[LongBeachUrbanist]

Hey bobcat, I saw this the other day and realized its not on the list. I think construction is almost complete. The following is from the CRA's new website.

Grand Avenue Apartments
Northwest corner of Grand Avenue and Venice Boulevard

The Grand Avenue Apartments will provide 62 low-income affordable family housing units, plus parking for building residents and visitors and staff from the neighboring California Hospital Medical Center.

[BrighamYen]

^ Yeah, I passed by that about 2 weeks ago and it looks pretty damn nice! Right up there with Alexan Savoy!

[bobcat]

Hey bobcat, I saw this the other day and realized its not on the list.

Thanks! It's been added.

[LongBeachUrbanist]

I'm reposting a couple of posts from a different forum, because they contain some creative ideas for the lot north of Pershing Square, plus news about potential residential development there.



The northeast corner of 5th and Olive (formerly the home of the grand Philharmonic Auditorium) is a big ol' hole downtown that we'd like to see filled.

Idea:

There must be an upscale department store chain in Mexico City that would love to open its first U.S. flagship store in downtown Los Angeles. Wrap it around the art deco building at the corner of 5th and Hill and top it off with 20 or 30 floors of offices and apartments/condos.

Another idea: A Target store downtown; call it the Target Tower and top it off with offices and condos.

That vacant lot at 5th and Olive is being sold to a residential developer. Will post more when I know more. And the art deco building at 5th and Hill on same block is being permitted for condos. Not certain if there is any connection between the two developments.

[BrighamYen]

^ An upscale Mexican department store? That sounds unlikely, but it would definitely be fantastic if it existed and DID decide to open up in Downtown LA!

I am unaware of any native upscale establishments in Mexico. Someone please educate us!

[LongBeachUrbanist]

Palacio De Hierro (http://www.elpalaciodehierro.com.mx/ph/index.shtml) and Liverpool (http://www.liverpool.com.mx/) are two big department stores in Mexico City catering to the mid-to-upscale market.

[WesTheAngelino]

^ An upscale Mexican department store? That sounds unlikely
_________________________________________________

Why does that sound unlikely?

[bobcat]

The real question is why an upscale Mexican dept store would want to open a branch in DTLA. It seems like they would more likely choose an upscale Hispanic neighborhood. DT is becoming increasingly upscale, but most people moving in are not Hispanic.

[BrighamYen]

Palacio De Hierro (http://www.elpalaciodehierro.com.mx/ph/index.shtml) and Liverpool (http://www.liverpool.com.mx/) are two big department stores in Mexico City catering to the mid-to-upscale market.


Oh cooL! Will check them out.

[BrighamYen]

^ An upscale Mexican department store? That sounds unlikely
_________________________________________________

Why does that sound unlikely?


Because Mexico isn't a nation known for high fashion. It was an assumption, and I'm glad LBU educated us here with some wonderful stores!

[citywatch]

I'm reposting a couple of posts from a different forum, because they contain some creative ideas for the lot north of Pershing Square, plus news about potential residential development there.

I'm guessing the forum you got those messages from is affiliated with newdowntown.com. Too bad everyone interested in the hood couldn't gather in one place, because it takes a lot of ppl to keep the line of info & discussion moving at a good pace. As for the NE corner of 5th & Olive, if you hadn't pasted the comments from that other message board, I'd never have known anything possibly major was being aimed at that intersection. The parking lot there has been a sore point for a long time, & it certainly hasn't been a good replacement for the old Philharmonic auditorium bldg, or a good neighbor to the Biltmore.

Inserting good quality devlpt at 5th & Olive is very important now more than ever before because of the completion of the metro417 apt proj directly to the north & the planned conversion of the bldg at the NW corner of 5th & Hill.

BTW, if anyone knows anything about the response to the newly opened metro417 bldg, & if the owner is leasing apts at a pace similar to or faster or slower than what occurred with the Pegasus & Gas Co Lofts projs, your inside scoop would be worth reading here.

[BrighamYen]

^ Hehe, the guy who owns the land is smart. :) He's nice too. So something good could definitely come out of it.

Our Housing Tours are designed to help lease out the residential like Metro417. They just opened and it's fabulous! They shouldn't have a problem leasing that up either because it's still cheaper than The Met Lofts in South Park.

[LongBeachUrbanist]

^ Metro417 looks great from the outside. (Except the parking structure, and even that doesn't look that bad.)

[citywatch]

They shouldn't have a problem leasing that up either because it's still cheaper than The Met Lofts in South Park.

I find it interesting that, so far, the new apt projs that have filled up the fastest from opening, or even before opening day, are the ones built by GH Palmer. The response to that devlpr's bldgs contrasts with the time it's taken to fill up the Pegasus & Gas Co Lofts, which took over a yr to reach a somewhat high level.

I know the leasing agent for the Gas Co Lofts predicted her bldg would be almost 100% occupied by late 2004, & then I read about your DCBID's major housing tour earlier this yr, in which it was reported that, because of that event, quite a few units in the Gas Co Lofts had been leased. I was happy to read that, but I also had assumed before then that the bldg already was so full that not many of its apts would have been available to begin with.

At this early stage, it's better if response is closer to what Palmer's apt bldgs, so far, have received, because the greater the demand, the faster the pace will be in getting projs greenlighted & completed, & getting all the deadzones replaced & long abandoned bldgs cleaned up.

[LongBeachUrbanist]

The area around Palmer's developments are deadzones.

I'm not even referring to architectural taste here, just the lack of people and lively activity in those areas. You don't have to be a surface parking lot to be a deadzone.

For the sake of a vibrant urban center, I'll take a building like Gas Co. Lofts that activates the streets over a GH Palmer bunker any day.

[citywatch]

The area around Palmer's developments are deadzones.

That's why there are apparently factors beyond their immediate hood that have made them so popular with residents.

The way all the new apt or condo projs are being greeted can be quite unpredictable. I believe the Little Tokyo Lofts, an old converted bldg where the Westinghouse Co once was located & which is surrounded by the really gritty hood of 5th & San Pedro, filled up faster than the Pegasus, which is in the nicer, cleaner hood around 6th & Flower.

Such unpredictability is why I'm very curious how the Alexan Savoy, which like the Palmer bldgs is totally brand new devlpt, will be received when it opens, & how that will compare with current response to metro417.

[citywatch]

I'll archive this article here, since it's a good reminder of how volatile the housing mkt can be, here or anywhere.

The big question over the next few yrs will be what is the capacity of the hoods in DT LA when it comes to housing? What will do better: more rentals or more owner occupied?

I've also included a segment of an article about a major highrise proposed for Chicago that's gotten a lot of publicity over the past few days. It indicates that city finally may be reaching a saturation point.


DT News, August 1, 2005

Cashing in on the Condo Craze

Three Downtown Developers Plan to Convert Nearly 700 Apartments Into For-Sale Residences

by Kathryn Maese

In a heated Downtown housing market where condominiums fetch upwards of $500 a square foot, developers of three big apartment projects plan to turn their existing buildings into for-sale units. In total, nearly 700 Downtown rentable units will be lost. Just a few blocks apart, the under-construction 303-unit Alexan Savoy and the 161-unit Little Tokyo Lofts, which opened in 2003, will be converted. On Bunker Hill the 217-unit Museum Tower Apartments, which debuted 13 years ago, is following suit.

Many builders see the lucrative condo conversion trend as the last chance to cash in before interest rates rise and housing prices begin to flatten. In most cases, hungry condo converters are buying the projects, though a few of the current apartment developers are choosing to make the switch themselves. "This condo market, as well as the housing market everywhere in the U.S., is wild," said Alex Wong, managing director for Trammell Crow Residential, which is developing the Alexan Savoy. "It doesn't seem sustainable, but in the meantime, values have gone up $100 a square foot for condos in the last year. It makes more sense for the Savoy to be sold rather than rented."

Wong, whose firm is developing two additional condo phases next to the $65 million Alexan Savoy on the southeast corner of First and Alameda streets, said the units will average 900 square feet - compared to 1,200 square feet for its adjacent condos. The project is still under construction and won't be finished until December, by which point a decision will be made on redeveloping the site into condos or selling it to a converter, Wong said.

Developers Michael Tansey and Jon Petersen, who in 1982 developed the first live-work lofts Downtown, are jumping on the bandwagon as well. After two years leasing to tenants, the $21 million Little Tokyo Lofts at 420 S. San Pedro St. was sold last week for an undisclosed amount to San Diego-based condo converter Hammer Ventures. Jon Hammer, the firm's president, said he was attracted to the quality of the project and the "strong marketplace," which he expects to continue. "There are very few buildings in Southern California that are true loft products," he said. "This is representative of what you'd see in Chicago and New York."

The building was originally constructed according to condo specs, meaning more attention was paid to sound attenuation, street setbacks and high-end amenities such as hardwood floors, marble and granite countertops, parking, and a pool and Jacuzzi. Units range from 625 square feet to 1,750 square feet, and rents were $1,195 to $3,200 a month. It is 97% occupied, and residents will have the opportunity to purchase their lofts. "We built the units with the idea of being able to sell it," Tansey said. "I had no idea how prices would escalate. Condo converters are able to pay a substantial premium over a capped rate."

The Museum Tower Apartments at 225 S. Olive St., next to the Omni Hotel and the Museum of Contemporary Art, will be converted once leases expire, which likely won't occur until at least the first quarter of 2006. The 20-story building has 217 units that are nearly fully leased. Incoming and current tenants without leases are renting on a month-to-month basis. When it was built in 1992, the developers planned to open for-sale units, but changed course because of a weak condo market. Its location makes it a prime selling point for would-be homeowners, with plans for a $1.8 billion entertainment and residential promenade along Grand Avenue set to unfold over the next five years. Officials from Goldrich and Kest Industries, which owns the property, could not be reached for comment by press time.

Trend Picks Up Speed

The practice of selling off existing apartments for condo conversion is a new trend in Downtown Los Angeles. The Alexan Savoy, Museum Tower and Little Tokyo Lofts are among the first in what could soon be a frenzy of sell offs, especially as mortgage rates - which remain under 6% - are expected to creep up later this year.

