Delayed downtown L.A. shopping center the Bloc is now aiming for a summer opening as it completes a $180 million transformation.
The extensive facelift on the fortresslike complex once known as Macy’s Plaza – including stores, offices and a Sheraton Hotel – began in 2014 and was originally slated for completion in fall of last year.
But the 1.8 million-square-foot project is still a few months from the finish line, according to developer Ratkovich Co.
Ratkovich President Clare De Briere said the timetable slowed because the company wanted to ensure that tenants such as Macy’s and LA Fitness could remain open throughout the process. The project, which takes up a full block on Seventh Street between Hope and Flower streets, also experienced some construction delays typical of renovations.
“It’s a rehab, it’s not a ground-up building,” said De Briere. “It’s a complicated project.”
She denied recent reports that cash flow has been weak or that the Bloc is at risk of defaulting on a $121.6 million loan set to mature in April. Instead, she said the Bloc asked for a loan extension as it finishes negotiating a new one.
“It’s not an atypical thing to do,” said De Briere. “It’s just a better-safe-than-sorry frame of mind.”
She added that Ratkovich, which bought the property in 2013 for $241 million with Washington D.C.’s National Real Estate Advisors and Blue Vista Capital Management of Chicago, would be able to pay off the existing loan if the new one falls through.
Jeff Kreshek, vice president of West Coast leasing at Federal Realty in El Segundo, said the project’s outlook is promising.
“It’s one of the most fascinating projects in Southern California right now,” he said. “It’s a brick fortress that’s been sitting on a city block for years. They’re modernizing it and changing it to how consumers shop today.”
The redesign is aimed at bringing the 1970s mall into the 21st century, following an open-air trend embraced by many Southern California mixed-use projects.
Construction crews last spring ripped away the mall roof at Seventh, converting three shopping levels into an outdoor plaza. Macy’s is slated to unveil a storefront there at the end of April. Ratkovich aims for the plaza to host cultural events, art displays, concerts and programs such as yoga classes. The facelift will also tear away some of the mall’s windowless brick walls, allowing easier visibility and access from surrounding streets.
The retail space at the Bloc is now 77 percent leased, with Macy’s accounting for 50 percent.
Retailers BrandsWalk, General Nutrition Corp., Mr. G Toys and T-Mobile along with eateries Urban Oven, Killer Café and TLT Food are scheduled to move in. Jewelry Pavilion, Kodak, Eyes on the Bloc and the U.S. Postal Service along with Macy’s and LA Fitness are already open.
De Briere said picking tenants is a deliberately selective process and she could not estimate when the roster will be complete.
One attraction for tenants is the Bloc’s direct connection to the local subway station.
“The transit structure downtown is unparalleled and it’s improving every day,” said De Briere, noting that the Expo Line will soon offer service to downtown from Santa Monica.
Ratkovich development manager Milan Ratkovich said that proximity to transit was a big factor in convincing a couple of office tenants to relocate to the Bloc’s 33-story office tower, which is 55 percent leased and is getting a garden lounge on the roof.
The adjoining Sheraton Hotel, meanwhile, recently completed a $75 million renovation of nearly 500 rooms and opened a restaurant called the District on the Bloc.
The renovation comes as Westfield Corp. works on an $800 million expansion of its Century City mall that will double the amount of parking there and add a three-story Nordstrom as well as the first West Coast Eataly from star chef Mario Batali.
In addition, the Beverly Center next month will detail extensive renovations plans of its own. Chief Executive Robert Taubman of Taubman Co. in Bloomfield Hills, Mich., the owner of the L.A. mall, said in an earnings call last week that the facelift will be comprehensive and very expensive.
Downtown has boomed with new residences, restaurants and shops in the years since Ratkovich took over the Bloc. Along Seventh alone, construction on the 73-story Wilshire Grand Tower is underway and business is bustling at restaurants Bottega Louie, Mas Malo and Little Sister. A Whole Foods outfitted with a bar just opened around the corner and residential towers are under construction on the surrounding blocks.
“Looking at the entirety of what’s going on, there are great high-end things and great midlevel things,” said De Briere. “It’s really exciting.”
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