[Wright Concept]

Well citywatch, that's the risk they took by going with this public-private enterprise. If they went on their own with this that would be a non-issue.

[LongBeachUrbanist]

But the report by the Grand Avenue Authority questions whether the project would increase the ratio of crimes per Los Angeles police officer from 20 to 57 - nearly three times more than they handle now.

This statement is ridiculous. Why would this project -- which in the context of our city is a drop in the bucket -- nearly triple the number of crimes per cop?

I f-in hate the Daily News.

There is one bright spot in the article. Apparently the EIR has settled on two alternatives, and one of these would result in replacement of the County offices. (I'm not sure which building(s) this replaces, I need to read the EIR.)

Now is our chance to get rid of one or both County buildings. There are several public hearings coming up: the first is on 20 November. This is our chance to sound off on the replacement of the County offices. The link to the pdf schedule is here (http://www.grandavenuecommittee.org/assets/Combined_Notice_11_06.pdf).

[Easy]

I saw that as well. I could only figure that they were referring to the crimes per officer in the area of Grand Avenue. It is so poorly worded that you pretty much have to guess what they mean.

[Carioca]

The entire article is absurd, worrying about migratory birds? In DTLA??? come on... And yah, the crime at Dizzy Hall must be way worse then 5th and Main... jeez And does anyone at City Hall know about how many JOBS come with 449,000 feet of retail??? "Evidence suggests that the taxpayer is getting a raw deal," Yah, let's just leave the empty and parking lots there... Forget the tax revenue for the city, er- um oh yah- THE POLICE... You have to wonder how these people keep there jobs, and how they can type this sh*& up with a straight face. So building those tall shinny buildings must be the easy part...

[BrighamYen]

"Oh shit, Microsoft has just announced they're going to lease out 38,000sf of space in the Wells Fargo Tower!!! This means that more people will be driving to downtown to work!!! That means more traffic! Let's stop these evil office buildings from gaining more tenants!" - Tonnie Bell and the LA Dickface News

[SunMonTueWedThuFriSa]

Tonnie Bell and the LA Dickface News

:haha: :haha: :haha:

[ocman]

20 to 57? Really, how the fuck do people come up with that? How the fuck can a study show that? That's amazing. An urban study that predicts exact numbers for human criminal behavior. Are they kidding?

[citywatch]

Some may think I'm too cautious or pessimistic when it comes to bits of good news about the hood. Now you see why:

:gaah:

$2-Billion Downtown Overhaul in the Red

http://www.latimes.com/media/photo/2006-11/26465164.jpg
Phase One of the project, which is to rise on the site of the parking structure at left, was
supposed to break ground as early as next month. But officials now say it will be delayed
at least until October and possibly beyond. (Bryan Chan / LAT)

Developers say they need tax aid before starting the Grand Avenue project.

By Cara Mia DiMassa, Times Staff Writer
November 17, 2006

The ambitious effort to remake downtown's Grand Avenue into a $2-billion cultural and retail hub designed by Frank Gehry is over budget and behind schedule, with the developers saying the project "is not economically feasible" without tax breaks from the city, according to documents obtained Thursday. The developers said they are negotiating with the city for temporary rebates of more than $40 million on hotel and parking lot taxes.

They said such concessions are needed to make the project work financially. The complex is to include eight high-rises and retail pavilions around Gehry's landmark Walt Disney Concert Hall.

Phase One — which includes the architect's dramatic glass-curtained 47-story tower, a 24-story tower and shopping areas — was supposed to break ground as early as next month. But officials now say it will be delayed at least until October and possibly beyond.

:brickwall:

The developer's request for the tax rebates was criticized by some community activists, who have already questioned whether the city and county governments are getting a good deal under the complex financing plan.
The request is the latest of several tie-ups involving the plan's fine print that have caused delays and left some Grand Avenue supporters concerned.

The situation mirrors a slowdown in downtown Los Angeles' once red-hot construction market. A Times review of approximately 100 residential and commercial developments downtown shows that about 20% are behind schedule. Though parts of the city center are abuzz with heavy construction, some real estate specialists say a slowdown is apparent.

"It has gotten to the point where with … huge construction costs combined with huge land costs and a flat sell-out rate, it just doesn't pencil out anymore," said Mark Tarczynski, a senior vice president at CB Richard Ellis. In recent months, relatively few new projects have been announced, Tarczynski added. In addition, he said, "you're seeing a lot of projects getting theoretically put on hold. Most do not want to admit that their projects are put on hold. You don't see anything happening."

Some experts are skeptical about several huge projects announced with much fanfare, including a 50-story condo development near the Civic Center and twin residential towers near the Harbor Freeway.

Gehry and officials at Related Cos. unveiled the first plans for the Grand Avenue project in April. His design calls for the two glass towers situated around shops, outdoor dining areas and a boutique hotel on the block bounded by 1st, 2nd, and Olive streets and Grand Avenue. The project is also to include 400 condominiums, 100 affordable housing units, a health club and a spa.

The complexity of the design, coupled with site issues and increased construction costs, have driven up the price tag. Previous estimates had put the cost of the project, including a 16-acre park that would run from the Music Center to City Hall, at $1.8 billion. Now, according to the documents, the three-phase project will cost $2.05 billion. Bill Witte, president of Related California, called the delays and cost increase "nothing out of the ordinary for a project this size…. It's just complicated. I really know of no other way to say it. I will only say that for a project of this magnitude, if you don't have hiccups like this, it would be highly unusual."

Related announced in September that Gehry's design would push up the cost of Phase One by 40%. But the company laid out a broader outline Thursday of why the overall costs are rising and presented its case for why the tax rebates are necessary. Among other things, Witte said, the cost of building the first phase's 100 affordable housing units (20% of the total units in that phase) is much higher than the developers previously thought.

The delays and cost fluctuations mean that Related will not pre-sell condominiums in the first phase until at least mid-2008. "I'd rather that it be then than today," he said. "Clearly there's a slowdown, not just in downtown…. People are on the sidelines waiting to see where the market is going to go."

Financing for the project is complicated because the city and county own the land on which the first two phases are to be built. Related is essentially leasing the parcels for 99 years. Last year, the company paid the city and county $50 million, which is the projected rent the developer owes on Phase One and part of Phase Two for that period. The city and county plan to pour the $50 million back into the development of the park and street improvements.

Civic leaders initially hailed the deal, saying it would allow a major new development to rise without direct taxpayer subsides. But a consultant who analyzed the agreement for the county Board of Supervisors concluded that the arrangement puts the county at risk if the project goes over budget or if the downtown real estate market cools.

Witte said Related officials have told city and county leaders that the hotel in Phase One "is completely unfeasible" without a 20-year rebate of the city's hotel tax, which is a little more than 14%. Related also says a temporary rebate on the city's 10% parking tax is necessary because the company has agreed with public officials' request to keep parking fees affordable.

In order for the deal to go through, final documents — including lease agreements and a disposition and development agreement — must be approved by a phalanx of government bodies.

Appraisal cited as pivotal

Sources involved in the planning process said the fate of the final deal hangs in large part on how the properties are appraised. If the county's land is assessed at a much higher value than the city's, that could necessitate renegotiating how some of the rent from the deal is shared by the two governments.

Last week, the final environmental impact report on the project found that it would increase traffic downtown and require more police and other public services. Details of the study were first reported in the Daily News. The tax rebate request has buoyed critics who question the city and county's financing help for Grand Avenue.

"I want to ask, 'Do the people of South-Central, East L.A. and the Valley have to subsidize yuppie housing downtown?' " said Joel Kotkin, a Southland author and commentator on urban issues. "Where is our City Council and our progressive mayor on that issue?"

:eviltongue:

Jon Coupal, president of the Howard Jarvis Taxpayers Assn., said the continuing negotiations over tax givebacks point to the problems that occur when governments decide to help finance private developments. "I have respect for developers," he said. "They are good businessmen. But they are businessmen interested in the bottom line, and they will negotiate the best possible deal for themselves. Often what is the best possible deal for them is not the best deal for the taxpaying public."

[LAMetroGuy]

Hmmm, 40 million is just 2% of 2 billion... this is pocket change for eli broad...;) I consider this immaterial to the entire project budget.

[Wright Concept]

^ Unless you can get into Eli Broad's pocket then it's very important to the project even starting because the 40 M can easily double by the end of the year.

[LAMetroGuy]

I'm sure he'll make it happen. :D

[Wright Concept]

Sometimes I wish I was the developer on this because I would take out the money for it and make the city/county pays double the interest on the loan until the project is completed. That will make then think twice about holding it up.

Or make a deal with Broad to do the affordable housing portion since he made his $$$ in single family housing outside the city of LA.

[LAsam]

That article is very unnerving... I hope this project doesn't go into limbo...