The 135-unit Higgins Building at Second and Main streets was the first of the new wave; it changed last year. But the conversion was less than smooth. Many tenants were angered after receiving letters asking them to vacate their homes within 60 days. The building, developed by Barry Shy, had been open only a year. After a bitter dispute, many tenants decided to move out, while others sought legal advice. Shy went on to develop two more residential projects.

Builders and speculators across the nation are rapidly converting apartments to condominiums as land for development becomes more scarce and pricey. Downtown developer Mark Weinstein said most converters are willing to pay a premium for properties, up to two-thirds the price they can get for each unit. If a condo will fetch $300,000, they could pay as much as $200,000 to acquire it - an enticing incentive for apartment building owners to exit quickly. The process works for condo converters because that is still less than what they would have to shell out to assemble property and build from the ground up. According to industry experts, it is relatively quick and cheap to make the change by upgrading exteriors and common spaces, and adding more expensive finishes to units. The upgrades are built into the sales price. Usually, about 10% to 15% of current renters decide to buy their units, often at a discount to what outside buyers will pay.

While Wong and others say they are eager to capitalize on the current boom, they caution that a slowdown will likely hit in the next three to four years. With a short supply of rental units, apartments could give condo projects a run for their money. "My best guess is that the condo market will not crash but we'll have some kind of adjustment next year," Wong said. "I think we're near the end of that window. As interest rates go up, the apartment market will become competitive to condos, which means developers are starting to look for apartment deals now."

Ironically, Wong said by the time Trammell Crow completes its Artisan condo project in the next two years, there's a chance that the rental market will be so strong they will turn those for-sale units into apartments. Tansey agreed, and said a dwindling number of rental units will result in premium apartment rents. "Eventually that will bring into balance the economic viability of building apartments," he said. "It's always a seesaw, and right now the trend is for condo development. There are cheap interest rates for buyers but if rates go up it's going to exclude a greater segment of the market and they will be forced to rent."

====================


In a national market where project financing for condo development has been easy, and in a local market – Chicago's – where it has been child's play, bringing Chicago into third place in Condo Nation after Miami and San Diego in condo construction and conversion (according to Property & Portfolio Research), the arrival of Fordham Spire was inevitable. Unless it's a pyramid scheme---and this slender, twisting triangle is a physical expression of such.

In June, the developer narrowly escaped foreclosure of his recently completed 50-story condo tower with a $53 million refinancing from Corus bank. Carley needed to refinance because of slow sales, something that Chicago developers are feeling all over town in this condo-besotted city.

The spectacular nature of the Calatrava proposal will naturally draw attention away from Carley's other problems, including a suit by disgruntled purchasers of units in another Carley building. And once financing and fees are in place to build Fordham Spire, concerns on other projects can be resolved – until the next time.

[LongBeachUrbanist]

The big question over the next few yrs will be what is the capacity of the hoods in DT LA when it comes to housing? What will do better: more rentals or more owner occupied?

In the end you need a balance. Too much emphasis on condos will result in a speculative boom and eventually bursting bubble. A healthy city will have a diversified portfolio, including various types of residential and commercial properties.

[bobcat]

I'm glad you posted that article snippet, Citywatch. I didn't know things had gotten so far out of hand in Chicago, too. You wouldn't know from reading these boards with everyone going ga ga over the building's height. Looks unlikely that tower will ever get built.

Overall, LA's housing market is definitely overheated, but hopefully DT LA can still absorb a good amount of housing over the next few years as the area's jobs/housing ratio is still so out of balance.

[colemonkee]

^And our "boom" pales in comparison to Chicago's. We have less than ten 20-40 story towers proposed and only 1 19-story one under construction. Chicago has several 40-story towers under construction and several 50+ towers propsosed or ready to undergo construction. I think with the cost of the risk (land + construction), developers here are much more cautious and deliberate when starting construction.

[RAlossi]

most likely because LA is sprawling... so instead of 40-story towers concentrated in one area, we have 10-story buildings, 17-story buildings, and yes, even many many 4-story buildings being constructed over a wide area... i wonder how many units total are being built in Chicago, LA, New York City, and San Diego....

[DJM19]

I think developers are still just very cautious about how well a 40 story tower will do in downtown. Give it time and they will start making them. Even if most of the parking lots get built up, there are plenty of crappy one and two story buildings to demolish.

[Wright Concept]

The big question over the next few yrs will be what is the capacity of the hoods in DT LA when it comes to housing? What will do better: more rentals or more owner occupied?

In the end you need a balance. Too much emphasis on condos will result in a speculative boom and eventually bursting bubble. A healthy city will have a diversified portfolio, including various types of residential and commercial properties.

I was in school in Chicago, during this building boom and I knew it was going to bust by the time I graduated because everyone was doing the same thing at the same location at the same time. In the end all you have is a skyline of ugly residential high-rises that are empty and have no life to them.

[edluva]

LA's boom, given what's also happening in CC, Hollywood, Wilshire, etc. is adding many more units than Chicago's when taken as a whole. It's just that they don't translate to dozens of high rises in a single place.

[LA rehab]

A little overbuilding can be a good thing every now and then. When real estate prices crash due to a glut on the market, it allows people who otherwise couldn't afford to buy the opportunity to do so. Back in the mid to late 90s, teachers, nurses, cops, bank tellers, immigrants and the like were buying houses in droves. I remember one of my subcontractors, a Latino immigrant was buying up houses right and left with every spare nickel he could manage to save. The guy was working his arse off doing handyman jobs to earn enough for subsequent down payments. He should have easily cleared a seven-figure net worth by now. Even some of my grad student colleagues managed to scrounge up the 5 grand for a down payment on a condo. The preponderance of investors buying condos in highrises by refi'ing and cashing out on their first ones could end up being a big opportunity for the "little guy" should we ever see a "correction".

[citywatch]

I wish LAB or someone else who keeps a close eye on DT (colemonkee?) can keep us up to date over the next several months on how apts or condos are leasing or selling.

I notice the Palmer apt bldg on 7th, the Medici, currently has the lowest vacancy rate I've ever seen it with since opening a few yrs ago. Unfortunately, other apt bldgs in DT don't provide constantly updated figures on their web sites, so more guesswork or searching is required to find out about places like the Gas Co or Pegasus. The big question now is how ppl are responding to the newest additions to the hood, the Pacific Electric & Subway Terminal bldgs. And I assume reports over the past few months about early response to condo projs like the Elleven being very good still holds true today.

[yeah215]

This article makes me very excited. Just passing it along.

------------------------

Downtown Sells Out

Condo buyers scooping up pre-sale conversion units at high prices

By ANDY FIXMER
Los Angeles Business Journal Staff
There may be a speculative bubble headed downtown L.A.’s way, but the buyers at three condominium projects still under construction don’t appear to be paying attention.

As developers of the new properties recently began pre-selling units, there was so much interest that asking prices rose as the number of available units dwindled.

ForestCityWest, a division of Forest City Enterprises Inc., sold 106 of the 228 residential units at 1100 Wilshire Blvd., a 38-story high-rise office conversion west of the Pasadena (110) Freeway. The average unit sold for $625 a square foot, which means a 1,000-square-foot unit would run $625,000.

(ForestCityWest will sell the units as the floors are completed.)

At the nearby Eastern Columbia building at Ninth Street and Broadway, Kor Group Inc. sold out the 80 units it released for prices averaging $535 a foot.
And Lee Group Inc. nearly sold out nearly all that remained of the 66 units in its Grand Avenue Lofts building, where condos sold for prices ranging from $400 to $600 a foot.

ForestCityWest and Kor Group hired the Ryness Co. to run their auction-like sales. Buyers were placed in groups of about 20 to select their units, with each group prioritized based on when they received pre-approvals.

“After each group, we would reassess pricing on what we have left,” said Sheridan Mantor, urban sales manager for Ryness. “We would adjust the remaining units upward, bring next group in and go from there.”

Kor Group has withheld selling a number of units in the Eastern Columbia building until after the project is completed – presumably in anticipation of higher asking prices. Meanwhile, ForestCityWest intends to have a second, and possibly a third, round of sales.

The appetite for units has emboldened developers. Lee Group plans to begin offering reservations for 132 condos it’s carving on the top 11 floors of 801 S. Grand Ave.

The South Group, a partnership of Portland developers Williams & Dame and Gerding/Edlen, is expected to begin offering reservations for 230 units in their Luma condo tower sometime in mid-September. The firm already has reservations for nearly all of the 176 units in its first condo tower, Elleven.

[LA21st]

The big question over the next few yrs will be what is the capacity of the hoods in DT LA when it comes to housing? What will do better: more rentals or more owner occupied?

In the end you need a balance. Too much emphasis on condos will result in a speculative boom and eventually bursting bubble. A healthy city will have a diversified portfolio, including various types of residential and commercial properties.

I was in school in Chicago, during this building boom and I knew it was going to bust by the time I graduated because everyone was doing the same thing at the same location at the same time. In the end all you have is a skyline of ugly residential high-rises that are empty and have no life to them.

I live in downtown Chicago. There was no bust, and doesnt appear to come anytime soon. Coastal cities will bust before Chicago. Empty buildings? Have no life to them? Care to explain what exactly you are saying here? As far as someone who lives here, that makes absolutely no sense.
Condos are selling like hotcakes and there seems to be no end in sight.

[bobcat]

^According to a number of recent news articles, it does seem like Chicago's condo market is losing steam. Nothing has happened that would qualify as a "bust," but real estate watchers around the country will be watching to see what happens in Chicago in the coming year.

http://homes.wsj.com/propertyreport/residential/20050624-smith.html

[colemonkee]

Real estate watchers will be watching every city in the coming year. This condo boom is going on around the country. Look at San Diego, Chicago, Portland, Dallas, Sacramento, LA, NY, and the most extreme case, Miami. All these cities are booming (relative to their respective histories) with condo development. As long as sales continue to be strong, and a majority of buyers are not speculators, this "bubble" may just be figment of a collective paranoid imagination. If the majority ARE speculators (which it does not seem like at least in LA from what I've experienced) then we are in trouble.

[citywatch]

^According to a number of recent news articles, it does seem like Chicago's condo market is losing steam.
That article you've linked to is so important and contains so many interesting stats that I want to archive it here in its entirety.

The major question is how much of what's starting to show up there will spread to other cities in the US?

