Developer Nears Downtown Deal For Market Site
By DANNY KING
Encouraged by the growing number of downtown residential projects, CIM Group Inc. is finally about to sign a deal to bring a supermarket to its mixed-use development in South Park.
“We’re very close to an announcement,” said John Given, senior vice president at CIM Group, who said that an agreement was “probably weeks” away from being completed. Given would only say that CIM was “talking to two major supermarkets that are very active in the region,” but the firm appears to be close to a deal with Ralphs Grocery Co.
“Ralphs is negotiating a lease document with CIM and everyone’s hoping for a quick conclusion,” said Irving Bonios, senior vice president at NAI Capital Commercial and Ralphs’ representative.
A spokeswoman for Albertsons also confirmed interest in the site, though in less definitive terms.
“We have reviewed the project and we’re interested,” said Stacia Levenfeld, spokeswoman for Boise, Idaho-based Albertsons Inc. “It’s the type of project we’re looking for.”
CIM had begun negotiating with Ralphs as early as April 2001, but delays in nearby residential projects were a factor in pushing Ralphs’ timetable back, according to Bonios.
“When you’re dealing with an area where the housing is not in place and is based on projections, it’s more difficult to conclude a deal than in an area with an existing residential base,” he said.
When built, the store would be the first major supermarket to locate downtown since Ralphs opened its first store in the early part of the last century. The nearest Ralphs is three miles northwest of the proposed site, on Third Street near Vermont Avenue. The nearest Albertsons is five miles northeast, in Highland Park.
Buying into trend
CIM’s 7.2-acre site, bounded by 8th, 9th, Flower and Hope streets, is slated to include 550 residential units, as well as a 50,000-square-foot supermarket. The developer is set to begin construction on 250 loft-style apartments adjacent to the supermarket in November. The market and another 300 apartments are scheduled to start in first quarter 2003.
CIM will also be buying the vacant 70,000-square-foot warehouse at the corner of 11th Street and Grand Avenue for $4.5 million and will be developing a 60-unit loft-condo project, according to Donald Spivack, deputy administrator with the Community Redevelopment Agency.
UCLA, which has owned the land since 1964, is selling the property to the CRA, which is in turn selling it to CIM.
CIM also has a joint venture with L.A.-based Lee Group on the $35 million Flower Street Lofts project between 11th and 12th streets that consist of 91 loft-style condominiums. That project broke ground in July and is scheduled for completion next June.
A half-block to the north, Forest City Residential West Inc. is supposed to break ground on its $55 million Metropolitan Lofts project, with 219 market rate apartments and 55 affordable-rate units, in March 2003.
And across the street from the L.A. Convention Center, at Pico Boulevard and Figueroa Street, TriCal Construction Inc. began work on a $24 million residential project earlier this month. The 100 market rate apartments are to be completed around the end of next year.
“We’re delighted about the progress of South Park,” said Greg Vilkin, president of Forest City Residential West. “Once you establish critical mass, you start attracting services and street life.”
CIM’s investment in South Park came in the fourth quarter of 2001 with the purchase of all but 70,000 square feet of the 9th and Flower streets site from Shuwa Investment Corp. for an estimated $41 million. The CRA bought the 9th Street frontage site slated for the supermarket from Shuwa, though CIM is handling all development duties.
Among the factors cited for the delay in getting a supermarket deal was Staples Center developer Anschutz Entertainment Group’s proposal to build a $400 million NFL stadium on a 17-acre site bounded by 11th, 12th and Olive streets and Pico Boulevard in May. The plan was pulled back a month later when L.A. Coliseum proponents threw their hat into the ring.
“What happened with the sports stadium sort of delayed some projects,” said Bonios. “People didn’t know if they’d have the option to work on some deals.”
The UCLA site being sold to CIM via the CRA, is within the area of the proposed stadium.
Whispers that the stadium plan isn’t totally dead still circulate through the downtown real estate community.
Anschutz Entertainment Group officials did not return calls seeking comment.