Pending Land Swap May Give Developer 10 Acres of VA Site
By DANNY KING
Watt Commercial Properties is in discussions with the U.S. Army to develop a 10.1-acre parcel at the southwest corner of the Veterans Administration campus a prime piece of Los Angeles real estate that could be worth upwards of $55 million.
The Santa Monica-based development company is working on a land-swap deal with the Army that would give Watt Commercial the site at the corner of Wilshire Boulevard and Federal Avenue. In exchange, Watt would purchase and develop a replacement facility for the Army, according to an Army official.
“We’re still in the due diligence period because it’s an exchange of government property,” said Lt. Col. Richard Cole of the 63rd Regional Support Command Engineer office in Los Alamitos, which is in charge of Army facilities statewide. “We hope to be further along some time this year.”
The discussions are the latest in a series of proposals involving development of portions of the VA campus over the years, and are bound to elicit howls from local residents and politicians.
“Here we go again,” said Flora Gil Krisiloff, vice president of the West L.A. Area Planning Commission, when told of the ongoing conversations. “They are always kicking around things. I would hope they would honor a more public process.”
A plan in the 1980s to sell a portion of the property prompted then-Sen. Alan Cranston to sponsor what became known as the Cranston Act, preserving 109 acres of the 388-acre site as open space.
In July 2001, Congress blocked a development proposal that would have added 4.5 million square feet of medical and commercial buildings to the campus. Later that year, a 300,000-square-foot development on 25 acres of VA land was brought down by both political and community opposition that will probably factor into the Watt Commercial proposal.
Watt Commercial has been talking to the Army for the better part of a year. Last May a meeting was arranged with Rep. Henry Waxman, D-L.A., to discuss the potential land-swap and development, according to Lisa Pinto, district director for Waxman, whose district includes the site.
Jennifer Hoberman, an executive at Watt Commercial, also met with L.A. Councilwoman Cindy Miscikowski, whose district borders the site, to discuss both a mixed-use and a residential development, according to Kristen Montet, planning deputy for Miscikowski.
Neither Hoberman nor Miscikowski would comment on the process. Waxman could not be reached for comment.
L.A. County Supervisor Zev Yaroslavsky, whose district wraps around the site, opposed previous attempts at development. He could not be reached for comment on the Watt Commercial discussions.
Far from certain
The development group, called Holderman Hall LLC for one of the site’s buildings, has not been specific about its plans, according to Cole, and there have been no discussions with elected officials since the May meeting with Waxman.
Also in question is the Army’s right to deed the property to a private developer, according to Ralph Tillman, director of asset management for the department of Veterans Affairs, Greater Los Angeles Healthcare System.
The site, half of which was deeded to the Army from the VA in 1956 and the other half in 1976, houses three buildings that are home to 700 military administrators. “If in fact the Army was to determine that they no longer needed the property, the property should revert back to the VA,” said Tillman.
Central to the deal is an appraisal that was supposed to be completed by the end of last year but has yet to be validated by the Army.
“The basis of the exchange is either the appraised value or the replacement of the (facility) requirement,” said Cole. “It’s going to be a very expensive proposition.”
Also key is the provision of an alternate site for the West L.A. facilities. Watt is expected to present a list of potential properties to the Army next week, said Cole.
“Normally, we would look within a 25- to 50-mile radius,” said Cole, who noted that both federally-owned sites (which would enable Watt to develop a larger facility because there would be no land purchase) and non-federally-owned sites would be considered. “But because this gives us an opportunity to restructure, the best place for the long-term could be further out.”
Watt Commercial, which is developing a 20-acre business park next to Cal State Long Beach, owns about 4 million square feet of office, retail and industrial space in Los Angeles County, including Century City’s Watt Plaza and Baldwin Hills Shopping Center.