The bigger question is even though DT LA has far less condo/apt devlpt underway than in cities like Chicago, Miami or SD, is that offset by the fact that the degree of demand for housing in DT always will be much smaller than in hoods that are the opposite extreme of DT LA, such as Manhattan in NYC, where there's often been almost too much demand for $$$ housing?

IOW, if Chicago's bubble bursts after the limit of, say, 30,000 units of new housing has been reached, will DT LA's bubble burst after only, say, 3,000 new condos/apts have been added?


Chicago's Condo Market Shows Signs of Cooling

By RAY SMITH
Staff Reporter of The Wall Street Journal

The air appears to be seeping out of Chicago's bubbly condo market. In recent months, several luxury condominium projects have suffered slower-than-expected sales. A handful of high-profile projects narrowly averted foreclosure as banks came to the rescue with new loans.

While condo developer defaults and cash crunches are by no means widespread in the Windy City, some developers are either selling units for less than planned or not at all. Meanwhile, construction of condos and conversions of rental apartments into condos have gone on unabated, giving buyers a lot more options, including the option of saying no.

"We're seeing in the last couple of months the sound of the bubble breaking in the Chicago central business district," says Hans Nordby, who monitors real-estate markets and trends for Boston research firm Property & Portfolio Research Inc. "Projects are starting not to sell, they're starting to go to the bank. The bubble is starting to break."

Unlike some other markets, Chicago isn't experiencing a pricing bubble but a supply bubble. Chicago ranks third in the nation in terms of condos that are expected to be completed this year, including new buildings and conversions of rental apartments. According to Property & Portfolio Research Inc. and Reed Construction Data, 18,586 condo units will be added to Miami's condo inventory this year. San Diego is expecting 10,875. Chicago could see 8,533 more units.

But Chicago so far ranks first in terms of troubled condo projects as high prices and healthy supply have made some buyers more cautious. The median price for a downtown condo is up 34% in the past five years to $349,000, according to Appraisal Research Counselors.

This month, luxury-condo developer Christopher Carley was extended a nearly $53 million loan by Corus Bank of Chicago to refinance a 50-story condo tower that opened this year and whose units were selling slowly. Some real-estate observers said Mr. Carley wanted to refinance in order to buy more time with Corus and another lender that provided the construction loan. In an interview yesterday, Mr. Carley said he wanted to refinance to get a lower interest rate and thus decrease his financing costs. He said condo sales at the tower have accelerated.

In December, a development group behind Skybridge, a condominium project in the West Loop designed by Chicago architect Ralph Johnson of Perkins & Will, avoided foreclosure by securing new financing after the development's original construction loans came due. The two-year-old condo project is more than 20% unsold.

The signs are literally out there. "If you drive around Chicago, you see big signs on the tops of buildings -- 'Condos for Sale' -- which I've never seen before," says Paul Barile, an investment specialist with real-estate services firm Grubb & Ellis Co., whose Chicago office is down the street from a condo building that was taken over by Lehman Brothers Holdings Inc., which had been the mezzanine lender on the project. "If they have to put a big sign out, they're not getting the traffic they have to get."

Lenders step in when sales don't go as well as planned or promised. "If they're not able to qualify for [additional long-term financing] when the project is completed, the bank could call the [construction] loan and demand payment," says Patrick Dzuris, vice president with Citibank Commercial Banking Group.

Mr. Nordby warns that Chicago may be a harbinger of things to come in other markets. In Miami, "we haven't seen too many bad deals," Mr. Nordby says, but the amount of speculators, or investors buying units to flip or sell quickly, concerns him. "The story is Chicago this week, but Miami is not far behind," he says.

-- June 24, 2005

[citywatch]

“After each group, we would reassess pricing on what we have left,” said Sheridan Mantor, urban sales manager for Ryness. “We would adjust the remaining units upward, bring next group in and go from there.”

That is amazing. :tup: :pepper:

However, I hope it's not like a good news and bad news type of situation, where someone says, first the good news: condos are selling like hot cakes!

Now the bad news: the demand is fueled by so much speculation and by so many buyers playing games of musical chairs, that the hood will have a really lousy hangover when the market peaks in X number of yrs, & may not regain its footing again until everyone is old & gray.

Therefore, I hope devlprs don't become too greedy & buyers don't become too caught up in a match of one upmanship.

[deehrler]

Downtown Sells Out

Condo buyers scooping up pre-sale conversion units at high prices

By ANDY FIXMER
Los Angeles Business Journal Staff

There may be a speculative bubble headed downtown L.A.’s way, but the buyers at three condominium projects still under construction don’t appear to be paying attention.

As developers of the new properties recently began pre-selling units, there was so much interest that asking prices rose as the number of available units dwindled.

ForestCityWest, a division of Forest City Enterprises Inc., sold 106 of the 228 residential units at 1100 Wilshire Blvd., a 38-story high-rise office conversion west of the Pasadena (110) Freeway. The average unit sold for $625 a square foot, which means a 1,000-square-foot unit would run $625,000.

(ForestCityWest will sell the units as the floors are completed.)

At the nearby Eastern Columbia building at Ninth Street and Broadway, Kor Group Inc. sold out the 80 units it released for prices averaging $535 a foot.
And Lee Group Inc. nearly sold out nearly all that remained of the 66 units in its Grand Avenue Lofts building, where condos sold for prices ranging from $400 to $600 a foot.

ForestCityWest and Kor Group hired the Ryness Co. to run their auction-like sales. Buyers were placed in groups of about 20 to select their units, with each group prioritized based on when they received pre-approvals.

“After each group, we would reassess pricing on what we have left,” said Sheridan Mantor, urban sales manager for Ryness. “We would adjust the remaining units upward, bring next group in and go from there.”

Kor Group has withheld selling a number of units in the Eastern Columbia building until after the project is completed – presumably in anticipation of higher asking prices. Meanwhile, ForestCityWest intends to have a second, and possibly a third, round of sales.

The appetite for units has emboldened developers. Lee Group plans to begin offering reservations for 132 condos it’s carving on the top 11 floors of 801 S. Grand Ave.

The South Group, a partnership of Portland developers Williams & Dame and Gerding/Edlen, is expected to begin offering reservations for 230 units in their Luma condo tower sometime in mid-September. The firm already has reservations for nearly all of the 176 units in its first condo tower, Elleven.

*This story is from the August 8 issue of the Los Angeles Business Journal.

http://labusinessjournal.com/enews_article.asp?aID=89715323.2533528.1178788.1785823.2783211.790&aID2=90667

[yeah215]

Does anybody have an stats on how many of the purchases are speculators or investors. A lot of times, and I don't know if this is the case for these projects in DTLA, developers put in safeguards to make sure that there is a proper mix of investors and residents. Sometimes they restrict the entire development so investors can't purchase at all.

[bobcat]

IOW, if Chicago's bubble bursts after the limit of, say, 30,000 units of new housing has been reached, will DT LA's bubble burst after only, say, 3,000 new condos/apts have been added?



I think the key is to look at the jobs to housing ratio. Until recently in DTLA that figure was so out of whack because nobody was building any type of housing at all, so it's hard to imagine the area will be overbuilt for a number of years. IMO, the area which mostly closely mirrors DTLA is DT San Diego, so if you want to see what amount of housing and retail DTLA can support, I think it's best to look down there first.

[bobcat]

Does anybody have an stats on how many of the purchases are speculators or investors. A lot of times, and I don't know if this is the case for these projects in DTLA, developers put in safeguards to make sure that there is a proper mix of investors and residents. Sometimes they restrict the entire development so investors can't purchase at all.

The scary thing is nobody knows. I've seen some news articles saying that some luxury condo towers in Miami are close to 100% investors. YIKES!

[citywatch]

I've seen some news articles saying that some luxury condo towers in Miami are close to 100% investors. YIKES!
I posted some article about that city here several wks ago. I think it was from the NY Times. I know if DT LA were like Miami, I'd be damn nervous right now about the next 2 to 3 yrs, if not less.

It's odd how not that long ago condo or apt projs in DT LA weren't even considered, much less actually built, because many investors were skeptical about the hood or didn't think the rate of return would be high enough.

I know when GH Palmer built his large apt proj on 7th St a few yrs ago, lots of devlprs thought he was crazy & would end up taking a bath. And Tom Gilmore was seen by even more ppl in the financial community as a bigger daredevil. That's why when I read about what's going on in Chicago or Miami, I have to shake my head because it seems like the investment community in those cities has been the opposite extreme of investors in LA &, in marked contrast, have been too easygoing & way too willing to put up $$$.

[DaveofCali]

^ THAT is why I usually don't favor luxury housing being built. People buying properties just to play the great pyramid scheme (and dominance by the speculative market is most dangerous and as with the dot com crash and what happened to the L.A. office market in the early 90's, signals a bubble burst). And how many of them actually live in the place they bought? I'm talking about people who buy multiple properties, especially on speculation.

[deehrler]

Any comparisons of Downtown LA and Miami must consider the following:

1. The biggest market for Florida condos has always been for wealthy snowbird's 2nd homes. The idea was to invest in a condo, live in it part time and rent it out the rest of the time. Normally a management company was set up to expedite this process. This hardly applies to Downtown LA.

2. Now since demographics are changing with the baby boomers retiring, these units are filling up rapidly with full time residents. This does not apply to Downtown LA.

3. Miami has always been a sanctuary for wealthy Latinos who purchased property to have a stakehold in America. Again, absentee owners. This may apply to DTN-LA provided "Asian" is substituted for "Latino".

For the most part Downtown residential property is filling up with mostly working people who can't afford Venice or Santa Monica. Many come from other big cities. They know how to handle the grit and even relish in it. They visualize a transformation that only a few natives grasp. They are young and a vast majority are visionaries.

A big part of those buying property in Florida are middle-aged and looking for a place to relax and play shuffleboard.

[POLA]

Strip Mall Grows Up, Literally

by Chris Coates
A first-time residential developer with ties to the Grand Olympic
Auditorium plans to build market-rate condominiums above a strip
mall south of the Fashion District. The conversion is part of a
trend by building owners to turn existing properties into more
profitable, residential developments.

