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Friday, Feb 3, 2023

Texas Pension Fund Lassos Santee Court for $45 Million

Santee Court, one of downtown L.A.’s earliest residential conversion projects, is nearing a sale to Dallas-based pension fund management firm for $45 million.

Although a deal could still fall apart, L & B; Real Estate has agreed to pay developer Mark Weinstein’s firm, MJW Investments, about $254,500 for each of the complex’s 165 loft apartments.

The deal is dependent on a complicated financial structure. In addition to the $45 million, L & B; Real Estate is refunding five-year tax credits used by Weinstein to finance the development. If the buyer didn’t pay back the tax credits, “I’d have to cut a check from my proceeds,” Weinstein said.

Santee Court, which rehabilitated several dilapidated buildings near the corner of Seventh and Los Angeles streets, also contains 39,000 square feet for ground-floor shops.

Except for a Rite Aid, leasing has gone slowly. L & B; Real Estate has agreed to pay MJW Investments $750,000 more once the retail space is fully leased.

Weinstein said the development wouldn’t be converted into condominiums and that 20 percent of the units would remain voluntarily set aside for affordable housing. “We were painfully careful that the persons buying it will be a compatible partner,” Weinstein said. “Nothing is changing.”

Ronald Z. Harris and Gregory S. Harris, vice presidents at Marcus & Millichap, represented the buyer and seller.

Weinstein is moving forward with other phases of Santee Court (it will soon be renamed Santee Village). He has nearly completed transforming a building at 315 Eighth St. into 64 condominiums, and has begun carving out 216 condos from three buildings on Los Angeles Street.

MJW Investments is also working on entitlements to redevelop the Sears complex in Boyle Heights into 772 units of housing, 700,000 square feet of retail and 4,000 parking spaces with connections to mass transit.

Stadium Addition

Anschutz Entertainment Group plans a $55 million expansion to its Home Depot Center in Carson on the campus of California State University, Dominguez Hills.

AEG is proposing a 200-room hotel with conference and meeting rooms, a 110,000-square-foot building for offices and an athletic training center and potentially a 240-bed athletic residential facility. The project would take up about five acres of surface parking lots north of the stadium along Avalon Boulevard. AEG will replace the 550 parking spaces the project displaces.

The project doesn’t require approvals from Carson because it is on state-owned land. Still, AEG spokesman Michael Roth said the company is working with neighboring residents and elected officials, as it did with the original Home Depot Center project.

Roth said AEG needs the extra facilities for athletes who train at the complex for months at a time. “It will help us to not only reach more athletes but also allow us to bring in more teams and leagues to train and compete at the facilities,” he said.

Pamela Hammond, executive director of the university’s communications and public affairs, said university officials understood the necessity.

“There’s always been a concern about places to stay for athletes who are working out there,” Hammond said. “It’s an official Olympic training center, so you need long-term residential situations for your athletes.”

The Home Depot Center, opened two years ago, includes a stadium used by Major League Soccer, a track-and-field stadium, a tennis stadium and a velodrome.

The California State University Board of Trustees approved the company’s plans on the conditions that AEG resolve any outstanding issues with the university or neighbors, refer to the university in all media announcements, and look at whether the company is paying the university market rates for the development rights.

Another Conversion

Meruelo Maddux Properties LLC has acquired the Union Bank & Trust building in downtown Los Angeles for conversion to condominiums, apartments and ground-floor shops and restaurants.

Principals Richard Meruelo and John Maddux paid $12 million for the distinctive office building at the northeast corner of Eighth and Hill streets. The sellers were a group of investors incorporated as 760 Hill Partners LLC.

The new owners plan to build 90 condo or apartment units in the 12-story, 137,000-square-foot building, with construction expected to be complete within 14 months.

Beyond ground-floor shops and restaurants, plans call for converting a bank vault in the basement into a lounge and restaurant. The residential units will average about 900 square feet, although the top two floors will have two-story units with enhanced rooftop balconies.

Meruelo Maddux Properties has hired Killefer Flammang Architects, a Santa Monica-based firm that has made a name in adaptive reuse, to design the conversion of the 82-year-old building.

Meruelo is the largest property owner in downtown Los Angeles, according to data analyzed by CB Richard Ellis Inc. He also received some notoriety as being the largest donor to Antonio Villaraigosa’s L.A. mayoral campaign.

Eric Kessler, an associate in the downtown Los Angeles office of GVA DAUM, represented the sellers. Kessler also represented the buyers, along with GVA DAUM colleague Kam Elganian.

*Staff reporter Andy Fixmer can be reached by phone at (323) 549-5225, ext. 263, or by e-mail at




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