[Westsidelife]

Even though this project is being further delayed, it's good to know that LA Live is progressing nicely.

[BrighamYen]

Let's hope this thing gets off the ground soon! :)

[ocman]

Why do we think we can rely on Eli Broad to just throw money at the problem? I'm sure he's sick of the city asking him for more money all the time.

[edluva]

LA is the 2nd (?) largest agglomeration of billionaires in the world and all we hear about are Broad and Geffen -and they publicly hate each other.

and I still don't see how DT can be called "hot". We've gotten three or four small condo bdgs up or u/c and a couple of holes dug in what has been the longest, most dramatic real estate run-up in modern history. DTLA is catching the waning end of the boom that every other city outside of Detroit has been riding from the very start. All the action so far has been on paper.

[bobcat]

I kinda expected this project might run into some problems. I think a lot of its thunder is being stolen by projects in South Park and so far there's nothing to really make it stand out other than Frank Gehry's designs. LA Live will have downtown's first 5 star hotel and I don't think the area can support more than one at this time. And with the nearby Gansevoort Hotel under construction a possible W Hotel at Grand Ave looks a tad bit underwhelming. Fig Central is looking to land an upscale supermarket and for sure downtown can't support two of those. Finally, the planned City House is taller and more luxurious than the residences of Gehry's iconic tower. My guess is that Related may have to go back to the drawing board and possibly even rethink their concept.

[bobcat]

This document (http://www.grandavenuecommittee.org/assets/JPA_Board_Memo_11_20_06.pdf) details the latest refinements made to the project. For phase 1 they've bumped the hotel up from 4 star to 5 star and added a few more residential units.

[Steve2726]

:previous: Page 12 of that document is a must read. It says that construction won't start before October of 2007 at the earliest, and that without approval of the recently requested subsidies, Related will walk away from the project declaring it infeasible. I wonder what impact that would have on the $50 mil deposit they made for the park. Is that money non-refundable?

[bobcat]

^I believe the $50 mil is nonrefundable, so it would appear the city and county have the upper hand in negotiations.

Grand Avenue project clears first hurdle
The $2-billion downtown L.A. development gets unanimous approval of a city-county panel. But tax assistance issues are still being worked out.
By Cara Mia DiMassa
Times Staff Writer

November 21, 2006

The Grand Avenue project cleared its first major hurdle Monday despite continuing questions about the more than $40 million in tax rebates the developer is seeking.

A joint city-county authority voted unanimously to approve the $2-billion plan, which calls for building shops, condo towers and a boutique hotel on city and county land near the Walt Disney Concert Hall in downtown Los Angeles.

The deal must now go to the Board of Supervisors, the Community Redevelopment Agency and the City Council, where the tax issues will have to be decided.

The city's influential chief legislative analyst, Gerry F. Miller, said in an interview Monday that talks over the tax rebate continue. He said he would only endorse the tax break if the developer can prove that it is vital to making the project work.

The project's developer, Related Cos., has indicated in documents that the project is not economically feasible without the rebates on the city's hotel bed and parking taxes.

A source familiar with the negotiations between the city and Related said that the city's analysis thus far supports Related's contention that the 275-room hotel, a cornerstone of the project, cannot be built without the public funds.

At Monday's meeting, critics called the tax rebate — which would come on top of other breaks Related is already receiving — unacceptable.

"This project is larger in size, subsidy and government involvement than any other project in Los Angeles, and yet it is smaller in terms of community benefits," said Benjamin Torres, who represents a group of community and labor organizations called the Grand Avenue Coalition for Community Benefits.

The debate centers on how public money is being spent on the project. Related Cos. is making a $50-million payment to the city and county, representing the prepaid, 99-year lease of the property in the project's first phase and a deposit on the land to be used for the second phase. That $50 million would be poured back into the development, to fund a 16-acre park that would be part of the project's first phase.

Other public investments in the project — about $19 million — would be used to fund traffic, streetscape and public space improvements. That money is expected to come from city and county property tax revenue generated by the project — or perhaps from a loan against expected tax revenue.

Some activists at Monday's meeting said there were not enough concessions to working-class Angelenos in the project.

The joint powers authority had negotiated a deal in which 20% of the units in the first phase of the development — or 100 units — would be affordable housing, for people making 30% to 60% of the area's median income.

But Noreen McClendon, the executive director of Concerned Citizens of South Central Los Angeles, said that "low-income workers don't get anything out of the project." McClendon, a member of the Grand Avenue Coalition for Community Benefits, expressed concerned about the sizable public investment required to complete Grand Avenue and its accompanying public park, which she called "a project in downtown Los Angeles for the wealthy."

"We are talking about building for a population that isn't even here yet," she said. "We need to start talking about using some of these moneys to complete the projects" already in the works elsewhere.

Public officials dismissed the criticism, saying that any public investment in Grand Avenue would come directly from revenue generated by the project.

"If there's no development, there are no benefits," said Gerry Hertzberg, a spokesman for Supervisor Gloria Molina, who chairs the joint powers authority. "You can kill the goose, and you get nothing. Just a parking lot."

Before introducing a recommendation to approve the deal, billionaire and philanthropist Eli Broad, the chairman of a committee that has been shepherding the Grand Avenue project, called Monday's vote "a critical milestone in realizing the dream of creating a world-class downtown for Los Angeles."

Other business leaders and some community members welcomed the deal as downtown Los Angeles' best chance for establishing a vibrant city center.

"We need this project to give life to what we already have here," said Carol Schatz, head of the Central City Assn. and the Downtown Business Improvement District. "Right now, it's not a grand avenue. It needs to be a grand avenue, with amenities that pull people from all over."

Schatz criticized what she called "noisy talk" from some community activists, saying "it makes it very difficult for us to move forward in a positive way."

Bruce Baltin, vice president of PKF Consulting, which is working with the city on a number of hotel projects, including Grand Avenue, said that it was "not unusual these days" for cities to give hotel tax rebates in order to attract new, often high-end hotels.

Baltin said he couldn't comment on Grand Avenue specifically. But he added, "the concept is something that is being applied fairly frequently these days, as cities look to use hotels as vehicles to spur economic development."

Last year, the City Council approved up to $177 million in similar subsidies, including $140 million in hotel bed-tax revenue — to developers of L.A. Live, a 55-story hotel and condominium project next to the Convention Center.

At the time, council members said they voted for the deal hoping the project would help make the Convention Center profitable.

Another hurdle for the Grand Avenue project may be how the city and county properties that would be part of the three-phase project are appraised. The appraisals will determine how much money the city and county get out of the deal and how much they must pour in. Councilwoman Jan Perry expressed concern Monday that a vote on the project by the Community Redevelopment Agency and City Council not be scheduled until those issues are resolved.

Bill Witte, president of Related Cos. of California, told the joint powers authority that the public park would be the first part of the project to be completed. He said that once the plan clears all of its public hurdles, his organization is committed to moving forward on the project at full speed.

[SunMonTueWedThuFriSa]

The greening of Grand Avenue
By Scott Timberg, Times Staff Writer
November 25, 2006

LAURIE OLIN made a name for himself as one of the nation's leading landscape architects by designing projects to suit the history and culture of each location: The eminently civilized Bryant Park, which sits behind the New York Public Library, and the tailored sculpture garden at the National Gallery in Washington, D.C., seem to unfold naturally out of the verdant landscapes around them.

But working in Southern California, where Olin, 68, has been a major force in planning downtown's Grand Avenue Project, presented special challenges.

"The question for Los Angeles is, 'What's native?' " says the easygoing, slightly rumpled East Coast architect, surveying a bleak corner of 1st Street and Grand Avenue that is expected to be radically transformed.

"The resident plant community here is mostly coastal sage scrub, which is highly flammable. There's not a single tree you can see right now that's native — nothing here is native. They're like you and me: They're all immigrants. There's a Mexican fan palm. These are ficus from East Asia. Almost everything you can see from here is from Asia or Latin America."

Instead of plants that evolved here, Olin relies on what he calls the region's "extraordinary horticultural tradition," which goes back at least to the 1890s.

Considered an heir to the gracious and civic-minded Frederick Law Olmsted, who designed New York's Central Park and planned Stanford University, Olin is pacing the area that will become the ambitious Grand Avenue Project, whose budget may increase from its original $1.8 billion. (The plan's developer announced recently that it needs tax breaks from the city to make the project feasible.)

It's hardly Olin's first visit to L.A.: He landscaped Pershing Square, the Los Angeles County Museum of Art's sculpture garden and the J. Paul Getty Museum. Even so, he has a bemused relationship with Southern California and its idiosyncratic Mediterranean climate.

"People here are terrified of deciduous plants," he says. "If a tree loses its leaves, people think it's dead. Winter is like old age here. So we've learned that we need to have enough evergreen trees that it's not too gloomy and have tried to get the longest blooming season we can. Even in Los Angeles, after all, there's something called winter."