Dennis Needleman plans to construct five levels of condominiums
above an existing row of single-story, side-by-side stores he owns
at East Washington Boulevard and South Maple Street. Needleman said
the $50 million development, called City Front Place, would rise on
a steel-reinforced portion of the strip mall that was engineered for
high-rise expansion.

Plans by Yung Kao of Alhambra-based Architech Group call for 135 one- , two- and three-bedroom units ranging from 880 to 1,800 square
feet. The condominiums will sell for $400,000 to $800,000, said
Needleman, who in the 1980s helped refurbish the aged Grand Olympic
Auditorium.

The development will be funded privately and does not include an
affordable housing element, Needleman said. He added that he expects
to secure permits later this year and start construction in 2006,
with an opening the following year.

Each unit in the 200,000-square-foot City Front Place will have a
patio with a Central City or courtyard view. The building will also
feature a swimming pool, barbeque area, fitness center and koi pond,
he said.

Plans also call for an eight-level parking structure with 638
residential and commercial spots. That facility would have two
rooftop tennis courts.

Needleman said he is looking to attract residents who work in
Downtown Los Angeles. City Front Place is about halfway between two
Blue Line stops, and Needleman said a bicycle would come with each
unit to encourage residents to ride to work. "We're not going for
the artist-type customer," Needleman said. "We're going for the
young working professionals Downtown who are fed up with the
terrible commute."

The unusual conversion is possible because portions of the strip
mall (known as Washington Plaza) date to the 1920s. Needleman, son
of the late Fashion District real estate pioneer Jack Needleman,
built the retail center around a 1926 truck dealership he purchased
in 1984. Needleman said the owners of the 130,000-square-foot
dealership had intended to tack on additional stories to the
building, and reinforced it accordingly.

Needleman, though, converted and expanded the structure into
separate stores, creating a seamless row of retail that today
includes a dentist office and dollar store.


'This Is Unique'

While the strip mall is profitable (it's one of only a few in the
area), Needleman said he got the idea last year to develop condos
atop the building. It marks his first residential project.

"We determined we could in fact add on top of the building without
major disruption to the tenants below," said Needleman, whose
brother, Steve, refurbished the Orpheum Theatre in 2001 and later
added the Orpheum Lofts. "This is unique."

It is also unique because City Front Place is one of the few non- student, residential development projects in the area just south of
the 10 Freeway. The neighborhood - a collection of warehouses, fast
food restaurants and small homes a few blocks from the bustle of the
Fashion District - has been mostly spared from the onslaught of
residential development in the heart of Downtown. Instead, most of
the recent area projects have been either commercial, student
housing or academic.

The project will sit immediately east of the newly completed South
Los Angeles Area New High School No. 1, set to open later this
month. It is also near the 29-acre Los Angeles Trade-Technical
College campus at Washington Street and Grand Avenue, which is
receiving a $240 million upgrade. That project, slated for
completion in 2008, also ties into plans to renovate an existing
Blue Line station nearby.

Other area projects include Tuscany, a mixed-use development for 512
USC students at 3760 S. Figueroa St., and several major construction
projects on USC's University Park Campus, including a $70 million
arena at Figueroa Street and Jefferson Boulevard.

Auto dealer Shammas Group, meanwhile, is spending $16.5 million to
build a three-dealership auto center at Figueroa Street and
Washington Boulevard. Further south, another Shammas lot is being
razed and will be replaced by a $130 million mixed-use residential
center for USC undergrads called University Gateway.

Shammas CEO Darryl Holter said City Front Place demonstrates a
strengthening housing market in the portions of Downtown south of
the 10 Freeway, with projects spurred by the renovations to LA Trade
Tech and development along Figueroa Street. "[With] all the
development on Figueroa and Flower, the cross-streets become nodes,"
he said. "That development moves down the street, in this case east
towards Maple."

Needleman takes the point further. "I'm really the first development
south of the Santa Monica Freeway," he said. "I'm sort of the guy
jumping the track."

[urban_encounter]

I live in downtown Chicago. There was no bust, and doesnt appear to come anytime soon. Coastal cities will bust before Chicago. Empty buildings? Have no life to them? Care to explain what exactly you are saying here? As far as someone who lives here, that makes absolutely no sense.
Condos are selling like hotcakes and there seems to be no end in sight.



Yeah, there are (more) residential high-rises going up all over Chicago than you can keep track of. I'm not sure what "bust" or "empty buildings" he's referring to.

[sbocguy]

Just thought this thread was the most logical place to reproduce this article... as with other pieces on the DT revival, it's pretty much stuff we were already aware of, but it's significant that the Times is printing an overview as extensive and well-written as this, and displaying it so prominently (front page of their website; likely front page of the paper in the morning). My first instinct is to say that Waldie (quoted about 1/3 of the way down) makes an ass of himself, but the need for better infrastucture, parks, etc. is, IMO, a totally legit concern (except for wider streets, of course, which is an asinine statement given the *urban*, *ped-friendly* environment that is the goal for DT and for which many of the larger streets are actually *too* wide as it is)... all in all, good to see this type of exposure in LA's biggest paper, blah blah blah, hopefully it gets more people thinking and talking about DT, blah blah blah...

http://www.latimes.com/news/local/la-me-highrise8aug08,0,4240525,full.story?coll=la-home-headlines

Los Angeles Times 8 August 2005

It's No Tall Tale: Skyscrapers Make a Comeback Downtown
By Cara Mia DiMassa
Times Staff Writer

August 8, 2005

Downtown Los Angeles — which hasn't seen a skyscraper built since Tom Bradley was mayor and the Raiders were playing at the Coliseum — is in the midst of a growth spurt that promises to significantly alter its skyline in the coming years.

The building boom marks the fourth time since World War II that a spate of construction has altered the downtown landscape. But although previous booms focused on commercial space, this one is different: The vast majority of the new high-rise space is for housing.

The phenomenon mirrors patterns in Chicago, Las Vegas, San Diego and Miami, where residential towers are going up at a rapid clip. Architect Santiago Calatrava recently announced plans to construct the nation's tallest building, a 2,000-foot residential and hotel tower called the Fordham Spire, in Chicago.

From 1986 to 1992, almost two-thirds of towers 20 stories or more built in the U.S. were for office use, according to McGraw-Hill Construction, which tracks projects nationwide. But recently, said McGraw-Hill economist Jennifer Coskren, "this has really flipped."

Between 2003 and June 2005, about 84% of new towers were for residential, multifamily use — an indication, said Coskren, of "this investor and consumer appetite for multifamily condo development. Luxury high-rises are what's being demanded."

The return to tall towers will be a marked change for downtown Los Angeles, whose last new skyscraper was the 750-foot, 52-story Two California Plaza, completed in 1992.

At the south end of downtown, two residential towers already under construction near Staples Center will be joined by a 55-story hotel and condominium complex scheduled to break ground later this year.

To the north, near Walt Disney Concert Hall, at least five skyscrapers are slated for construction as part of the Grand Avenue project, including a 40- to 50-story building to be designed by architect Frank Gehry and scheduled for completion in 2009.

The changing skyline should begin to take shape in the next three years, when the first five buildings that have already won city approval are completed. They include a 33-story loft building at 9th and Flower streets.

In all, 32 towers are on the horizon for downtown, though some still need city approval as well as financing.

Twenty are considered skyscrapers because they climb more than 240 feet, or about 20 stories. One of the most talked about is a proposed 50-story Asian-inspired tower at 3rd and Hill streets.

Together, said author and historian D.J. Waldie, they represent "an enormous transformation of the city we know to something unknown."

Most of the new residential spaces that have opened so far have been quickly swept up by buyers and renters.

But there are lingering concerns that the downtown residential market could suffer the same fate as office space did in the early 1990s, when far more new buildings went up than were needed. Rents plummeted, buildings sat vacant — and it took a decade for downtown to recover.

Some also question whether downtown's sometimes narrow streets and limited infrastructure — everything from its lack of parks to its aging sewer system — can accommodate all the new towers and residents who will follow.

Waldie says he thinks city planners are "failing to connect the dots."

"They're allowing a neighborhood texture to arrive where one had been lost for 50 years," said the author of "Where We Are Now: Notes From Los Angeles." "They're putting in even taller high-rises ... but down on the ground, where are the resources to make that into a place to live?"

The new construction could also push out the underclass that has long called downtown home.

Orlando Ward of the Midnight Mission said he was optimistic that the influx of residents would ultimately help the area, but he thinks it could be a rough transition.

He's particularly worried that new residents expecting an urban wonderland will instead find social problems like homelessness and crime.

"There are certain streets you can't go down or won't go down," Ward said. "That's bound to cause resentment or potential backlash.... We're most concerned that there isn't a knee-jerk reaction by policymakers to Band-Aid or push the problem out of sight of our affluent neighbors."



Downtown Los Angeles has seen several distinct flurries of tower development since City Hall, at 28 stories, became the city's first high-rise in 1927. It wasn't until the late 1960s and early 1970s, however, that the city began to have true skyscrapers, such as the 68-story building now called the Aon Center, completed in 1974.

During the last major construction boom downtown, from 1988 to 1992, investors poured billions of dollars into the area. Eight million square feet of office space was added —enough to fill Century City.

The city's tallest building, the 1,018-foot structure now called the US Bank Tower, was finished in 1990.

But demand for office space dwindled, and companies that had long had a foothold in downtown, including Security Pacific and Bank of America, fell victim to corporate restructuring. Commercial real estate prices dropped nationwide. And even as new buildings went up, downtown property values plunged. Buildings sat vacant. Landlords lost money on their rents.

When the commercial real estate market began to recover in the mid-1990s, tall buildings sprang up in other parts of the city, especially Century City and other Westside areas. But downtown building activity remained dormant — until now. The recent rebound is due in large part to a renewed interest in downtown living that comes amid a hot housing market.

While vacancies for office space downtown remain at 15.9%, higher than the national average, there are waiting lists for many downtown lofts and condos.

The area's population has risen from an estimated 18,652 residents in 1998 to about 24,600 today, according to estimates from the Los Angeles Downtown Business Improvement District. And based on developments in the pipeline or under construction, that number could double in the next decade.

Engineering and seismic considerations often make building skyscrapers a financial gamble, said Bill Witte, president of Related Cos. of California, which is developing 25 acres downtown — including a number of skyscrapers — on behalf of the city and county as part of the Grand Avenue project, as well as two 15-story structures in Little Tokyo.

