There’s never any weekend parking in the small lot next to Nick’s Cafe, a 67-year-old greasy spoon on the northern edge of Chinatown. Brunch traffic has picked up in recent years and customers often have to park a good walk away, next to blocklong industrial buildings, junkyards and a 32-acre dirt lot with the lofty name Los Angeles Historic State Park, better known as the “Cornfield.”
Nick’s bustling weekend scene stands out against the warehouse-wasteland vibe of the area. That vibe is on the cusp of changing.
A 2013 zoning change covering a 660-acre portion of the city beginning in northern Chinatown has spurred a flurry of investment and development. More than 50 properties have traded hands in the past two years, according to data from CoStar Group Inc., and real estate sources estimate there are at least a dozen developments in the pipeline, including a massive mixed-user with up to 685 residential units planned by downtown L.A. developer Atlas Capital that could increase the amount of housing in the traditionally industrial area by roughly 30 percent.
What’s novel about the Cornfield Arroyo Seco Specific Plan, or CASP, as the planning overlay is known, is that it established the Cornfield and its environs as an official planning area, one of the few in Los Angeles where there is no minimum or maximum parking requirement for developments.
Throughout the city, parking requirements are linked to the square footage of a project – one space for every 250 square feet of retail, 500 square feet of office, etc. – but rather than creating chaos, CASP is expected to actually improve parking in the area over time.
“In this area, the city gave us a gift and said, we’re gonna trust that developers know that the area won’t be successful without parking and we’re gonna leave it up to them,” said Bryson Reaume, chief executive of downtown construction firm City Constructors Inc., which is both building and developing several projects in the area.
The impetus for the zoning change, which will allow for more residential, retail and creative office uses, was the anticipated completion of California’s $20 million makeover of the state park, set to be finished in December.
That, in turn, has led to a flurry of activity that has driven up property prices roughly 30 percent over the last couple of years as developers who had been focused on downtown or Chinatown are drawn north.
“Limited options in the market are forcing developers to look outside of normal blocks,” said Ben Stapleton, a vice president at Jones Lang LaSalle Inc.’s downtown office who is representing the seller of two CASP sites. “You combine that with the low density of the area and the mixed-use growth potential of the CASP plan and you have the potential to create a neighborhood that has developments you simply can’t do in other parts of city. It’s an experiment to change zoning to create opportunities in one of the only areas where there is the land to do that.”
The Cornfields area dates to the 1870s, when what is now the park was a Southern Pacific Railroad train yard. Local lore holds that it got its name from seeds spilled from train cars pulling into Los Angeles, unintentionally planting corn. The name has since come to refer to the neighborhoods surrounding the park that are included in the CASP.
The CASP, driven by former 1st District Councilman Ed Reyes and the City Planning Department, created three mixed-use zoning districts:
Urban Village, allowing for four- to eight-story buildings; up to 25,000 units with a density bonus for affordable housing. Most of the Urban Village zoning is near the park.
Urban Center zoning, focused on the kind of dense commercial development that could create jobs; allows mixed-use buildings of 10 to 15 stories close to transit.
Urban Innovation, zoned for up to 2.5 million square feet of light industrial and creative office uses; two to five stories allowed, and a limited amount of retail and residential.
“When we started on the (CASP), the area was zoned industrial and we knew that (zoning for) housing was important,” said Claire Bowin, a senior city planner who spearheaded the creation of the plan. “But we also wanted to maintain some industrial, especially given how little industrial zoned land we have (in Los Angeles).”
How dramatically the Cornfields will change as a result of the zoning change might hinge on a vacant five-acre lot at Spring and College streets, just east of the Gold Line station. Downtown developer Atlas acquired the site when it purchased L.A. real estate investment firm Evoq Properties Inc. for $357 million last year.
Evoq, formerly Meruelo Maddux Properties Inc., had proposed a two-tower project called College Station that would include up to 685 apartments, ground-level retail, restaurants, rooftop pools and a pedestrian plaza. At 20 stories tall, the towers would be the tallest buildings in the area immediately north of downtown.
Representatives of Atlas, which assumed control of the project with the purchase, did not return calls seeking comment on the project, which is said to be about three-quarters of the way through the entitlement process. Because that process was started by Evoq in 2012, before the CASP’s density restrictions went into effect, the project is not constrained by the height restrictions that new developments face.
If approved, Atlas’ College Station would dramatically increase the amount of housing in the Cornfields.
In 2007, there were 1,814 housing units in the CASP, housing roughly 5,000 people, according to an environmental impact report prepared by the city of Los Angeles in 2011. That meager amount includes the 449-unit William Mead Homes, a public housing development at 1300 N. Main St. run by the Housing Authority of the City of Los Angeles.
With activity and values on the rise, JLL’s Stapleton has been on the prowl for new clients.
“We’ve been talking to businesses in the area and a lot of them didn’t realize that their buildings had been rezoned, let alone how valuable it could be to sell,” he said. “Sometimes existing companies don’t really want to move. But then sometimes, you get involved with families who see this as their legacy and their opportunity to create generational wealth.”
While property owners may need guidance to understand what has happened with the CASP, many in the real estate acquisition business have been shark-like in their approach.
“We get unsolicited offers once a month,” City Constructors’ Reaume said. “People send out mailers to every property in the Cornfields, trying to buy. It started happening right after people caught on to the (CASP). They realized the rezoning and the opportunities.”
City Constructors was going to develop a former poultry processing plant at 1418-22 N. Spring into its own creative offices. But the firm saw so much interest in the space it decided the property would be more valuable to build out as a 21,000-square-foot mixed-use development to lease to creative office and retail tenants, Reaume said.