The project's first phase, in the area surrounded by 1st Street, Grand Avenue, Olive Street and the Colburn School, is conceived as two residential high-rises, numerous restaurants and retail, an upscale grocery store and extensive landscaping. For now, however, the spot is dominated by a charmless parking garage.

Olin, who has worked often with project architect Frank Gehry, is lending more than just his touch with shrubs and bushes. Earlier in the day, poring over a model of the plan, he points out new buildings he likes and old buildings he doesn't. He points to the area that's now a jumble of vacant lots and garage ramps that will become a 16-acre park, designed by Mark Rios and Brenda Levin, connecting the Music Center and City Hall.

"So part of my role has been working on the larger urban vision, the connections, the arrangement of the parts," he says. "Most people don't think of it, but a city is a landscape. You can add buildings to a landscape. I don't think you add landscapes to a building — that's sort of a decorator's idea."

William Witte, president of Related Cos. of California, the project's developer, calls Olin "a big-picture consigliere" for the plan. "He brings a feel over many years of dealing with urban contexts. There have been very few vertically integrated mixed-use projects on the West Coast, so it's valuable to have someone who understands how all the pieces fit."

Olin was born in rural Wisconsin in 1938 and grew up mostly in Alaska, where, as he wrote in his book "Across the Open Field," "[m]y playgrounds were the woods, streams and hills of the Tanana Valley."

After earning a bachelor's in architecture at the University of Washington, he worked for a few years in that field. But Olin went through a crisis of faith in the early '70s, a time when a lot of his peers were feeling unstuck.

He took a sabbatical to England and wandered the ancient farmland and rolling downs of Oxfordshire and Wiltshire.

"I was not so sure I wanted to stay in architecture," he recalls. "I wasn't exactly trying to find myself but trying to find something meaningful to do with my life. I love architecture. But I moved to being interested in something else as well: the layering of living stuff."

South Britain has been landscaped continuously since the Bronze Age, with the stamp of the Romans and Saxons still visible. "Why the English landscape impressed me so much was because it was a working landscape that was very old, very dense in terms of population, ecologically rich and very layered…. Layers of time were still visible."

The scene inspired him "to produce a dynamic, culturally diverse, economically viable, dense landscape that was both beautiful and ecologically rich."

Olin has tried to bring that lesson to his work since.

He's responsible for a number of projects in London and Philadelphia, where his 60-person firm, Olin Partnership, is based and where he teaches at the University of Pennsylvania. He's also known for recent projects in New York, including Battery Park City and Columbus Circle; in both cases, much of his work is essentially a roof deck, with foliage over a concrete platform and subway station.

This was also the case with a project he completed with Gehry, Barcelona's Villa Olympica. "I treated the whole building site as a landscape that towers came out of," he says. Another Gehry collaboration, which he calls "a warmup exercise for this one," was the Stata Center, a high-tech lab-office-classroom complex at MIT.

"I like to work with him on everything," says Gehry. "He becomes a real partner in the process. He understands architecture, and he's willing to explore ideas. I trust his design judgment impeccably. The biggest problem, because he's so in demand, is getting his attention."

The Boston Globe praised MIT for Gehry's architectural risk-taking and Olin's purposeful terracing, though then-Times architecture critic Nicolai Ouroussoff likened it to "a New England village envisioned by Dr. Seuss."

"It's early days," Olin says of the L.A. project, which has fallen behind schedule and likely will break ground next year.

The general issues are already becoming clear, though. The trick, Olin says, is "trying to figure out how to have our cake and eat it too" by creating a pleasing setting within budget.

Some of the challenges are technical. The streets of Bunker Hill, for instance, drop steeply, which has led in the past to the creation of inaccessible plazas.

"Related didn't want that, we didn't want that, and the citizens didn't want these isolated fortress-like things. So how do you take this difficult sloping site and produce decent public space and address the street and open it up?"



The slope, though, gives the site some semblance to a European hill town, with pedestrian traffic, restaurants and cafes at various levels, and inspiring views all around. But he doesn't want the place to be all stairs.

When it comes to roof decks, there are some things you can't do in L.A.: Most mosses and sedums, which are lightweight and good for roofs, are destroyed by dry heat and air pollution.

Olin wants as many trees as possible, but they're not only heavy, they also require a lot of soil, which weighs almost 100 pounds per cubic foot.

"At the Getty we did a lot with vines, and we have color and seasonality and things like that. Vines are like trees without a backbone: They lie around and don't have any stiffness. But they have all that organic matter that needs to photosynthesize, and they need roots and soil and air and nutrients. So even with vines there's a lot of technical fooling around to pull it off."

The technical difficulties, of course, quickly acquire a financial dimension.

"We've been in schematics for months," says Olin, whose role will shrink after the planning is completed. "Every time we do a drawing, someone takes it away to go and price it and comes back saying, 'Oh, my God, it costs more than I thought it would.' "

Some challenges, such as this one, Olin considers a normal part of the process. Other things drive him crazy.

"A lot of people have this strange idea that there's this gulf between nature and culture," he says, standing across from the Walt Disney Concert Hall.

"I think that's crazy. We're all in nature right now! In the middle of L.A.: Ecologically it has living elements. But most people can't see it, or they've forgotten it. So the question is how not to have to choose between nature and culture but to put them together in a productive way." Despite the long slog ahead, he's excited by the prospect.

"To be dining outdoors up there and to see Disney Hall and see the traffic coming and going and the lights of downtown — I think it will be spectacular."

scott.timberg@latimes.com

http://www.latimes.com/entertainment/la-et-olin25nov25,1,7781655.story?page=1&ctrack=1&cset=true

[Carioca]

Mega-projects could reshape L.A. growth
By Cara Mia DiMassa, Times Staff Writer
December 13, 2006

Los Angeles is having a city-building moment.


"Two massive projects — the L.A. Live entertainment complex next to Staples Center and the Grand Avenue development on Bunker Hill — are underway. A third giant project, a major expansion of Universal City, was unveiled last week. All adhere to a much-ballyhooed planning strategy embraced by Los Angeles power brokers."

Does it seem fair to put both developments in the same sentence? How is the Grand Ave. Project "underway"? I will feel much better about the whole situation when I see ANY sign of life on those parcels... I'll be partying when the cranes go up!!!!!

[JRinSoCal]

I strongly believe that Grand Ave will get built even if it takes years to actually break ground. Remember this is LA not Dubai. Just look at LA Live, it took 6 YEARS for it to breakground. So it will happen its just a matter of time.

[colemonkee]

Agreed, though I don't expect this to take another 4 1/2 years. It's been planned for roughly 2 years now, so I would expect it to break ground within 1-2 years from now, provided construction costs don't continue to spiral up at the current rate. I don't however, expect them to break ground in October as planned.

[bobcat]

I don't however, expect them to break ground in October as planned.

I believe their breaking ground by Oct 2007 was a stipulation of the original agreement, although I suppose they could receive an extension if necessary. But I agree that the project will get developed eventually. They may have to wait until either construction costs come down or the area has developed a little further in order to reduce the financial risks.

[Westsidelife]

The Grand Avenue project is going to take forever to be completed. The second and third phases completed by 2015? Are you kidding me?

[bjornson]

2030? ;)

Well, it'd be a miracle by 2015. At least Gehry can design some nice non-flat-topped towers.

[LAMetroGuy]

CR/LA Board Meeting for January 4th, includes the updatd Grand Ave Memo:

http://www.crala.org/internet-site/Meetings/upload/01042007_1.pdf

[citywatch]

This covers mostly the same ground as other stories have done, but the part about the difference in the cost of building hotel rms today compared with 5 yrs ago, & how the city's hotels in DT have lagged what's going on elsewhere are a reminder that keeping MO (momentum) going will be tougher in upcoming months, but that it's also even more important to keep MO on track. That's because if the hood had gained more of a competitive edge several yrs ago, a lot of subsidies today wouldn't be necessary in the first place.


Massive Downtown L.A. Projects Need Special Funding to Fly

Grand Avenue project asking for parking and hotel tax breaks similar to those granted to L.A. Live

By KEELEY WEBSTER
CREJ Staff Writer
JANUARY 2, 2007

If imitation is the sincerest form of flattery, Anschutz Entertainment Group should be feeling pretty good about itself. A funding mechanism created by lawyers representing AEG to enable the L.A. Live convention center hotel to go forward is being co-opted by the developers of downtown Los Angeles' other massive mixed-use project.