Buildings more than 240 feet high require different seismic reinforcements, Witte said, and cost dramatically more.

"Even we had to think long and hard about whether to do something at that height," he said. "You have to believe that you can sell or rent for enough to justify that cost."

But as housing prices continue to climb, and buyers swoop up high-rise living spaces like those being created in former downtown office towers, building bigger and taller structures has become less of a financial risk for developers and the financial institutions that back them.

"The most vigorous market for new buildings is residential," said Carol Willis, founder and director of the Skyscraper Museum in New York City. "And that's just because the prices are phenomenally high. It's more profitable, and it reverses the historical trend" that most tall structures should be office buildings, she said.



While 32 buildings between 11 and 55 stories have been proposed downtown, experts question the viability of some of the grander designs.

Still, city officials and developers expect at least half to be completed by the end of the decade, barring a major shift in the economy.

Even in 2010, the 73-story US Bank Tower, formerly known as the Library Tower, would remain the skyline's pinnacle. But gone would be the gap that now exists between the Transamerica building to the south and the stretch of tall towers beginning north of 9th Street.

That area, called South Park and near Staples Center, is the hub of most of the initial construction, where cranes and crews are already turning former parking lots into high-rises.

This district has far more open space than other parts of downtown, so residents and city planners expect it to be more dramatically transformed.

It is also where many amenities for downtown residents will open in coming years, including a Ralphs supermarket — set to open late next year — and movie theaters.

To the north, downtown will see the completion of Bunker Hill's decades-long transformation from a slightly seedy residential quarter into a zone full of high-rises.

Because almost all of the new construction will be residential rather than commercial, the look of the towers will be different from the rest of the skyline.

Expect thinner more angular structures.

Office buildings, said urban planner Doug Suisman, who consulted on the Grand Avenue project, often look like boxy slabs, in part because of the nature of what happens inside. While residential towers require significantly more plumbing, for example, and higher ceilings than office space, they also need less ventilation and fewer elevators.

In places like Vancouver, Canada, where high-rise residential towers have proliferated in recent years, buildings are "less bulky and more pleasing.... They tend to read more as true towers rather than walls," said Suisman, whose firm, Suisman Urban Design, is based in Santa Monica.

In addition, he said, the buildings are staggered in their placement along the street so not all of them hug the sidewalks. This allows views — or slivers of views — from other points in the downtown to be preserved.

"That valuable commodity, the view, is distributed and fairly shared.... You see this pretty clearly when you are there," he said.

It's unclear whether some precious views, often a selling point for pricey condos, will be preserved as downtown's new towers spring to life.

With the wall of downtown buildings being extended north and south, it seems certain, however, that the new projects will further obscure City Hall and shorter landmarks like Disney Hall.

Councilman Tom LaBonge, long a fan of City Hall's iconic placement in the landscape, said he felt that the building "will always stand tall."

But, he admitted, "it has already been dwarfed."

"I don't mind," he said, "as long as the postcards show the city from the east to the west, and show off that great big beacon."

[sbocguy]

Here are some bonus photos they just added... don't believe we've seen the model of the LA Live hotel before...

GOING UP: A model depicts a 55-story hotel and condo project, one of 32 planned towers of at least 11 stories.
http://www.latimes.com/media/photo/2005-08/18865397.jpg

ROOM FOR A VIEW? Many downtown residents were drawn by vistas like this one of Bunker Hill from a fifth-floor window of the Pan American Building. It’s unclear how their views will be affected.
http://www.latimes.com/media/photo/2005-08/18865398.jpg

UNDERWAY: Work progresses on a building at Olive and 11th streets. Two residential towers are under construction in the area.
http://www.latimes.com/media/photo/2005-08/18865399.jpg

[DJM19]

great story and thanks for the pictures

[citywatch]

"They're allowing a neighborhood texture to arrive where one had been lost for 50 years," said the author of "Where We Are Now: Notes From Los Angeles." "They're putting in even taller high-rises ... but down on the ground, where are the resources to make that into a place to live?"
I don't get what he means by "resources"?

If he's referring to the fact that there still will be too many lifeless parking lots in the hood, even after X number of new bldgs are completed, I'd agree with him.


He's particularly worried that new residents expecting an urban wonderland will instead find social problems like homelessness and crime.
I drove through DT on Saturday & there were vagrants even in the better western parts of DT standing out in the street, asking ppl in passing cars for handouts. It's intimidating enough when such ppl are approaching pedestrians on the sidewalks, but when they're also wandering in traffic lanes, that's getting way too hectic.


Buildings more than 240 feet high require different seismic reinforcements, Witte said, and cost dramatically more.

"Even we had to think long and hard about whether to do something at that height," he said. "You have to believe that you can sell or rent for enough to justify that cost."
This should be kept in mind when ppl ask why highrise bldgs for condos & apts, esp in DT, hasn't been very common or easy to finance.

[colemonkee]

For the most part Downtown residential property is filling up with mostly working people who can't afford Venice or Santa Monica. Many come from other big cities. They know how to handle the grit and even relish in it. They visualize a transformation that only a few natives grasp. They are young and a vast majority are visionaries.

This is very true. Most of the people in my building fit this profile to the T.

sbocguy, thanks for the pics of the Convention Center Hotel model. I'm liking it even more. Previous renders have always been kind of vague with huge ads plastered on it, but this gives us a better idea of the massing and the facade. I can't wait until they start building this thing...

[LAMetroGuy]

http://wwwstaging.lacity.org/cratest/Documents/environmental.cfm

[LAMetroGuy]

http://wwwstaging.lacity.org/cratest/Projects/index.cfm


I found this:

http://wwwstaging.lacity.org/cratest/Projects/CBD/images/Metropolis1_1.jpg

Metropolis/City Center Development
Bounded by Eighth, Francisco and Ninth Streets and the Harbor Freeway

This developer-funded project will create more than 2 million square feet of housing, retail, hotel and commercial space in South Park. CRA/LA is currently a participant in an Owner Participation Agreement to help assemble property for this development and a proposed Phase 1, high-density residential development. In FY05, CRA/LA will assist the developer, City Center Development Corporation, with market and project design analyses to create further phased development plans and amend the existing develop­ment agreement and entitlements as needed to reflect the current market conditions.

Amended Central Business District Project Area - Council District 9
Downtown Los Angeles Neighborhood Council

[LAMetroGuy]

http://wwwstaging.lacity.org/cratest/Projects/CBD/images/TheMarket9th&Flower.jpg


South Park Supermarket
The Southern half of the City block bounded by Eighth, Ninth, Flower and Hope Street

The South Park Supermarket, a key component of community-building in the emergence of a downtown residential community, is part of the second phase of a five-phase residential and retail development that includes lofts, apartments, condominiums, a 50,000-square-foot Ralphs market and additional retail space. Construction has begun on this development and is expected to be complete by winter 2006.

Amended Central Business District Project Area - Council District 9
Downtown Los Angeles Neighborhood Council

[DJM19]

Isnt that an old rendering of metropolis? I hope its different now, especially considering the height changes

[LAMetroGuy]

more here:

http://wwwstaging.lacity.org/cratest/Projects/index.cfm

[POLA]

Man, that website has a lot of red tape! My favorite was the Hollywood Plan that required a study of how shadows made by buildings would effect others, and if the shadow lasted longer then three hours to a light sensative area, then they have to either shorten the the height or make a setback.

[LAMetroGuy]

http://wwwstaging.lacity.org/cratest/Projects/index.cfm


I found this:

http://wwwstaging.lacity.org/cratest/Projects/CBD/images/Metropolis1_1.jpg

Metropolis/City Center Development
Bounded by Eighth, Francisco and Ninth Streets and the Harbor Freeway

This developer-funded project will create more than 2 million square feet of housing, retail, hotel and commercial space in South Park. CRA/LA is currently a participant in an Owner Participation Agreement to help assemble property for this development and a proposed Phase 1, high-density residential development. In FY05, CRA/LA will assist the developer, City Center Development Corporation, with market and project design analyses to create further phased development plans and amend the existing develop­ment agreement and entitlements as needed to reflect the current market conditions.

Amended Central Business District Project Area - Council District 9
Downtown Los Angeles Neighborhood Council

Jeeeezzz... this is one ugly project... hopefully the new design will be MUCH better!

[LAMetroGuy]

http://wwwstaging.lacity.org/cratest/Projects/Chinatown/images/Blossom_Plaza_1.jpg

Blossom Plaza
Northeast Corner of Broadway and College Street

In a location that serves the gateway to Chinatown, a site occupied by a vacant restaurant will be replaced with a cultural plaza that will include residential units, retail and restaurant space and public parking. The plaza will also link to the Chi­natown Gold Line Metro Rail Station.

Chinatown Project Area, Council District 1
Historical Cultural Neighborhood Council

[LAMetroGuy]

http://wwwstaging.lacity.org/cratest/Projects/Little_Tokyo/images/JACCC_21st_Century_copy_1.jpg

JACCC Rehabilitation

Portion of Block bounded by Second, Third and San Pedro Streets and Central Avenue



This mixed-use development includes 128 housing units, 20 percent of them designated as affordable, plus 12,500 square feet of retail space. The project creates new housing and shopping opportunities in a cultural marketplace with public art.



Little Tokyo Project Area - Council District 9
Historical Cultural Neighborhood Council

[LAMetroGuy]

http://wwwstaging.lacity.org/cratest/Projects/Bunker_Hill/images/ColburnSchoolPhase2.jpg

Colburn School of Performing Arts
West Corner of Olive and Second Streets

The Colburn School of Performing Arts will expand to a four-year, accredited baccalaureate school for the performing arts. New construction includes 13 floors for classrooms, offices, dormitories, a 200-seat performance lab, cafeteria and parking. The development will be on CRA/LA owned property, which is being leased to the Colburn School through 2082.

Bunkerhill Project Area - Council District 9
Downtown Los Angeles Neighborhood Council

[LongBeachUrbanist]

When will this breakground???

Blossom Plaza
Northeast Corner of Broadway and College Street
...

I've been watching this forever, who knows. The idea was, first the city would build the structure, then the developer would build the rest on top of it. But it's one of those projects I heard plenty about for a long time, then nothing more.

