Thomas Properties Group Inc. has been retained by Korean Air Lines Co. Ltd. to develop a $1 billion mixed-use project at the current site of the Wilshire Grand Hotel. The project would include the first high-rise office tower built in downtown Los Angeles in nearly two decades.
Seoul-based Korean Air wants to build a 60-story office tower and 40-story mixed-use building at Wilshire Boulevard and Figueroa Street. The mixed-use building would feature a luxury hotel with up to 700 rooms, topped by high-end condos.
The 1.75 million-square-foot development would be built on the site of the downtown hotel and conference center, which would be razed. Korean Air has owned the Wilshire Grand nearly 20 years.
Jim Thomas, chief executive of the Los Angeles property owner, developer and builder, said that with its current 88 percent office occupancy level, downtown will need a new Class A office building in the next three to five years.
"To meet that timeline we need to get started right now," Thomas said Thursday, adding that the project lacks the necessary land use entitlements and his company has already started the application process. That could take up to 18 months. "I think Korean Air is pretty determined to move as quickly as possible."
The ownership structure of the project is still being worked out, Thomas said, and his company could end up partly owning the office building with the airline. The airline is a subsidiary of the Hanjin Group of South Korea.
The proposed design envisioned by architect A.C. Martin Partners includes two sleek glass towers connected by plazas and open space at the 2.7-acre site. The 60-story office tower would be the third tallest building in downtown. The tallest is the 73-story U.S. Bank Tower followed by the 62-story Aon Center.
The project could all be built at once as soon as 2011, or in phases, with the mixed-use tower breaking ground in 2011 and the office building in 2014. Thomas said the recession has driven down construction costs and the development should get started as the economy is rebounding.
"It is a very good time to be commencing a project," said Thomas, whose company owns City National Plaza, one of downtown's trophy office developments, and holds about 13 million square feet of commercial real estate across the country. "The most important thing I would hark back to is the demand that is the key to making an office tower go. There is going to be a demand for this iconic kind of office tower."
The last Class A office tower built in downtown was Two California Plaza, which opened in 1992. Since then, there have been proposals for other developments, but none have come to fruition. In 2006, Thomas' former partner, Robert Maguire, announced that his company, Maguire Properties Inc., would develop a 50-story office building at Figueroa and Seventh streets. The $300 million project has since been mothballed.
Thomas is no stranger to building high-rises in downtown. In the late 1980s and early 1990s, he and Maguire built two of the city's most iconic office buildings the U.S. Bank Tower and the Gas Co. Tower when they worked together at Maguire Thomas Partners Inc.
Thomas Properties has already started its pre-leasing efforts and is looking for an anchor tenant. The company won a 2008 competition the airline held to determine a development partner for the property.
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