The Grand Avenue Authority, a joint city-county committee, approved on Nov. 20 the Related Cos. $2 billion plan for more than 3,000 condominiums with 500 affordable units, 681,000 square feet of office space, 450,000 square feet of retail and 5,000 parking spaces. Meanwhile, Related Cos. is negotiating with the Los Angeles City Council for $40 million in rebates from the transient occupancy tax and the parking tax, much like those set in place for the L.A. Live hotel.

"If the rebates are not forthcoming, the developer has determined that the project is not economically feasible and the result will be voiding the disposition and development agreement and ground leases," according to a report from the Grand Avenue Authority.

This financing method was discussed even as the Grand Avenue Authority approved that agreement and the project's environmental-impact statement. The agreement was scheduled to go before the county Board of Supervisors and the city's Community Redevelopment Agency for approval in the last weeks of December. Related also asked the authority to allow it to delay groundbreaking, originally slated to begin on Dec. 1, 2006, to Oct. 1, 2007.

If the City Council agrees, a community taxing district, the mechanism used by L.A. Live to capture future transient occupancy taxes, would be needed, the report stated.

Working as a consultant for AEG, Lewis Feldman, chair of Goodwin Procter LLP's Los Angeles office, helped craft an ordinance that allows the convention center hotel that is part of L.A. Live to be included in its own taxing district, called a community taxing district, Feldman said. Essentially, the 14 percent transient occupancy tax that the hotel would have paid to the city, once the hotel is operating, will go back to the hotel to help pay construction debt up to $270 million over a 25-year period. The ordinance was approved by the City Council a few months ago, Feldman said.

"The city had few other resources because the redevelopment money was pledged to other project areas," Feldman said of why the taxing district was created. "They couldn't get the money from the convention center because it was running at a deficit. The only thing left was the transient occupancy tax."

It's not uncommon for cities to provide subsidies to build convention center hotels. The 1,000-room property can have hundreds of rooms sitting empty when larger conventions aren't in town, said Ted Fikre, executive vice president and general counsel for AEG. They also require a significant amount of ballroom and meeting space. The project could end up with as much as 70,000 square feet being dedicated to that use, he said.

"Large convention center hotels are uneconomical," Fikre said. "It's no mystery why it took the city of Los Angeles 25 years to be able to develop one. There has always been a recognition since the early days that a convention hotel would require a public subsidy."

The community taxing district was more saleable politically, Fikre said. The idea of using the transient occupancy taxes means that we are not using tax dollars other than those we generate, he added.

"The advantage of doing it this way is the revenues come back to the developer only to the extent that the hotel is successful and generates revenue," said Elizabeth Watson, a land-use attorney with Greenberg Glusker. "[The convention center hotel] has been a particularly difficult hotel to realize. If any project justifies financial assistance to make it viable, it is this one."

AEG, a wholly owned subsidiary of the Anschutz Co. and the developer of L.A. Live, tried to strike deals with several developers to make the hotel happen. When the last one fell through late in 2005, it decided to take on part of the role as developer in joint venture with KB Urban, Fikre said.

KB Urban and AEG announced June 13 an agreement with Marriott International Inc. to open an 876-room Marriott Marquis hotel that will serve as the headquarters hotel of the convention center. Housed in the same building will be a 124-room boutique Ritz-Carlton hotel and 216 private condominiums. The projected cost of the hotel project is now around $800 million, Fikre said, which is $100 million more than when the agreement was announced.

AEG has plans for a dozen restaurants, the 7,100-seat NOKIA Theater, the 2,200-seat Club NOKIA, a 14-screen Regal Cineplex, broadcast facilities for ESPN and office space at the $2.5 billion L.A. Live.

It hasn't been as common in the past for cities to provide rebates or subsidies to develop smaller hotels such as the 275-room hotel that is part of the Grand Avenue project, but Jim Butler, chair of the global hospitality group of Jeffer, Mangels, Butler & Marmaro LLP, said that is changing. "At one time it was limited to convention center hotels, but that is no longer the case," Butler said. "Resorts are even offering economic benefits to get hotels built so tourists will have a place to stay. And, so people will want to come and spend money in their jurisdiction."

He attributes this trend partly to an increase in construction costs. Where it cost $150,000 to $200,000 a key to build a hotel five years ago, it now costs $300,000 to $400,000 per room today. "Hotel prices for rooms have gone up substantially, but they haven't doubled," he said.

Butler described the Grand Avenue project, along with L.A. Live, as something Los Angeles desperately needs as the final critical piece to creating a lifestyle urban village in downtown. "Visitors from foreign countries say that Los Angeles is the hardest place to entertain people from Toyko or London because there is not a city center of critical mass to take people," Butler said. "This would be the final piece to create a center."

Economic Engine

Related is paying $50 million upfront on the 99-year lease of the city-owned property, which stretches from City Hall to Grand Avenue in downtown Los Angeles, in the first phase and a deposit on the land for the second phase. That money will be used to develop the 16-acre park that is part of the project's first phase. In addition to rents paid to the county and the Community Redevelopment Agency, taxes generated by Grand Avenue just from the completion of Phase I, will be $7.5 million annually, according to a report from the Grand Avenue Authority.

When the project is completed, direct and indirect business revenues are expected to increase $615 million per year, 5,900 permanent jobs are expected to be created generating $165 million in salaries, and tax revenues will increase by $109 million per year, according to a report by the Los Angeles Economic Development Corp. completed in November.

If the hotel projects at L.A. Live are successful, Butler could see downtown hotels being able to command room rates closer to that of other major cities rather than the $80 or $100 per night they are now commanding.

The question remains as to whether private developers should be able to get ordinances passed that benefit their projects. Butler says "yes," but on a case-by-case basis. "I think you have to look at the complete balance of benefits," Butler said. "You have to look at whether the benefits received by developers also result in benefits to the city, the community and to taxpayers."

[BrighamYen]

^ Of course it's worth it!

Grand Ave Project or surface parking lot? Thriving place or dead place? Embarrassment or confidence?

Cost of materials going up from here on out to eternity...It's best to get it done now than later. Imagine how expensive construction materials will be 20 years from now. Resources are finite and from my understanding, you can't keep building forever. Unless the scientists out there find how to create new alloy composites that are as strong as steel at an affordable cost, it ain't gonna get any cheaper from here on out. Scary thought actually that entire cities can be halted because of our wasteful capitalistic society with ever growing populations.

[WesTheAngelino]

If the hotel projects at L.A. Live are successful, Butler could see downtown hotels being able to command room rates closer to that of other major cities rather than the $80 or $100 per night they are now commanding.

In other words, the hotels don't need this money to actually be built. They merely want to subsidize themselves. Wow, private businesses looking for ways to make even more money....who would've thunk it???

This is merely following the same pattern that Downtown boosters have tried before and failed at....i.e., don't spend modest amounts on revitalizing neighborhoods or attracting the middle class. Instead, let's build massive, high end oriented projects!!! I would think that most of you guys know something about L.A. history, or at the very least can observe reality in front of your eyes. Case in point, thirty years ago, it was the Music Center and the Bunker Hill towers that would "save" downtown. I'm not saying they shouldn't have been built, however, there should also be efforts to build such things as charter schools, a Target, more transit infrastructure, more trees, better sidewalks, better law enforcement, etc. etc.

And what never ceases to amaze me is how the same people who bristle at any notion that we should subsidize the working class don't bat an eyelash at giving away billions to huge developers.

[LAMetroGuy]

I'm not saying they shouldn't have been built, however, there should also be efforts to build such things as charter schools, a Target, more transit infrastructure, more trees, better sidewalks, better law enforcement, etc. etc.

I wish I could bake a cake filled with rainbows and smiles and everyone would eat and be happy... :haha: :haha: :haha:

Who would you have built those schools, target and trees for? NOBODY lived in downtown LA at the time, everything on bunker hill was bulldozed. I think that the city of LA needs to spend money to make money. You have to stoke the fire and then let it burn on its own! I would love to live in a condo unit in Frank Ghery's five star hotle/condo tower!

And what never ceases to amaze me is how the same people who bristle at any notion that we should subsidize the working class don't bat an eyelash at giving away billions to huge developers.

First, I'm certain the city of LA isn't giving away "billions". Maybe millions??? BIG DIFFERENCE! It really is a drop in the bucket, immaterial! Anyway, I'm not sure who it is you think "bristles" at subsidizing the working class? What subsidies are you referring to?

[WesTheAngelino]

bunker hill was bulldozed.

Exactly my point, duh.

What I'm wishing is not some fanciful thing like you imagine. What's fanciful is the idea that you can sink billions into mega project silver bullets and achieve success without also making huge investments in many smaller things.

[latennisguy]

Exactly my point, duh.

What I'm wishing is not some fanciful thing like you imagine. What's fanciful is the idea that you can sink billions into mega project silver bullets and achieve success without also making huge investments in many smaller things.

:tup: totally agree.