That CRA site is amazing, not just pics but EIRs and other documents. That's where I found out about the Arcade Building parking structure.

[yeah215]

I was looking at these pictures and thinking about other cities. In Washington D.C., all of the shops had their sinage in both english and chineese. It was great, all shops, including Italian resturants and whatnot, have their signs in Chineese. I can only imagine that their is some sort of ordinace that requires that. I think LA should adopt a similar policy. That way all shops in China town would have Chineese signs, all those in Little Tokyo in Japaneese, so on and so forth. That might help in keeping those areas unique.

[ocman]

Got this from Brady Westwater's site. Don't know if this has been posted yet.

http://www.nytimes.com/2005/08/09/business/09road.html?pagewanted=all


On the Road
A Hip Hotel That Insists It's Really Quite Mainstream

By JOE SHARKEY
Published: August 9, 2005
LET me stipulate right away that while I fully appreciate what a great hotel is, and have in fact stayed in a good many luxury brands, my own requirements for a night away from home consist of a bed, electricity, a bathroom with running water and darkness at night.



Chris Gash



Business Travel Minute: Fabulous but Friendly"You're essentially talking about a cave," my wife told me. "You have the same requirements in overnight lodging as Osama Bin Laden."

Well, I probably sleep a lot better than he does, but you get the idea. Fabulously hip boutique hotels with movie people glaring at one another around the pool and models tumbling drunk into elevators at 4 a.m. and employees who dress like the Addams Family are not, as a rule, where you will find the likes of me - though I have been seen attired like Uncle Fester on my days off.

That said, I call your attention to one of the current famous hip boutique hotels, the 18-month-old Gansevoort in the meatpacking district of Manhattan. That's a neighborhood where models and advertising people and celebrities swarm the sidewalks past frozen beef carcasses being hoisted off trucks by workers with biceps the size of legs of lamb.

There are several reasons for drawing attention here to the Gansevoort, a hotel I have visited on several occasions but never stayed in.

First, despite its media-proclaimed fabulousness and its famous rooftop pool, the Gansevoort positions itself unabashedly as a business-travel hotel. Most self-proclaimed hip boutique hotels also cater predominantly to business travelers, but this one isn't coy about saying so.

Next, because it is managed by executives with "classical backgrounds" in button-down old luxury hotels here and abroad, as Tim Cutress, the marketing director, said, the Gansevoort is not snooty and its employees are not noticeably haughty. This was confirmed to me recently by Richard Branson, the chairman of Virgin Atlantic Airlines, who stayed there recently. "They all behave like normal people," he reported.

Finally, delighted with the celebrity status of the brand, the Gansevoort owners are expanding and planting the Gansevoort name directly on new boutique properties. One is under development on the northern edge of South Beach, an established part of the Miami Beach celebrity scene, and the other is being developed in downtown Los Angeles, which hasn't been much of a celebrity scene since shortly after the movies began talking.

"Once people associate a certain quality with your product, you want to remind them of it by using the name," said Michael Achenbaum, a principal in WSA Management, the hotel and real estate development company founded by his father, William Achenbaum. WSA is the owner of the Gansevoort.

In planning a brand expansion, he said: "We talked about whether we should go with, like, the Embassy Hotel, a Gansevoort property. But people know the name. They can actually say it now. Why throw away the brand equity?"

The Gansevoort in South Beach will have 240 rooms plus more than 300 condominium units. The Gansevoort in Los Angeles is being built in a domed 1914 landmark building with an 1,800-seat theater, a block from the Staples Center, and will feature a pool with glass walls visible from the street. Sites in Las Vegas and London are also under consideration, Mr. Achenbaum said.

As I said, I haven't stayed at the New York Gansevoort. On a hotel-booking Web site, Tripadvisor.com, the hotel gets mostly good reviews. "I would recommend it to anyone looking for the complete N.Y.C. experience," one guest wrote. Another, though in the minority, called it "an overpriced tragically hip hotel with mediocre service and product." The Gansevoort had occupancy rates over 90 percent in June and nearly that high in July, Mr. Cutress said. On weekend nights, when the rooftop pool and terraces are major party scenes, the hotel is usually full, he added.

But still, it's primarily a business hotel, he said, adding: "Our primary function is to be a luxury hotel. Yes, we've become hip and trendy. A lot of that is the location and the type of clients with offices in this area - people in entertainment, the fashion industry. But we also get a large number of mainstream business travelers looking for a different kind of hotel experience - banks and accounting firms and publishing companies."

The goal is to keep young mainstream business travelers coming back after the boldface names have gone, he said. People in the glitz world "move very quickly to new products."

"They can be very fickle," he said. "We need to build long-term commitments."

------------------------------------------------------------------------

Picks of the Embassy Hotel below.

http://www.usc.edu/dept/geography/losangeles/lawalk/spark/embassy.html

"The Gansevoort in Los Angeles is being built in a domed 1914 landmark building with an 1,800-seat theater, a block from the Staples Center, and will feature a pool with glass walls visible from the street. "

Pretty cool!

[DJM19]

Im glad the Embassy is getting some glamour back in its life, its a very nice building.

[bobcat]

I believe the description for the JACCC Rehabilitation on the CRA site is a mistake. It is exactly the same as the one for the 2nd and Central project.

[BrighamYen]

http://wwwstaging.lacity.org/cratest/Projects/index.cfm


I found this:

http://wwwstaging.lacity.org/cratest/Projects/CBD/images/Metropolis1_1.jpg


Jeeeezzz... this is one ugly project... hopefully the new design will be MUCH better!


The new chosen architect is Architectonica I believe. They tried to get James Chang, but he wouldn't commit. :(

[KarLarRec1]

Metropolis reminds me of Disney studios in Burbank.

[cookiejarvis]

...or Legoland on steriods

[LAMetroGuy]

Metropolis reminds me of Disney studios in Burbank.


This one:

http://rlux.com/burbank_disneybldg2b.jpg

or this one:

http://asdhollywood.com/DisCoHQ/DisStudios1.jpg

[MapGoulet]

If Metropolis isn't designed by Michael Graves, I'd think someone was ripping him off. The similarity to the Disney headquarters is striking. Check out the circular top of the building on the right.

[SaF9]

^^^that model is pretty hideous.

if that project ever does get off the ground (what is its status btw?) I hope we see that kind of density.

[colemonkee]

Was that original Metropolis design by Michael Graves? It sure is ugly. I'm interested in what Arquitectonica (spelled with a "q") come up with. They've done some very cool work and some very controversial work (see the Westin in Times Square), but it almost always stands out. They do a lot of work in Miami (and recently in Vegas) and they designed the TOD at Wilshire and Vermont.

www.arquitectonica.com (http://www.arquitectonica.com/)

[POLA]

damn, even the colors and the photo grain is bad in that model picture. It actually looks like a still from a claymation gumby episode circa 1960.

[bobcat]

Projects added: Santa Fe Yards, 9th/Flower, Herald Examiner Building Plan

[Easy]

Thanks for updating! Man, South Park is crazy. Not only is it getting the most projects, but they're arguably the best. Also given the current low key atmosphere of the neighborhood, it'll have the most obvious change. I can't wait to see it all happen.

You can probably move Pacific Electric Lofts to recently completed now that it's mostly occupied. I don't think that Mayfair Hotel was too serious about converting to condo's. I'm not sure that they're even considering it anymore.

[bobcat]

You can probably move Pacific Electric Lofts to recently completed now that it's mostly occupied. I don't think that Mayfair Hotel was too serious about converting to condo's. I'm not sure that they're even considering it anymore.

Thanks. I changed the numbers but forgot to change PE Lofts to red. Besides the Mayfair I'm sure there are plenty of other projects that are only half serious, but everything is included here for reference.

[LosAngelesSportsFan]

Hey Bobcat, one more update. the Orsini II is under Construction.

[bobcat]

Hey Bobcat, one more update. the Orsini II is under Construction.

Cool. Can anyone else confirm this? I know it was supposed to begin construction recently.

[citywatch]

I recall reading some time ago that the 2nd phase of Palmer's apt proj at Fig & Chavez was supposed to be underway around now, or late 2005. So far, I know his 4th apt proj in DT, the Visconti, is under construction near 3rd & Bixel. The web sites of Palmer's 3 apt projs indicate they're fuller today than at anytime since they were completed, in which the Medici right now has only 2 units listed as currently available, while in the past there often were anywhere from 13 to 20 apts open for leasing.

[Art]

I didnt know where this should go but in case anyone's interested:

Me and my wife will be showing a bit of our work(mostly hers, mine is on walls all over LA) at an art opening in the higgins building. This on Saturday 9/10 around 8:30 pm. You can see me high and drunk in person.;)

[LongBeachUrbanist]

2 hours notice??? Sheesh!!! :poke:

[Art]

Yeah sorry, it was thrown at me last minute, literally. I got asked to bring some stuff down about 20 minutes before I posted it.


Oh yeah, coleman, I owe you a beer.:)

[Milton]

Art, I would love to do some photo work of your projects, how long will your work be displayed at the Higgins building?

[Art]

Actually, most of the work we showed was my wife's. And it was actually turned out to be much more of a party where people showed their art that was at a gallery(which was a cool spot,BTW). If you'd like to see some of my work check out our nonprofit's website at www.elacamp.org although it is not up to date. Give me a couple days and I can get together all the addresses of my murals. As for my canvas painting, the thing is I've given almost all of my stuff away, which landed me in a predicament last night

And I had been mistaken, the gallery was called Higgins and it was a little building on Main within earshot of the actual Higgins building. So I was told they will tear down that building for the LAPD motorcrap, it's like they try to plan stuff horribly in LA, seriously.:(

[colemonkee]

^That's exactly where they're planning the LAPD Motorpool. If anyone's interested, they had a sign-up sheet/petition at the Higgins Gallery in the front room. There will be a party-type thing this Thursday where people can sign the list to protest the motorpool. I may end up going around 9ish(?), shoot me a PM if you want to come along. Free valet parking at my building if you are a guest.

Oh, and Art, having beers with you and your buddies was cool. I'd be down to do it again sometime.

