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Tuesday, Jun 28, 2022

Real Estate Column—Ralphs Looks for Downtown Site as Population Grows

Recognizing that downtown L.A. residency is approaching the critical mass necessary to support a supermarket, Ralphs Grocery Co. has enlisted the services of NAI Capital Commercial to hunt down space for a central-city location.

Pat Barber, senior vice president of real estate at Ralphs, said the company has long wanted to open a grocery store downtown.

“We really do believe that, while there are not enough people living downtown to support a supermarket, there will be in the fairly near future, so we’re very actively pursuing it,” Barber said.

According to a study from the Los Angeles Downtown Center Business Improvement District, there were 12,571 residential units downtown at the end of 2000. Another 493 units are in development and 5,335 more are planned, the study said.

The study projected that there would be as many as 18,400 residential units downtown in the next four years.

Donald Spivack, deputy administrator of the L.A. Community Redevelopment Agency, said his agency has a slightly smaller estimate of existing housing, based on different boundaries. Regardless, Spivack said, the numbers are approaching an important threshold.

“The conversations that we’ve had with the various supermarket chains said they wanted 10,000 households,” Spivack said.

Once the numbers add up, the CRA likely will be involved in helping Ralphs or another grocery chain assemble a site and, possibly, secure subsidies for development. Spivack said other chains have expressed interest in downtown, but Ralphs is first in line because of the aggressive way in which it has pursued the market.

The very first Ralphs grocery store opened in downtown Los Angeles in 1873, Barber pointed out. The second store in the now ubiquitous chain was a replacement for that first store, still downtown. Barber said he can’t remember a mainstream, full-service grocery store being downtown in his 24 years working for Ralphs.

Barber said he and NAI officials have looked at existing buildings and empty lots, searching for the right spot. While the company has identified some specific locations, Barber wouldn’t disclose them or say whether he is in negotiation with any property owners.

Ralphs has not specified any particular timeframe for finding a location and Barber said there’s no way of telling when the population of downtown residents would hit a critical mass sufficient to sustain a full-service grocery store. He said the grocery company employs analysts who pore through population demographics, number and location of competing stores and other information to determine optimal locations for future Ralphs stores.

Residential developments by Gilmore Associates, G.H. Palmer Associates and others have boosted the number of downtown dwellers in recent months and created an increasing demand, Barber said. That should be enough to keep a roughly 58,000-square-foot grocery store in business, Barber said.

Spivack said his schedule for either acquiring or arranging for Ralphs to acquire a site is six to eight months from now. He has identified five potential locations in the southwestern quadrant of downtown, all of which are currently vacant or serve as parking lots. The other option, which is less likely, Spivack said, is converting an existing building into a supermarket.

Marilyn on the Strip

CMG Worldwide Inc., which manages the business of some 250 celebrities, will move its operations down The Strip from the Piazza del Sol to the top floor of the old Playboy building, where a major renovation is nearing completion.

Mark Roesler, chairman and CEO of Indianapolis-based CMG, said the company’s 10 L.A. employees had outgrown the firm’s 1,600-square-foot space. Roesler, a former roofing contractor, said CMG will add as many as 20 more people to the West Coast operation.

The new location could hardly be a more appropriate for the company that manages the estate of Marilyn Monroe.

“We’re very excited about this,” said Roesler. “The top floor was Hugh Hefner’s penthouse. There’s a lot of history there because it was Marilyn Monroe that made Playboy famous. She was the first centerfold.”

To honor that connection, Roesler said, CMG will erect a shrine to Monroe’s star-crossed career in the center of its 8,000-square-foot West Coast headquarters. The shrine will feature dresses worn by the actress, shoes, a brush, the wig made famous in “How To Marry a Millionaire” (contrary to legend, she was not buried in it) and other personal effects.

CMG will spend about $400,000 in tenant improvements before moving into the Playboy building by the end of April. Roesler said he hopes to host symposiums and educational events at the new space, like CMG does at its Legends of the 20th Century Museum in Indianapolis. CMG also represents the estates of James Dean, Babe Ruth, Chuck Berry, Ivana Trump and several other celebrities living and dead.

Blue Whale Lease

New York restaurateur Charlie Palmer has entered the Los Angeles market by leasing 13,500 square feet on two floors at the Pacific Design Center for a catering and special events business to be called Astra.

Bob Roselle, director of leasing at the Pacific Design Center, said Palmer will take 5,500 square feet on the third floor of the Blue Building and another 8,000 square feet on the ground floor. Space at the building is renting for between $3 and $4 per square foot, monthly, Roselle said.

Palmer spokeswoman Melissa Fields said the company already has been contacted by movie studios about hosting and catering premiere parties. The service will not be strictly for the beautiful and rich, though. Fields said Astra will cater weddings, corporate functions and other special events. The operation will be similar to the one that Astra has in the D & D; Building at 979 Third Ave. in Manhattan. (PDC owner Charles Cohen also owns the D & D; Building.)

When the location at 8687 Melrose Ave. in West Hollywood opens in September, it will have facilities to host special events, but Fields said it will not be a walk-in restaurant. There are no plans for a Palmer-owned restaurant in Los Angeles, she said.

With the Astra deal, only 80,000 square feet of space at the 720,000-square-foot “Blue Whale” remain available.

Staff reporter Christopher Keough can be reached by e-mail at ckeough@ labusinessjournal.com.

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