[citywatch]

In other words, the hotels don't need this money to actually be built. They merely want to subsidize themselves. I wish you were corrrect because that would mean DT was like a gold mine, or more like NYC, or a place so popular that ppl from far & wide pile on in, keeping hotel rms filled to the brim. So far, just the opposite has been true.

And the "subsidies" really are nothing more than a deferral or removal of taxes that otherwise wouldn't even be collected if such projs, esp hotels, were never built to begin with.

IOW, would it make sense for ppl to say, yippee!, the city hasn't lost all the taxes it otherwise would be collecting, or hasn't been ripped off due to it handing out subsidizes (by deferring hotel rm taxes) to businesses because it didn't permit hotels to be built on Skid Row or next to the scenic concrete banks of the LA River!

And efforts to turn around hoods like Bunker Hill have been full of false starts for a looong time because, again, most of the $$$ in the city have continued to pour out to places like Century City, or Newport Bch, or even farther away. The hood lost so much of an edge yrs & yrs & yrs ago, that the formula for success has been hard to find ever since then.

Can you imagine large portions of jam packed, multi billion dollar Manhattan or Tokyo or Paris having all the deadzones or gaps that continue to exist on Bunker Hill, inc all the space where the Grand Ave proj was supposed to have started rising on by now?

[LAMetroGuy]

Exactly my point, duh.

What I'm wishing is not some fanciful thing like you imagine. What's fanciful is the idea that you can sink billions into mega project silver bullets and achieve success without also making huge investments in many smaller things.

I think that you're approach is more like... lets not subsidize 1 billion dollars TODAY and hand it to "a few working middle class, fix some roads, and plant some trees". Where as I am saying, lets subsidize 1 billion dollars NOW, and get huge returns in the future so we can turn around more future tax dollar revenues to fix more roads, plant more trees, and help the more deserving middle class families... and at the same time, have a downtown that we can be proud of. ;)

[Wright Concept]

^Well then what about the Bunker Hill redevelopment of the 60's through the 80's? City money was poured into that, where's the ROI on those?

[WesTheAngelino]

I think that you're approach is more like... lets not subsidize 1 billion dollars TODAY and hand it to "a few working middle class, fix some roads, and plant some trees". Where as I am saying, lets subsidize 1 billion dollars NOW, and get huge returns in the future so we can turn around more future tax dollar revenues to fix more roads, plant more trees, and help the more deserving middle class families... and at the same time, have a downtown that we can be proud of. ;)

See, that all sounds well and good, but often the best way to predict the future is the past. The Music Center, Disney Hall, Bunker Hill, and the Convention center were built with the exact same reasoning you are using to justify current subsidies. And you and I both know that those projects are not performing the revenue generation that they were supposed to. In fact, in the case of the convention center we have a white elephant, and in the case of Bunker Hill we have what might be the worst genocide of urban street life ever which now requires yet another mega project to "save" it again.

And I am not saying we need to hand anything to anyone (that is what is in fact going on right now...handing money to Phil Anschutz and the like). I'm talking about common sense here. Think about it. Revitalizing Grand Avenue and building a convention center hotel are not in and of themselves going to make Los Angeles the greatest city on planet earth, nor will the absense of either project doom the rebirth of downtown, far from it in fact. What we have here is nothing more than corporate welfare. We aren't talking about parks, we aren't talking libraries, or schools. We are talking about private enterprises meant for private interests. So, I ask you...if private investors don't think a convention center or another hotel for grand ave. are a good investment, then why on earth should our tax dollars go towards them? Why not invest the money where it really makese business sense, where private investment and individual pioneering have turned the tide for downtown. I'm talking of course about the Old Bank District, South Park, and Seventh Street. More trees, more cops, a school, parks, etc. would make more of an impact than Grand Avenue. A total redo of Pershing Square for $50 million would likely achieve more than the entire grand ave. project.

[LongBeachUrbanist]

We as a city never learn. The best use of public money is on infrastructure. Make the environment so appealing to developers that they need no subsidies. But we are penny wise and pound foolish, and it shows.

Here is what really happens. The City/County refuses to make investments in the area, because "it costs too much". So the area remains a bleak landscape for decades. Then, when the time comes to actually build, the city has to fork out subsidies, because of the city's own neglect. Where is the wisdom in this?

I think the developer is squeezing the County's nuts, knowing that the County doesn't want the deal to collapse. Nice leadership, folks!

At this point, there's not much the County can do but give in. But the fact that it's even in this position incenses me.

For instance, where's the First Street Plan (Project Restore)? This is the plan, agreed to by the city, to beautify First Street from Boyle Heights to Bunker with landscaping etc. Why hasn't that been funded yet? No, there's no money. We'll just wait for several years, then regret and lament that we weren't more forward-thinking.

Same with the park in Chinatown. Gee, I wonder why nobody wants to build and create jobs in the area. The only way things get done is when locals and individuals force the City to do something. That's why that park at least has a little grass now, rather than being the dirt pile it was for decades.

[cookiejarvis]

Why not invest the money where it really makese business sense, where private investment and individual pioneering have turned the tide for downtown. I'm talking of course about the Old Bank District, South Park, and Seventh Street. More trees, more cops, a school, parks, etc. would make more of an impact than Grand Avenue. A total redo of Pershing Square for $50 million would likely achieve more than the entire grand ave. project.

We definitely don't need more schools right now, especially in the downtown area. Seems like the LAUSD has built enough classroom space for the next 30 years.

[Wright Concept]

Economic Engine

Related is paying $50 million upfront on the 99-year lease of the city-owned property, which stretches from City Hall to Grand Avenue in downtown Los Angeles, in the first phase and a deposit on the land for the second phase. That money will be used to develop the 16-acre park that is part of the project's first phase. In addition to rents paid to the county and the Community Redevelopment Agency, taxes generated by Grand Avenue just from the completion of Phase I, will be $7.5 million annually, according to a report from the Grand Avenue Authority.

This little $50 million dollar down payment on the park is what's giving Related the advantage here because they're making an upfront payment on it where they'll have to stay or else.

I said this from the beginning back when I first posted on here. Damn, I need to set up a psychic hotline. LOL

[WesTheAngelino]

We definitely don't need more schools right now, especially in the downtown area. Seems like the LAUSD has built enough classroom space for the next 30 years.

Is one of the ones near DT a magnet or charter school? If not, then that is what I'm talking about---a school where new residents will actually considerer sending their kids to.

[Wright Concept]

Is one of the ones near DT a magnet or charter school? If not, then that is what I'm talking about---a school where new residents will actually considerer sending their kids to.


Around Lucas Avenue the schools they are proposing are either Charters or Magnets. I think there's only one regular schools at Wilshire/Union, because those sites will have windows in their classrooms rather than the trailer-trash corrugated siding and tiny little windows.

[LAMetroGuy]

^Well then what about the Bunker Hill redevelopment of the 60's through the 80's? City money was poured into that, where's the ROI on those?

Are you implying that none of those projects built on bunker hill (developed from the 60's through the 80's) are not providing more tax revenue than what was there prior? I'm certain that Cal Plaza 2 alone is generating bucu bucks for the city, just add wells fargo tower, KPMG, BofA, Walt Disney Concert Hall, Dorthy C., Cal Plaza 1, etc. and we are talking mucho dinero! I'm sure there is a healthy ROI, I am just not privy to that type of information.

[RAlossi]

At this point, I think the Grand Avenue Plan should either receive no subsidies or let Related pull out of it. It's like the Coliseum/NFL -- I've had just about enough.

If the county acquiesces to the tax subsidies, that will set off a chain reaction (we're already seeing it) for other developers to do the same thing.

Related is whining because the return on its investment will only approach 7% instead of 10+% (As far as I can tell from the document).

It might be best for the county to secure the land outright again, then sell small parcels off to developers to create their own skyscrapers -- so you'd have a number of different projects rather than one massive one. Each developer can pay a fee for the infrastructure improvements -- pedestrian, sewer, trees, etc -- which may end up working more to the city/county's advantage anyway. So instead of one megaproject you'd have several very large projects that could create a better "urban" environment.

The more I think of it, the more I feel that this is the best way to go. The sale or long-term lease of the parcels can include design standards to enable the urban environment to flourish (I'm thinking setback requirements removed [requiring street-fronting buildings], public space, etc). As a personal opinion, the block bounded by First, Grand, Olive, and Second can fit more skyscrapers (maybe six, seven, or even eight towers -- very possible if the parcel is broken up and leased to more than one developer) than what the original Project proposed http://www.grandavenuecommittee.org/images/model_large.jpg . If they're closer together, and less suburban mall-like, that could be a really great thing for the block.

I was in favor of tax subsidies for LA Live, but I'm not for Grand Avenue.

