so hard to stay true to its roots,” she said. The district celebrated its centennial in 1984 and business leaders buried a time capsule under a tree at the Japanese American Cultural & Community Center. The capsule included a note from President Reagan and Prime Minister Yasuhiro Nakasone.

“It’s our hope Little Tokyo will have lived on by the time someone opens that capsule,” she said.

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