Veteran developer Robert Maguire is teaming up with L.A. Live developer AEG to look into building what would be downtown L.A.’s first new office high-rise since the 1990s.
The proposal is still in the early stages, but Maguire said he envisions a 600,000-square-foot building on what is now a parking lot across the street from the L.A. Live entertainment complex and next to two proposed Marriott International Inc. hotels on Olympic Boulevard.
Maguire disclosed the plans at a Building Owners and Managers Association event this month. He said the idea is to attract tech, entertainment and creative firms, and eventually create a district for such businesses in the area. San Francisco’s Gensler, the nation’s largest architecture firm, has been hired to design it.
“The thing that was fascinating to me is the whole idea of creating an entertainment and media district with AEG,” Maguire told the group at the April 13 meeting at the Hyatt Regency Century Plaza hotel.
AEG spokesman Michael Roth confirmed that AEG and Maguire are involved in discussions regarding development of property AEG owns at 917 Olympic Blvd. between Francisco and Georgia streets, but declined to elaborate. Maguire did not return calls.
It’s not clear just how far along plans are for the project, but Maguire told the group he would like to build the tower by 2015. If successful, it would be the first high-rise office construction downtown since 1992, when R&T Development constructed a 25-story building at 801 S. Figueroa St. and Metropolitan Structures built the 52-story Two Cal Plaza at 350 S. Grand Ave.
At 600,000 square feet, the proposed building would be larger than R&T’s building but slightly smaller than Union Bank Plaza at 445 S. Figueroa.
Maguire did not say how many floors he envisions, but to get 600,000 square feet on a lot of that size would imply a building of at least 20 stories. Zoning restrictions cap the height of a building on that lot to 350 feet, which means a maximum of 30 stories or so. Creative office space generally has higher ceilings.
The news notably comes just weeks after Korean Air, citing downtown’s high vacancy rate, announced it would no longer build a 1.5 million-square-foot office tower as part of its $1 billion redevelopment of the Wilshire Grand Hotel. A healthy office market is generally considered to have a vacancy rate below 10 percent, while downtown’s was 17.2 percent in the first quarter, according to Jones Lang LaSalle Inc. Korean Air’s new office space would have been competition for the Maguire-AEG project.
Broker Mark Tarczynski, executive vice president of Colliers International in downtown, said he had heard talk that Maguire and AEG might want to build a high-rise, noting that the idea of focusing on creative office space made a lot of sense.
“More and more office tenants moving into downtown L.A. are looking for creative office space rather than Class A space,” Tarczynski said. “Everybody wants the new cool, hip creative office. He’s going to double the size of the available creative office space in a heartbeat.”
Maguire, 78, was a key force downtown in the 1980s, developing some landmark properties, including the 72-story U.S. Bank Tower – the tallest building in the Western United States – Wells Fargo Tower and Gas Co. Tower.
But like many developers, he ran into trouble in recent years. He expanded too quickly and was eventually ousted from his company, Maguire Properties Inc., which has now become MPG Office Trust Inc. in an effort to sever ties with his name.
He’s also tried previously to resume developing projects in downtown. In 2006, he announced he would build a 50-story project near Seventh and Figueroa streets, but that never materialized due to little demand.
Although there has been no discussion of the cost of the proposed high-rise or financing, this time he’s teamed up with AEG, which has the resources and motivation to see through such a development.
AEG is eager to see more development around its $2.5 billion L.A. Live complex and Staples Center, which it also owns. It sold half of the parcel next to the proposed office building last year to a Seattle developer, which is slated to begin construction of a Courtyard by Marriott and a Residence Inn by Marriott this year. AEG also is behind a highly publicized plan to build a $1 billion National Football League stadium and Los Angeles Convention Center expansion next to L.A. Live.
Maguire told the BOMA crowd that his project is not tied to the NFL stadium, but he does believes that the stadium, as well as a renovated and expanded Convention Center, would be helpful.
“I think we can do it without it, but in terms of getting sustained growth, I think the stadium and Convention Center would be phenomenal,” he said. “I think it does create an exciting market.”
Maguire said he is drawing inspiration for the high-rise from a project that he developed in Playa Vista known as Water’s Edge, a 6.5-acre office complex at 5510 Lincoln Blvd. The two Class A buildings, totaling 240,000 square feet, were constructed in 2002 and designed by Gensler. They have large glass walls, open floor plans and tall ceilings. Redwood City-based video game company Electronic Arts Inc. occupies most of the building today.
Maguire also said he is “tracking” at least two unnamed companies that might sign leases for the new building, and added he would like to attract tenants from the Westside, which has become a haven for high-tech and creative firms.
“There’s a way to attract entertainment and media companies from West L.A.,” he said. “And that’s what we’ve embarked upon and I think we can do it successfully.”
Downtown boosters welcome that plan. Carol Schatz, chief executive of the Central City Association, said that a new entertainment office district would be good for downtown, so long as the companies come from other areas.
“It’s OK to steal from West L.A. but not from the central business district,” she said with a laugh. “The more critical mass we create downtown, especially with a broad variety of uses, the better. We are still a ways away from needing a high-rise office building probably and this is an effort to bring some creative commercial tenants.”
She noted that several years ago downtown property owner Thomas Properties Group Inc. tried to bring Yahoo Inc. to one of its downtown high-rises from its longtime Santa Monica location. She said Yahoo was eventually deterred by the city of L.A.’s taxes.
Still, other companies have made the move. Gensler itself moved to a high-profile space in downtown from Santa Monica in November. In addition, filmmaker Michael Bay moved his commercial production company to downtown last year.
There also has been talk among downtown brokers that the NFL, which now has local production offices in Culver City, might want to move downtown, especially if AEG is able to land an NFL team. That would put the league in close proximity to the stadium. The league’s lease at 10950 Washington Blvd. expires in 2015.
Broker Tarczynski, however, said that it’s not just creative firms that are looking to take more interesting space these days.
“Law firms are coming out of the Class A office towers and saying we want a more hip office environment,” he said. “So not only do you have the clothing designers and the Internet startup firms that are looking to take up this creative office space but now you have these traditional Class A occupiers looking for creative office space.”
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- Purchases Shore Up Long Beach Office Market
- Landlords Chase Higher Rents Despite Return of High-Rise Space
- 50 Wealthiest: Robert Maguire #44
- More Hotels Weigh Downtown Check-In
- Kiss the Sky
- PLAYA---Maguire Nears Sale of Entire Portfolio
- Lennar Entering Downtown Craze
- Penthouse Rent Tops Out At Steep $19,000 a Month