[Wright Concept]

Are you implying that none of those projects built on bunker hill (developed from the 60's through the 80's) are not providing more tax revenue than what was there prior? I'm certain that Cal Plaza 2 alone is generating bucu bucks for the city, just add wells fargo tower, KPMG, BofA, Walt Disney Concert Hall, Dorthy C., Cal Plaza 1, etc. and we are talking mucho dinero! I'm sure there is a healthy ROI, I am just not privy to that type of information.


If that's the case how come they're not building more off these type of developments? Let's not forget 505 Flower, 707 Wilshire and The Bonaventure Hotel, who recently whinned until he got his subsidy. True, a tax base of bulldozed land was formed, but a lot more could have better set if the land was left to better housing to replace what was there, rather than creating an Modernist Acropolis.

[Wright Concept]

At this point, I think the Grand Avenue Plan should either receive no subsidies or let Related pull out of it. It's like the Coliseum/NFL -- I've had just about enough.

If the county acquiesces to the tax subsidies, that will set off a chain reaction (we're already seeing it) for other developers to do the same thing.

Related is whining because the return on its investment will only approach 7% instead of 10+% (As far as I can tell from the document).

It might be best for the county to secure the land outright again, then sell small parcels off to developers to create their own skyscrapers -- so you'd have a number of different projects rather than one massive one. Each developer can pay a fee for the infrastructure improvements -- pedestrian, sewer, trees, etc -- which may end up working more to the city/county's advantage anyway. So instead of one megaproject you'd have several very large projects that could create a better "urban" environment.

The more I think of it, the more I feel that this is the best way to go. The sale or long-term lease of the parcels can include design standards to enable the urban environment to flourish (I'm thinking setback requirements removed [requiring street-fronting buildings], public space, etc). As a personal opinion, the block bounded by First, Grand, Olive, and Second can fit more skyscrapers (maybe six, seven, or even eight towers -- very possible if the parcel is broken up and leased to more than one developer) than what the original Project proposed http://www.grandavenuecommittee.org/images/model_large.jpg . If they're closer together, and less suburban mall-like, that could be a really great thing for the block.

I was in favor of tax subsidies for LA Live, but I'm not for Grand Avenue.

How tall were you seeing these added towers being? Because the lot itself may squeeze in 5 or 6 towers in a bundled tubes/blocks ala The Bonaventure Hotel.

The other thing that is mudding the waters here is that $50M down payment on that park. Related has a bargaining chip with whoever is involved because of that down-payment. I would have just sold the land to Related for their Development which would have been more than $50 M and directly generate that back to the park which would have meant a true park with the demolished building(s) from Grand to Spring Street.

[LAMetroGuy]

See, that all sounds well and good, but often the best way to predict the future is the past.

Some would argue that you could also learn from the past.

And you and I both know that those projects are not performing the revenue generation that they were supposed to.

I don't know this, do you? Please, support your claim. Cal Plaza, Wells Fargo, KPMG, Disney, etc.. provide a nice income stream to the city.

In fact, in the case of the convention center we have a white elephant

That is why you see the likes of South Group development, LA Live, LA Central, Hanover, and Jardin.


More trees, more cops, a school, parks, etc. would make more of an impact than Grand Avenue. A total redo of Pershing Square for $50 million would likely achieve more than the entire grand ave. project.

In the current state, if you build more schools... who will go to them? In the current state, if you build more parks, they will just become another Tent City. Hiring more cops just to patrol a lifeless city of downtown? No thanks, I would prefer the city make a minor immaterial investment that will reap huge benefits. You ask "if private investors don't think a convention center or another hotel for grand ave. are a good investment, then why on earth should our tax dollars go towards them", my answer: Because the small amount of money the city is paying will eventually generate more income in the future that can be used to fund more of the social services you are talking about. I agree, in the past mistakes were made, but not all things are still equal. We are in a different time, with different economic forces tugging at downtown in a way that has never been sceen before. Housing boom, the arts, renovated historic theaters, multiple billion dollar projects, metro, new technologies, new retail, dining, trendy bars, adaptive reuse, etc. To keep the status quo is foolish, we have an excellent opportunity and I'm glad the investments are being made. :cool:

[LAMetroGuy]

If that's the case how come they're not building more off these type of developments? Let's not forget 505 Flower, 707 Wilshire and The Bonaventure Hotel, who recently whinned until he got his subsidy. True, a tax base of bulldozed land was formed, but a lot more could have better set if the land was left to better housing to replace what was there, rather than creating an Modernist Acropolis.

The reason why we are not building more commercial buildings is different than the original question asking about the ROI on the existing buildings.

[Wright Concept]

The reason why we are not building more commercial buildings is different than the original question asking about the ROI on the existing buildings.

You're right it is different. But the intent is the same, if the ROI is so good why aren't there more Office/Commercial buildings in Downtown being built privately. Because if a building type has a decent ROI, then there will be more of them for the case of the Office/commerical buildings, you've lumped in the Music Center to the picture which is a special case. If the tax revenue is from parking rather than a building it also begs to ask the question, why not develop more parking structures.

Here's the other question if the ROI is so good how come streetlights surrounding downtown are barely lit or LA can barely piece funds together to install cameras or have police on the beat at those busy pedestrian points?

[WesTheAngelino]

LAMetro:

It is YOU who seem to support the status quo, not I. The status quo for Los Angeles seems to be making foolish investments in mega-projects which have nothing going for them but image all the while ignoring simple things that simply make cities better. Notice I said A school, i.e. one that caters to upper middle class residents as well as your typical LAUSD parent. Apparently, as mentioned after I brought that up there will in fact be a magnet school, so at least something is going right.

But since when are parks, trees, cops, etc. "social services"? I usually put those in the category as fundamental infrastructural necessities that a city needs in order to function.

And cops patrolling dead streets? What are you talking about? I know what I'm talking about: making all those yuppy dog walkers feel safer. Letting visitors see a police presence (that did wonders for Times Square by the way) will go a long way toward making downtown a DESTINATION.

Speaking of making downtown a destination.....I live downtown. Ask me the last time I went to Bunker Hill? I don't go there. Know why? BECAUSE IT IS ONE OF THE WORST LOCATIONS IN THE CITY. Fortress L.A. is fine n dandy if you are a corporate suit. In fact, it suits (no pun intended) the needs of an office park extremely well. But as far as going there for a stroll or shopping? I woudln't do it. And I can guarandamntee you the kind of people Grand Ave. is geared towards (Westsiders) are not going to just GO because it's there. Why would they when they can enjoy the Grove or Third Street without fighting cross town traffic? Not to mention beaches, etc. I know, I know I sound like Kotkin here....but even that loon sweats out a grain of truth on occassion.

Am I to take your comment regarding the convention center to mean that you think that those developments have something to do with it? If so......c'mon. With the exception of the convention center hotel itself, you don't honestly believe that the convention center adds any selling points to new projects, do you? You can halfway make that case for Staples Center. I'm sure there are Lakers/Clippers/Kings/Cher fans who enjoy the walking distance to their fave event. But I can assure you, there is not one idiot who bought a condo at Elleven who thought to himself, "Omigod....I must buy this! Now I can finally realize my dream of being able to walk from my apartment to L.A. Erotica 2006!!!!" The thing is a monstrosity. it adds nothing to the street around it and takes everything away. I know what I'm about to say is a cardinal sin here, but the thing really belongs in Century City or the Wilshire Corridor. It would be closer to LAX and have a lot more selling points than it does now. And how's this for an idea: tear the goddamn thing down and build a baseball stadium! Now how awesome would that be.

Lastly I never claimed that Cal Plaza et al were not collecting revenue. I was merely pointing out that the city spent millions and millions in the past on something that doesn't do what it was advertised to do, and we essentially embarking on the same fools errand by spending these current subsidies. Chemical plants and swap meats also contribute revenue, but you don't see anyone claiming they are a silver bullet either.

[colemonkee]

^ What about chemical plants that are also swap meets?

Sorry, someone had to lighten this up a bit...

[LAMetroGuy]

It is YOU who seem to support the status quo, not I. The status quo for Los Angeles seems to be making foolish investments in mega-projects which have nothing going for them but image all the while ignoring simple things that simply make cities better.

You are all about immediate gratification and I'm more a visionary who sees the benefits of delayed gratification. :tup:

What do you have against yuppies? Just "dog walkers" will suffice.

"Am I to take your comment regarding the convention center to mean that you think that those developments have something to do with it?" No, I meant that there is development around it so the hood is moving along just nicely, in light of the big eyesore.

Yes, Bunker Hill is a fortress, but that is because there is nothing connecting it to the rest of downtown. These and future projects will do that.