[citywatch]

This article should be archived here, esp the part about the Barry Lofts. However, I hope the comment about "80%" of residents is the more telling part of the story:

Don't Say the B-Word

Investors Downplay a Housing Bubble, Though Some Expect A Market Cooling

by Kathryn Maese

As Glendale residents Avianna and Marten Compoc recently surveyed a sprawling two-level unit in the Toy Warehouse Lofts, they knew they had stumbled onto a bargain. Even though the condominium in the Arts District was listed at $820,000, shopping had taught the Compocs that at about $300 a square foot, it was well below market rates. "This is going to sell really fast," said Marten Compoc, who plans to sell his first home to buy one or two units in Downtown.

Central City real estate has come a long way since 2001, when the 20-unit Toy Warehouse Lofts became the first new Downtown condominium project in years. Rising as fast as these new buildings have been prices, which now reach $500 a square foot and up for gleaming stainless steel kitchens, enviable skyline views and proximity to equity-boosting projects such as LA Live and Grand Avenue. Likewise, bloated sign-up lists for new condos regularly top 2,000 people, and competition remains fierce even for a chance to qualify.

With the Downtown market as hot as ever, local sellers, developers, agents and even speculators seem to be ignoring the word that is casting a shadow over much of the nation's housing market. They simply have no fear that a Downtown "bubble" will soon burst. "What I tell people is that while Downtown exists within the context of the real estate world, it also has a little life of its own," said Stephen May, whose company Downtown Residential Real Estate has weathered the ups and downs of the market for 15 years. "When I started there was no Museum of Contemporary Art, no Disney Hall, and only four condo buildings on Bunker Hill. Now there are at least 25 condos projects in development."

May and others think Downtown is insulated from a real estate downturn because of a unique set of factors. Urban appeal, historically distinctive buildings, billions in investment, a hub of public transportation and perceived profit potential, they believe, will keep Downtown humming even as other communities take a housing hit.

Staying Strong

For Downtown, the b-word is "build." The spree has remained strong since last year, even spreading into new territory such as the Industrial District east of Alameda Street where warehouses and old factories are being converted. Other under-construction projects, such as the Alexan Savoy in Little Tokyo, are shifting from apartments to condos even before they open, as developers see a chance to vastly increase revenues. Throughout Downtown, 19,535 units are under construction, permitted, in planning stages or under consideration (a project in development that has not filed paperwork with the city), according to the Downtown Center Business Improvement District. That translates to 29,302 people moving to Downtown between now and 2009.

At the end of August real estate listing service MLS showed 33 Downtown condos for sale, down from 43 in July. "There are 10 fewer condos on the market than there were a little over a month ago," May said in a newsletter to his clients. "I thought all the condo owners were supposed to be freaking out right about now and dumping their properties on the market all at once, causing the b-word to burst. Guess not, or not yet."

Prices also hit a new high, averaging $520 a square foot, up 16% over the same time last year, according to data from Condosource, a real estate brokerage firm that tracks the Downtown for-sale market. In some cases, multiple offers continue to push up prices. "A lot of people are interested in the urban setting and are still willing to pay," said Constance Vassilev, an agent representing the $820,000 unit in the Toy Warehouse Lofts. "There's a bit of slowing, but Downtown is a specialty market and is a bit insulated [from market trends]. I've still had people coming in to see the unit for the last seven days."

An unexpected twist is that the appetite for Downtown living is also increasing the worth of units in many older condo buildings, particularly on Bunker Hill. In fact, property values there have seen the steepest increases: At Promenade West, built in 1981, the price per square foot has spiked 31% from $423 last year to $555 this year. At the Skyline, a 23-year-old South Park complex, residents have seen a 24% increase to $519, according to Condosource.

Troy Soumis, the firm's president, said there is a growing sense, particularly among skeptical Westsiders, that the Downtown boom has staying power and validity. New amenities such as the Broadway Bar are generating interest, and commitments from major chain restaurants including the Daily Grill and Roy's bode well for attracting big name retail tenants. "I don't buy into the idea of a bubble because the majority of people are first time homebuyers who look at Downtown as their primary residence," Soumis said. "If the majority of buyers are prospecting and renting their units then you've got problems. But I think about 80% live here."

Facing the Flippers

While prospectors may be in the minority, a new trend is original owners selling their still shiny units. Condosource found there were 89 condominium and loft re-sales in the first eight months of the year, an increase from 40 in the same period in 2005.

To discourage investors from flipping properties for a quick profit, many developers have added clauses that prohibit the sale of a unit for six months to a year after purchase. At the 280-unit Barry's Lofts at Fifth and Broadway, for example, buyers earlier this year were selling their units the day after closing escrow and making as much as $100,000. The developer upped the prices by $50,000 and nearly half who had reservations pulled out.

Still, for first-time homebuyers looking to stay a while, Downtown condos can be considered a relatively affordable way to break into the market. The median price of a single-family home in L.A. County is $543,890, according to the California Association of Realtors.

Peter Johnson and his fiancée have reserved a condo at the Eastern Columbia Lofts, which is scheduled to open early next year. Though he said he sees Downtown as a good investment, he is taking a long-term approach to his property's appreciation. "We were looking for a starter home, [with] two bedrooms or one bedroom and an office, within the metropolitan area," he said. "A house with equivalent amenities would have cost us about $150,000 more than our unit in the Eastern Columbia. A condo Downtown made the most sense. We were also excited by the possibility of being a part of the redevelopment in Downtown."

The San Diego Effect

Although expectations of a local real estate price slowdown have continued through years of double digit increases, experts now think that a leveling off is coming. Economists at the USC Lusk Center for Real Estate recently predicted that housing prices will continue to appreciate in major markets such as Los Angeles, though at a much more modest 2% to 8% for the rest of the year.
"A pricing bubble occurs when we have an asset and the price soars dramatically upwards, turns at the top and falls suddenly, sometimes to the same level it starts from," said Dr. Dolores Conway, director of the Casden Real Estate Economics Forecast at the Lusk Center. "But these adjustments are very rare, unless we have a major economic shock that would yield job losses. Even then prices drop over a period of years, not months."

What lends credence to these predictions are trends in other home markets. Once sizzling San Diego, which underwent a similar transformation in its downtown, has seen condo prices cool rapidly over the last six months. Homes that once sold in a matter of days or even hours are languishing for weeks or longer.
Some real estate observers say it's just a matter of time before the Downtown Los Angeles market feels a shift. Indeed, Condosource statistics indicate the San Diego effect could be migrating north. The firm found that last month, it took an average of 39 days for a condo to sell in Downtown, a week longer than the 32-day time frame in 2004. Some realtors say the lag time is due to the slow summer months and point to the fact that there is still more demand than supply for the sleek new condo towers that seem to be announced almost weekly.

Still, the notion that the real estate market has peaked, or soon will, is doing little to affect buyer behavior. Few are choosing to sit on the sidelines in anticipation of the Downtown bubble springing a leak, or bursting outright.

The Compocs, who continue to scout for homes Downtown, say it's a gamble they're willing to take for what they see as a community on the rise. "Living here would be fulfilling a dream for us, but we're also looking for a good investment," Avianna Compoc said. "Prices will go up a lot more, but it will also take longer than people expect. But that's okay. We're willing to hold on."

[colemonkee]

Great article, citywatch. I think this bodes well for downtown in general. A slowing of the growth of prices will keep units downtown somewhat affordable, and als long as construction materials prices slow a tiny bit as well, we should see steady but sustainable development downtown.

"If the majority of buyers are prospecting and renting their units then you've got problems. But I think about 80% live here."

From what I've seen so far, this statistic seems to be true. There are only four units in my building that are for sale that are unihabited. They are not selling quickly, IMO because they are asking too much.

To discourage investors from flipping properties for a quick profit, many developers have added clauses that prohibit the sale of a unit for six months to a year after purchase. At the 280-unit Barry's Lofts at Fifth and Broadway, for example, buyers earlier this year were selling their units the day after closing escrow and making as much as $100,000. The developer upped the prices by $50,000 and nearly half who had reservations pulled out.

Well no shit, Sherlock! The entire Barry Loft sales organization is an unprofessional, shady mess. I have zero respect for them. I can guarantee you that this move was NOT intended to remove investors, but to squeeze more money out of people due to rising prices. I'm thrilled that it backfired on them.

Peter Johnson and his fiancée have reserved a condo at the Eastern Columbia Lofts, which is scheduled to open early next year. Though he said he sees Downtown as a good investment, he is taking a long-term approach to his property's appreciation. "We were looking for a starter home, [with] two bedrooms or one bedroom and an office, within the metropolitan area," he said. "A house with equivalent amenities would have cost us about $150,000 more than our unit in the Eastern Columbia. A condo Downtown made the most sense. We were also excited by the possibility of being a part of the redevelopment in Downtown."

I hope a lot more people share this same sentiment. I moved downtown for the same exact reasons (reasonably affordable, a seemingly good investment, and to be part of an up-and-coming area). The more people that move into the area with this attitude, the better chance we have of the "downtown renaissance" actually happening. People will act not just to protect their investments, but improve their neighborhood.

Now we just need to get the Medallion going. :D

[POLA]

Bill Maher on the subject (and rather funny read too):

And finally, New Rule: Not to burst your bubble, but all bubbles burst! I don't want to say real estate is overpriced these days, but I had a refrigerator delivered this morning, and a homeless guy offered me three million for the box! Now, what is so distressing about this situation is that we just went through a bubble-bursting trauma with the dot-com crash. And here we are just five years later with real estate prices that could aptly be compared to Courtney Love: irrationally high and about to collapse.

You know, it's funny, one argument that had always been leveled against marijuana use was that it supposedly affected your short-term memory. You know, it's funny, one argument that had always been leveled against marijuana use was that it supposedly affected your short-term memory. Well, whatever it is--the point is, Americans can no longer remember even recent history. Detroit has completely forgotten the lesson of the '70s, which was, when an oil crisis looms, stop making Godzilla-mobiles.

In Iraq, George Bush totally forgot the lesson of Vietnam: "Call Dad!" And yet, to be fair, it's not in the red states where this market insanity is most acute. It's among the supposedly-savvy coastal elites, where buyers are dumping trillions into mortgages they can't afford, proving again just how much people will pay to not live in Kansas!

