Development of the grassy hill below California Plaza next to the iconic Angels Flight funicular could be the key to Bunker Hill’s future, real estate analysts said.
Any of the three development plans on the table for the site have the potential to energize the area by attracting more long-term residents, bringing in more mainstream retailers and stabilizing the office market, they said.
The three proposals for what city officials dubbed Angels Landing each involve construction of dramatic towers that would include housing, retail, restaurants and public space atop the sloping hillside. The site is surrounded by the funicular to the east, South Olive Street under California Plaza to the north, West Fourth Street to the west and South Hill Street to the south.
“I think it’s going to help reduce vacancy in the office properties because you have another amenity in place where people can live that’s nice and high-end,” said Chris Penrose, first vice president at downtown-based brokerage CBRE. “It contributes to the surrounding amenity base with Angels Flight, the nearby Grand Central Market, and all the new restaurants around Bunker Hill.”
Downtown office vacancy rates ticked up in the third quarter to 16.7 percent from 16.3 percent in the previous quarter and a year earlier, according to data from Jones Lang LaSalle Inc. That was above the countywide average of 14.8 percent vacancy.
The retail market is more likely to be invigorated by the development, said Mike Condon Jr., an executive managing director in the downtown office of Chicago-based brokerage Cushman & Wakefield.
“If you end up instilling it with a large population who are going to use the ground floor amenities in a lot of those Bunker Hill high-rises, I think it’s only going to be an added benefit,” Condon said.
As the resident population changes, so should the retail makeup, he said.
“You’re not seeing a lot of vacancies, but the tenants are starting to see turnover,” he said. “Where the area used to be smaller mom-and-pop-type retail facilities, I would expect to see more higher-level brands and national retailers coming in to support the growing demographic of residents.”
City officials announced last month it had selected three finalists to develop this rare piece of downtown turf: Vancouver-based Onni Group and Natoma Architects of San Francisco; Brentwood’s Lowe Enterprises and San Francisco-based Gensler; and a team comprised of San Francisco’s MacFarlane Partners, downtown-based Claridge Properties, Peebles Corp. and Handel Architects, both based in New York.
The bid process is overseen by the city’s legislative analyst office, and a panel comprised of unelected city officials and private-sector experts is expected to decide the winning project sometime this month.
The Lowe and Gensler proposal envisions a 1.27 million-square-foot mixed-use “vertical campus” for UCLA that would include the third-tallest building in Los Angeles at 883 feet, said Tom Wulf, senior vice president at Lowe Enterprises. The project plan features 600,000 square feet of academic and office space and 200,000 square feet of cultural and civic space for public programs. Students, teachers and employees would be housed in 655 units on the property.
There were preliminary discussions with the university, Wulf said, but UCLA has yet to make a decision on involvement with the plan. A representative for UCLA said school officials declined to comment on the proposal.
The Onni and Natoma plan features two towers with 650 apartment units, 120 condos, 230 hotel rooms, a 20,000-square-foot museum dedicated to Angels Flight and a 30,000-square-foot elementary school.
Mark Spector, senior development manager for Onni Group, said 10 percent of the rental units would be workforce teacher housing.
The mixed-use plan also features 165,000 square feet of commercial space, including a grocery store, restaurants and retail shops, in addition to two acres of public open space.
The third proposal envisions a mix of uses that includes two towers with 400 apartment units, 250 condos, 500 hotel rooms, 50,000 square feet of restaurant and retail space and a K-5 charter school operated by the Los Angeles Academy of Arts and Enterprise, said Don Peebles, chief executive of Peebles Corp.
Open space elements include a proposed 13,700-square-foot Hill Street Plaza and a 25,400-square-foot Angels Terrace. Peebles said at least 5 percent of the apartment units would be affordable.
Jessica Lall, president and chief executive of the Central City Association business advocacy group in downtown, said development of the Angels Knoll site is critical for the neighborhood.
“I think when you look at this from a business perspective, what’s really missing in downtown Los Angeles is the sites that can connect neighborhoods,” Lall said. “This site in particular will better connect Bunker Hill to the historic core, and all three projects have opportunities for people to walk through the provided amenities.”
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