"I sound like Kotkin" yes you do and that’s the problem! Next topic please! :runaway:

[LAMetroGuy]

You're right it is different. But the intent is the same, if the ROI is so good why aren't there more Office/Commercial buildings in Downtown being built privately. Because if a building type has a decent ROI, then there will be more of them for the case of the Office/commerical buildings, you've lumped in the Music Center to the picture which is a special case. If the tax revenue is from parking rather than a building it also begs to ask the question, why not develop more parking structures.

Here's the other question if the ROI is so good how come streetlights surrounding downtown are barely lit or LA can barely piece funds together to install cameras or have police on the beat at those busy pedestrian points?

Patience my young Padawan! Good things come to those who wait!

http://www.cpnonline.com/cpn/article_display.jsp?vnu_content_id=1003529565

Q&A: Job Growth, Booming International Trade Strengthens Los Angeles Office Market
January 09, 2007

Steady job growth and growing international trade between the United States and the Pacific Rim are two major factors that have led to improving office fundamentals in Los Angeles, according to the recently released University of Southern California Lusk Center Casden Real Estate Economics Forecast.

Delores Conway (pictured), director of the Casden Real Estate Economics Forecast, talked about the findings of the survey, and shared some thoughts on the Los Angeles office market with CPN Senior Editor Eugene Gilligan

CPN: How would you characterize the Los Angeles office market today?

Conway: We're seeing strong leasing and sales activity. For instance, rents increased 15 percent in West Los Angeles as of the third quarter of 2006, compared to the same period in 2005, and are now at $3.22 per square foot per month. Vacancy there is now at 7 percent in 2006, compared to 10 percent in the same period in 2005.

The vacancy rate in Los Angeles County is now below 10 percent, the lowest level in 15 years. We have seen some office space being converted to residential properties. One sign of strength can be seen in 20000 Avenue of the Stars, a $275 million office building that was recently completed in Century City. Seventy percent of the space has already been leased.

We've also seen Downtown office vacancy fall. As of the third quarter of 2006, it was 14.3 percent. The news there is that Maguire Properties announced they would build a large office building there, the first Downtown office project in 15 years.

CPN: What were the key factors in the improved performance?

Conway: We're seeing a lot of leasing activity from entertainment companies and professional business services companies. Overall, businesses are doing better, and are now making capital investments and hiring. So, office leasing has improved.

CPN: What do you see on the horizon for 2007?

Conway: I believe we're going to see continued rent increases for office space, and we should see that across Southern California. Rent increases should be particularly strong in West Los Angeles.

[WesTheAngelino]

^ I thought the general consensus was that the McGuire proposal was just a ploy to get more money for their property that they are looking to sell.


I'm not for "immediate gratification" and you, sir, are no visionary. I'm for three things in this situation: pragmatism, common sense, and REWARDING THOSE WHO HAVE ALREADY SUCCEEDED. The first two, I think should be obvious. Making the whole of downtown safer, cleaner, more inviting, and more aesthetically pleasing as well as walkable will go a lot longer than some isolated mega project. What I mean by the third is this: what kind of message is the city sending to people like Tom Gilmore and true urban pioneers, true venture capitalists by bending over in the shower for people who just can't get it done like Phil Anschutz? People like Gilmore are providing products and services that people actually want, not selling snake oil. Here's a novel idea: let's make it easier for them to continue to do this!!!! More transit and car sharing options would help reduce their need (and thus cost) for providing parking, more cops means less money for private security, more trees and parks coupled with the increased mobility and safety = an area with many selling points. I'm the one talking about the future here---you are the one stuck in the ideas of the past.

[LAMetroGuy]

Life isn't fair. Get over your "woe is me" rhetoric over dealings between developers and politicians. If these dealings upset you so much... maybe you're not cut out for your chosen career path. Besides, I know I'm not stuck in the past, you're the one who keeps on with inexorable conclusions with anything that smells of corporate benefits. Anyway, I'm sure you'll continue with your consecrated attitude.

[colemonkee]

^ I thought the general consensus was that the McGuire proposal was just a ploy to get more money for their property that they are looking to sell.
Actually, the rumor was that it was a proposal to bolster the value of the entire company, which was rumored to be up for sale. Since that has not happened, and conditions for office construction continue to improve, the growing consensus is that it may be a serious project.

What I mean by the third is this: what kind of message is the city sending to people like Tom Gilmore and true urban pioneers, true venture capitalists by bending over in the shower for people who just can't get it done like Phil Anschutz?
I see what you're saying, but Anschutz isn't the best example here. Technically he was one of the first pioneers in this latest building boom - building the Staples Center - which spawned one of the first downtown for-sale condo conversions (Flower St. Lofts) and the current boom we're seeing in South Park. So technically, they are giving something back to one of the "successful" pioneers.

In the case of the subsidies for the hotel in the Grand Ave. project, one has to look at the property tax revenue the market rate condos would generate over the years that the bed taxes could be waived. If the sum of the property tax revenues and county retail sales tax revenues over that same period is greater than the sum of the parking taxes currently generated by the site and the bed taxes subsidized by the city - say by a margin of 20% or more, it makes financial sense for the city to subsidize the bed taxes. That net increase of 20% or more could then fund some of the basic services you mention - schools, police presence, parks (which the project has a pretty large one), street improvements, etc. And it could do so starting with year one, without unnecessary delays.

If I were running this, I would stipulate that the city and county assess the costs vs. revenues and put it in writing that the project must result in a minimum "x" percent net revenue to the city and that the resulting funds be spent on specific improvements and services in the downtown area. If the project, at any time, does not make that "x" percent minimum net gain, then the hotel bed taxes would be levied to cover the difference, plus interest, until the project nets out again per the agreement.

That way the city benefits along with the developer. If the developer can't agree to something of this nature, then the project is truly not feasible, and shouldn't be built at all.

[bobcat]

I see what you're saying, but Anschutz isn't the best example here. Technically he was one of the first pioneers in this latest building boom - building the Staples Center - which spawned one of the first downtown for-sale condo conversions (Flower St. Lofts) and the current boom we're seeing in South Park. So technically, they are giving something back to one of the "successful" pioneers.


Also, LA Live isn't a good example because it was the city that wanted the convention center hotel in the first place and including it was part of the original agreement with the developer. AEG was willing to go ahead with the project sans hotel, and the only reason they included it was that it was understood the city would help with subsidies. There was no such stipulation with Related regarding Grand Ave and it was up to them to develop a feasible project. Among other things nobody asked them to include a 5 star hotel and nobody asked them to have Frank Gehry design it. And quite frankly, I have doubts that DTLA can even support a 2nd 5 star hotel for a number of years. Hell, downtown SD is years ahead of DTLA and they still don't even have one 5 star hotel yet.

[Wright Concept]

Actually, the rumor was that it was a proposal to bolster the value of the entire company, which was rumored to be up for sale. Since that has not happened, and conditions for office construction continue to improve, the growing consensus is that it may be a serious project.


I see what you're saying, but Anschutz isn't the best example here. Technically he was one of the first pioneers in this latest building boom - building the Staples Center - which spawned one of the first downtown for-sale condo conversions (Flower St. Lofts) and the current boom we're seeing in South Park. So technically, they are giving something back to one of the "successful" pioneers.

In the case of the subsidies for the hotel in the Grand Ave. project, one has to look at the property tax revenue the market rate condos would generate over the years that the bed taxes could be waived. If the sum of the property tax revenues and county retail sales tax revenues over that same period is greater than the sum of the parking taxes currently generated by the site and the bed taxes subsidized by the city - say by a margin of 20% or more, it makes financial sense for the city to subsidize the bed taxes. That net increase of 20% or more could then fund some of the basic services you mention - schools, police presence, parks (which the project has a pretty large one), street improvements, etc. And it could do so starting with year one, without unnecessary delays.
At the same time, these were going to be "affordable housing" in 20% of Phase 1. So this might skew the numbers a little more.


If I were running this, I would stipulate that the city and county assess the costs vs. revenues and put it in writing that the project must result in a minimum "x" percent net revenue to the city and that the resulting funds be spent on specific improvements and services in the downtown area. If the project, at any time, does not make that "x" percent minimum net gain, then the hotel bed taxes would be levied to cover the difference, plus interest, until the project nets out again per the agreement.

That way the city benefits along with the developer. If the developer can't agree to something of this nature, then the project is truly not feasible, and shouldn't be built at all.

That's an interesting idea Cole, the one thing I'd wonder is what if the hotel goes under, would it then go under City/county control? The developer/business could easily re-nig and back out of the deal leaving the city/county to hold the bag if that percentage is too high. If the percentage is too low, then a lower subsidy to almost zero subsidy would be needed. My gripe with the process is that they're doing this backdoor rather than being up front about it. But then again a five star hotel was added to their scope, where this tower could have just been the ultra-luxury residence with a ground floor retail base.