No, folks, it is really out of control here in California. One property in San Diego sold five times in one day, with the price going up and up and up until it was just a picture of Donald Trump laughing.

But it won't be funny when the bubble bursts and people start going bankrupt, taking banks down with them, and then the markets and then the dollar, causing mass rebellion against the government. At which point the Republicans will run an election based on renaming Amtrak the "Jesus Choo-Choo." And they'll win it!

And the whole thing will fester to the point where our economic Plan B is to live in caves and barter. Because if there's one thing that Republicans, schooled in the ways of Wall Street, have taught us, it is this: don't spend money you don't have; spend money other people don't have.

Luckily for me, all my money is tied up in Google, sunscreen and guns!

[citywatch]

The entire Barry Loft sales organization is an unprofessional, shady mess. I have zero respect for them. I can guarantee you that this move was NOT intended to remove investors, but to squeeze more money out of people due to rising prices. I'm thrilled that it backfired on them.

Downtowners can't afford to have lame, greedy devlprs or property owners in their midst, for any exploitation that such ppl will do to their part of the hood may hurt the entire area or at least some of its current momentum & rising reputation.

I'm still concerned that the owner of the Arcade bldg on Broadway has been described as allowing shoddy construction work to be included in the conversion of that site to condos, so I certainly don't want to hear about problems with the ppl who control the Barry Lofts----who I believe also are the same ones originally responsible for your bldg, the Higgins.

[colemonkee]

^Yes, Barry Shy redeveloped the Higgins, and there were many problems with that building as well. Luckily, I bought from a reseller and my process was very smooth. From what I've seen, Shy's development's aren't hampered by quality concerns (quality at all three developments I've seen seemed decent enough), but more him saying one thing, then doing another. This price hike thing is a perfect example.

I agree, we can't have developers who are misleading or allow poor quality construction, but so far people have gotten around it. How is the Arcade Building coming along, anyway? That's been under construction for some time now.

[citywatch]

How is the Arcade Building coming along, anyway?

I first got a hint that the quality of the proj may not be up to par based on the descriptions of the bldg on a DT resident's blog site. That blogger apparently visited the Arcade a few months ago & said the workmanship of the one unit he did see wasn't too impressive.

We SSPers who don't live in DT depend on ppl like him or you or LAB to keep us up to date about projs like the Arcade. IOW, your guess is as good (or actually better, since you live alot closer to properties in DT often discussed here) as mine.

[LongBeachUrbanist]

^ That post a few months ago was also the last I've heard about the Arcade Building. I'll try to check it out tomorrow when I'm down there for the MTA Board meeting.

[colemonkee]

I driven by the Arcade Building a bunch of times recently and it still looks the same, but it's really hard to tell progress from the outside.

[LongBeachUrbanist]

Off-topic, does anyone know when the new Downtown News Development Quarterly will be coming out? We must be due pretty soon - it seems like forever since the last one.

[citywatch]

I'll try to check it out tomorrow when I'm down there for the MTA Board meeting.

If you have a nearby camera ready & available, that will be so much the better! If you can actually walk into the Arcade bldg too, that will be fantastic.

[Art]

It looks great from the inside. I walked through there about 2 weeks ago, and it looked a HELL of a lot better than the surrealistically run down fashion it used to be in.

[LosAngelesSportsFan]

Off-topic, does anyone know when the new Downtown News Development Quarterly will be coming out? We must be due pretty soon - it seems like forever since the last one.

you know, i was thinking the same thing the last two weeks. its already mid september, way past due. the last one was on 5/30.

[LongBeachUrbanist]

Without too much effort I found the Downtown News Editorial Calendar (http://www.downtownnews.com/MediaKit/Calendar.html), which states that

:cool: :D :eek: :crazy: :eek: :D :cool:
:)
:) :)
:) :) :) the Special Development Issue will come out 9/19, i.e., this Friday online!!!
:) :)
:)
:cool: :D :eek: :crazy: :eek: :D :cool:

:cheers:

Really, most of the info is already posted by one of y'all on these forums, but it's nice to get that nice fat digest with extra tidbits and morsels to keep my obsessive brain happy!!!

[LosAngelesSportsFan]

Nice Work!!! hell ya.

[citywatch]

Really, most of the info is already posted by one of y'all on these forums,

However, no one here really knows the latest about the Medallion proj, as one major example, & so I hope the updated list on Friday will give everyone a better sense of what's going on behind the scenes.

[bobcat]

Projects added: Roosevelt LA, Coronita, Union Point, 308 E 9th, 810 S Spring, City Front Place, Barker Bros Building.

[bobcat]

Crowded Out by Luxury Lofts, Poor Seek Relief
The City Council considers protections for low-income housing in downtown L.A.
By Cara Mia DiMassa
Times Staff Writer

October 12, 2005

The Los Angeles City Council moved Tuesday to impose the first limits on the luxury loft and condo boom that is transforming downtown Los Angeles, giving tentative approval to a moratorium on turning low-priced residential hotels into expensive apartments.

The action comes amid growing concern that available housing for the poor in the downtown area is rapidly dwindling amid the gentrification of the historic neighborhoods around skid row.

The vast majority of L.A.'s subsidized single-room-occupancy housing is downtown and in recent years, officials said, the number of available units has fallen by more than 1,200 — nearly 8% of the total. An additional 2,000 units are under consideration for conversion.

The decline comes as downtown's residential real estate market has exploded, with dozens of derelict bank buildings and decaying hotels in the urban core being refurbished as high-end lofts and condos selling for as much as $1 million. The population of downtown rose from 18,000 to 24,000 in the last few years, according to the Central City Assn. New construction is scheduled to bring more than 30 additional high-rise residential towers to the area in the next few years.

The council unanimously approved a motion to create a citywide ordinance that would place a one-year moratorium on the demolition or conversion of any single-room-occupancy or residential hotels into market-rate rentals and condos. During that year, the city would draft a housing preservation ordinance.

Councilwoman Jan Perry, who proposed the moratorium, said the motion is "an attempt to provide a layer of protection for housing that is quickly going to be extinct. It's a recognition that a balance needs to be achieved."

Several hotels that for years served poor residents have gone upscale recently. In addition, plans call for the loft conversion of the El Dorado-Pacific Grand and transformation of the Bristol into a boutique hotel. Several others could be converted to lofts, including the 512-unit Alexandria, once one of the city's grandest hotels with its 60-foot-high lobby of Italian and Egyptian marble and extravagant gold leaf ceilings.

Such architectural details and rich histories appeal to loft developers, but advocates for the homeless worry that the poor are being pushed out.

"When you take these hotels and you convert them into high-end apartments or dwellings, [the city must] think about those people who are living there," said Anita Nelson, executive director and chief executive of the SRO Housing Corp., a nonprofit housing agency. "They have to go somewhere."

Some developers behind the downtown revitalization said they supported the moratorium in principal — but worried about the housing preservation ordinance's details.

Tom Gilmore, one of the architects of downtown's revitalization, said a housing preservation ordinance, "if done properly," can be "extremely valuable. But if done improperly, it does more harm than good."

Gilmore questioned some of the housing department's figures — saying that the department is "making it look as if the major threat to SROs is yuppie housing." He argues that commercial development is a more serious issue than housing gentrification.

Kate Bartolo, senior vice president of development for Kor Group, whose company is renovating the Eastern Columbia Building, said developers and activists "need to elevate ourselves beyond white hat and black hat" when it comes to issues regarding downtown housing.

Bartolo said downtown's rising property values require the city to reexamine where low-income housing should be located.

Given the high cost of fixing aging buildings, Bartolo questioned whether residential hotels could ever be brought up to code for use as low-income housing. She suggested that the city consider building housing for the poor farther east in the warehouse district, where it would be less expensive.

"We need to bring in developers, the [Community Redevelopment Agency] and others and start siting locations [for SROs] in non-concentrated areas that offer opportunities for affordable housing," Bartolo said. "It may be less expensive to build … new SROs in an outlying area with access to buses and social service providers."

But housing advocates say that many hotel dwellers have lived downtown for years and should not just be pushed aside when well-heeled residents move in.

"This is our community," said Becky Dennison, co-director of the Los Angeles Community Action Network, an advocacy group for the homeless that monitors tenants at downtown residential hotels. "You can't just uproot an entire community and push people out…. We're all for building more housing. But not at the expense of what we have."

Cloletta Brown is one of those tenants Dennison is concerned about. Until a year ago, she lived in the Bristol Hotel — a 1927 Art Nouveau landmark near 8th and Olive streets.

But late last year, she said, she and other tenants were abruptly evicted by the owner, who has plans to turn the building into a luxury hotel.

Since then, the "40-something" Brown said, she and her 2-year-old son, Emmanuel Rae, have lived in a string of shelters and motels. "You have to keep a roof over your child's head," she said.

On Tuesday, she and Emmanuel were in the council chambers for the vote.

"If they make downtown into lofts," Brown asked, "who's going to be able to afford them? Who's going to be able to live in them?"

Farris Sanders, 39, moved to downtown five years ago — lured by the promise of a home that was affordable for him, his girlfriend and her three children.

"We were looking for a place to stay," said Sanders, who works as an extra and occasionally as an actor. "A place we could afford." His girlfriend works for an accounting firm as an assistant, he said.

He found that place at the Morrison Hotel, where the Doors posed for the cover photo for their 1970 album of the same name.

But recently, Sanders said, his landlord has made a number of efforts to force him and other tenants out.

He charged that the landlord neglected to repair the building.

Late last year, the tenants sued the owner, alleging that they had been forced to live with rats and without heat, working plumbing and other basic amenities.

The Los Angeles city attorney filed a criminal complaint against the owners of the hotel, Hope Pico Co. and four individuals, charging them with misdemeanor violations of several city codes, citing inoperable fire exits; broken doors, windows, floors and walls; and vermin infestations.

"Downtown does need to be cleaned up," Sanders said. "But they need to refurbish stuff that is already there. A lot of people live [in the residential hotels] who can't afford to live anywhere else."

[LosAngelesSportsFan]

Bobcat, do you mind if i copy this first page onto SSC? i would obviously credit you for it.

[bobcat]

Bobcat, do you mind if i copy this first page onto SSC? i would obviously credit you for it.

That's fine.