City Constructors is converting a 6,000-square-foot freestanding warehouse on a 10,000-square-foot lot at 129 Llewellyn St. to be its home base instead.
The chicken building project, as it’s informally known, is schedule to be completed by the end of the year. It will include a roof deck overlooking the park that might be leased to a wine bar and Reaume is looking for a coffee retailer for the ground-floor space facing the park.
The building will be leased by Carle Pierose, a partner at Santa Monica’s Industry Partners who is also advising City Constructors on its own office conversion. Pierose said one-third of the office tenants that have viewed the unfinished chicken building are in the fashion business. Many call initially to see space in the Arts District and end up touring the Cornfields, where the rents are lower and the smaller spaces fit smaller companies. The parking’s better, too.
“A huge thing (the Cornfields) has over the Arts District is better parking,” he noted.
In addition to owning the chicken building and developing its own office, Reaume’s firm is working on several other projects in the CASP as a builder focused on creative office and adaptive reuse.
The firm will re-imagine four heavily graffitied buildings at 1726-56 N. Spring. The four were acquired by Downtown Properties, a downtown L.A.-based U.S. affiliate of Hong Kong firm GAW Capital Partners, for $5.5 million in 2013. Collectively, the buildings are 50,000 square feet.
Dan Lee, senior vice president of investments for GAW’s U.S. operation, said that two of the stand-alone warehouses on the campus will become restaurants and bars. A 15,000-square-foot building will be converted to creative office for tenant Windish Agency, a Chicago live-music booking firm. Its fourth property is a 27,000-square-foot building, and one option for that site is the development of a venue for live music.
The firm has also purchased a large parking lot at 1712 Naud St. to serve the campus. A 15,000-square-foot building on that lot might also be converted for creative use.
Lee was attracted to the Cornfields because of its grungy artistic aesthetic. His campus is not the only one in the area covered by artistic graffiti. KGB Studios, a filming space and studio campus nearby at 1638-40 N. Spring, is similarly tagged with vibrant designs and colors.
“The graffiti is a big reason we chose the site and the interested tenants are like-minded creative groups that like the feel of the property,” he said.
They are not the only eccentricities in the industrial area.
A beat-up car parked in front of 1745 N. Spring has plants, and even a tree, growing out of it. The building is home to the “Not a Cornfield” project, artist Lauren Bon’s public art installation funded by an Annenberg Foundation grant, which involved planting actual corn in the park before its makeover began.
“It’s got character,” Lee said. “We love the area because of the zoning, the proximity to all parts of L.A., particularly to areas in the northeast like Silver Lake. And because we have so much frontage along the L.A. River at the property, we have a huge opportunity to develop along the river.”
A proposed $1 billion makeover of the L.A. River is to go before the Army Corps of Engineers’ Civil Works Review Board this month. If it passes, the plan will head to Congress, which will decide whether or not to allocate the funds. The facelift would create wetlands and bike trails, among other improvements, along an 11-mile stretch north of downtown through Elysian Park, including the area around the CASP.
While the changes have real estate developers and brokers bullish on the Cornfields, not everyone is thrilled with all the attention.
Rod Davis, owner of Nick’s, is not too thrilled about the prospect of massive change in the area. He has been getting offer letters in his mailbox to sell the diner, much to his chagrin.
“Obviously it concerns me, change concerns me, because we’ve been open for 67 years and I want to make sure we’re still there,” he said. “Also, from a historical point of view, there’s not a lot of diners left in L.A., and it would be sad if L.A. lost that part of its history too.”
Kim Sinclair, a waitress at Nick’s, said she has already seen the seeds of change in the area. She was the first employee hired at Nick’s six years ago when Davis took over.
“Nick’s was filled with law enforcement and firefighters back when I was first hired,” Sinclair said, leaning against the horseshoe counter that surrounds the kitchen and lets diners watch their bacon sizzle. Six years ago, the joint had never been open on a Sunday and Saturdays were so slow it hurt, she said.
Over the past three years, Nick’s customer base has grown dramatically, thanks to the residential development boom in the surrounding areas of downtown.
“Now we’re open on Saturdays and Sundays with a one-and-a-half hour wait, and it’s all families and residents,” Sinclair said.
Many developers think that when the park opens at the end of the year the pace of development will kick into high gear.
Reaume said the ease of development and the small size of the neighborhood’s “hot zone,” which he defined as the area from North Broadway to North Main Street to the river and back down to the Chinatown Gold Line station, would lead to rapid change.
“If you look at what happened to the Arts District, it took seven years,” he said. “This area is exciting because it has that same style of building but (the core of the Cornfields) is such a small area that you can see it becoming a community in a 36-month period.”
Many of the changes that have already gone down in the Cornfields have occurred behind closed industrial doors.
Because reuse projects in the CASP do not require permits from City Planning unless an owner requests a zoning change or is doing new construction, blocklong windowless warehouses have been converted to artists’ lofts, galleries and small creative businesses without much fanfare. Very few of them are visible from the street.
An exception is Shareen Vintage, a women’s bridal and second-hand clothing business at 1721 N. Spring. Owner Shareen Mitchell, who has another store in New York, is known for her celebrity clientele. A chalkboard sign outside the 6,600-square-foot industrial space announces there’s a vintage shop inside, followed by a sign at the entrance that states the rules: “No boys allowed.” Mitchell opened her Cornfields location in 2011.
“I was kind of a pioneer,” she said. “Any area with a bridge, a rail yard and water is inspired, and with this open space I could feel the energy was high.”
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