[WesTheAngelino]

Life isn't fair. Get over your "woe is me" rhetoric over dealings between developers and politicians. If these dealings upset you so much... maybe you're not cut out for your chosen career path. Besides, I know I'm not stuck in the past, you're the one who keeps on with inexorable conclusions with anything that smells of corporate benefits. Anyway, I'm sure you'll continue with your consecrated attitude.

So, if someone disagrees with you, then they're whiners. I see. We aren't talking about philosophy here, we're talking concrete realities. I can see you are the type of person who, when faced with an actual argument, will simply demean the person making and start arguing philosophy rather than the true subject at hand. Not that I didn't know that about you already. I totally agree that what you are saying is true....on paper. My POINT, which you seem to be ignoring intentionally, because even Citywatch isn't that dense, is that WE HAVE BEEN DOWN THIS ROAD BEFORE AND WHAT LOOKS GOOD ON PAPER OFTEN DOESN'T WORK IN REALITY. If the past is any indication, Grand Ave. will not solve downtowns myriad problems. It's not going to solve parking, it's not going to solve crime, it's not going to clean up skid row, it's not going to attract middle class families (the bread and butter of any healthy retail district....you think all the folks at the Grove live in Park La Brea or the ones at Third Street all live in SM??? far from it). I'm not saying it shouldn't be built....but from what I've read on the project, it looks like old hat mega project bullshit.

I'll ask you another question: where is the connectivity with the rest of downtown? I simply don't see it. There is no plans for the DT connector with a Bunker Hill stop, no plans to fund the Angels Flight and perhaps a new funicular or two. I wish the project no ill will, but it's certainly nothing to have a wet dream over either.

CM: Yeah, I really didn't mean to pick on Anschutz that much, just the most prominent name I had in my head at the time. You make good point about his pioneering and success with Staples, but was that project also funded with some city money or no?

And you are completely right that if other revenues offset the bedroom taxes, then it is a sound investment....and you are also right that the money should be yanked if this doesnt hold true. However, there is no such oversight! The City is acting like some sort of hostage in this situation and not preparing for the worst.

[colemonkee]

At the same time, these were going to be "affordable housing" in 20% of Phase 1. So this might skew the numbers a little more.
Mentally I took that into account, but even a $200K affordable housing unit brings in approximately $2,400/year in property taxes, unless they're somehow subsidized (I'll admit I'm not the expert in that category). But the market rate units in the Gehry tower will most likely start at $700K and go upwards of $5 - $10MM for the penthouses, which will generate the lion's share of property tax revenue for the site.

Of course, this is all hypothetical. The numbers would - and should - be run. And a reasonable threshold for net gain would have to be set for this to work.

That's an interesting idea Cole, the one thing I'd wonder is what if the hotel goes under, would it then go under City/county control? The developer/business could easily re-nig and back out of the deal leaving the city/county to hold the bag if that percentage is too high. If the percentage is too low, then a lower subsidy to almost zero subsidy would be needed. My gripe with the process is that they're doing this backdoor rather than being up front about it. But then again a five star hotel was added to their scope, where this tower could have just been the ultra-luxury residence with a ground floor retail base.
The idea behind this idea (:sly:) was to pre-qualify the developer's intention to make this work as a condition of offering the subsidy in the first place. A way to avoid the developer or hotel operator leaving the city high and dry halfway through would be to apply additional penalties for cancelling once the agreement has been signed and work started (for the developer) or for closing prior to the period of the bed tax subsidy (for the hotel operator). These conditions would have to be agreed to by the developer and the hotel operator before the city would approve the subsidy. If the developer agrees, it signals that they have full confidence the subsidies will actually make the project pencil out. If the developer says no, the project goes nowhere and the city and the taxpayers avoid a financial fiasco.

Of course, this is a best case scenario in my mind, and it won't happen this way.

[citywatch]

The Music Center, Disney Hall, Bunker Hill, and the Convention center were built with the exact same reasoning you are using to justify current subsidies. And you and I both know that those projects are not performing the revenue generation that they were supposed to. In fact, in the case of the convention center we have a white elephant, and in the case of Bunker Hill we have what might be the worst genocide of urban street life ever which now requires yet another mega project to "save" it again. Those projs, built way back when, & more recently, have been like giving a small bottle of water & a cracker to a severely dehydrated, malnourished person. Even with all the improvements over the past 5 or so yrs, it's still easy to go to DT & think "is that it?!" Is that all there is?? Is this the best the city can do??"

The main reason the owner of the Bonaventure made such a big ruckus last yr about the devlpt of LA Live is because his own hotel hasn't been performing that well. And his competitors haven't exactly been rolling in dough either. Whenever surveys of hotels in LA have been published, they've always shown the ones in DT being among the least popular in SoCA, with nightly rental rates to match.

And all the largely abandoned bldgs on Broadway & Spring? They're the original "white elephant" of the hood. And in some ways even newer office highrises, like the City National pl (formerly the Arco Towers) have become white elephants in their own right. After all, a leasing agent was quoted several months ago as saying that he's still not seeing businesses relocating from other parts of LA, esp hoods like Century City, to DT.

LA, esp DT, already is viewed quite skeptically by many ppl, inc business owners, because it has some of the highest tax rates in LA county. Throw in additional problems of homelessness, blight, crime, traffic, & many ppl's continuing preference for stress free burban lives, & in some ways it's a miracle hoods like DT aren't in even worst shape.

One more thing: NYC has been giving away huge tax subsidies for yrs & yrs to keep corporations from leaving Manhattan. Now if you want to make a argument about the abuses of special deals between city govt & businesses, THAT would be one place to start. That's because the Big apple, unlike DTLA, never lost a lot of its appeal & economic punch to begin with. LA, OTOH, has been a lot more like a Cleveland or Detroit than a manhattan or even DT seattle.

[citywatch]

But I can assure you, there is not one idiot who bought a condo at Elleven who thought to himself, "Omigod....I must buy this! Now I can finally realize my dream of being able to walk from my apartment to L.A. Erotica 2006!!!!"
But I bet if much of the blight that used to sit where both Staples & the convention ctr, either the original bldg from the early 1970s or the add on from the early 1990s, still was there, the hood would be a much tougher sell. Even today, with all the new devlpt & various clean up efforts, around those 2 sites or throughout DT overall, there still is a sense of gaps & deadzones galore. A hood where many ppl will still want to thumb their nose at it & say "I'd rather be somewhere else, perhaps a town like SF, Chicago or Vegas!"

[WesTheAngelino]

[/b]
But I bet if much of the blight that used to sit where both Staples & the convention ctr, either the original bldg from the early 1970s or the add on from the early 1990s, still was there, the hood would be a much tougher sell. Even today, with all the new devlpt & various clean up efforts, around those 2 sites or throughout DT overall, there still is a sense of gaps & deadzones galore. A hood where many ppl will still want to thumb their nose at it & say "I'd rather be somewhere else, perhaps a town like SF, Chicago or Vegas!"

How do you come to that conclusion? I.e. that it would be a much tougher sell? The simple fact that people are willing to shell out 300,000 and way upwards for lofts in buildings which are either in severely "blighted" areas (re: Pershing Square) or literally a couple blocks from skid row itself kind of shows that we have reached such a housing crisis and such a demand for "urban" living (whatever that means) that people, people with money especially, are willing to take what appears on the surface to be a big risk. I will give some credit to Staples for attracting residents to the hood, but none to the Convention Center.

[WesTheAngelino]

[/b]Those projs, built way back when, & more recently, have been like giving a small bottle of water & a cracker to a severely dehydrated, malnourished person. Even with all the improvements over the past 5 or so yrs, it's still easy to go to DT & think "is that it?!" Is that all there is?? Is this the best the city can do??"

The main reason the owner of the Bonaventure made such a big ruckus last yr about the devlpt of LA Live is because his own hotel hasn't been performing that well. And his competitors haven't exactly been rolling in dough either. Whenever surveys of hotels in LA have been published, they've always shown the ones in DT being among the least popular in SoCA, with nightly rental rates to match.

And all the largely abandoned bldgs on Broadway & Spring? They're the original "white elephant" of the hood. And in some ways even newer office highrises, like the City National pl (formerly the Arco Towers) have become white elephants in their own right. After all, a leasing agent was quoted several months ago as saying that he's still not seeing businesses relocating from other parts of LA, esp hoods like Century City, to DT.

LA, esp DT, already is viewed quite skeptically by many ppl, inc business owners, because it has some of the highest tax rates in LA county. Throw in additional problems of homelessness, blight, crime, traffic, & many ppl's continuing preference for stress free burban lives, & in some ways it's a miracle hoods like DT aren't in even worst shape.

One more thing: NYC has been giving away huge tax subsidies for yrs & yrs to keep corporations from leaving Manhattan. Now if you want to make a argument about the abuses of special deals between city govt & businesses, THAT would be one place to start. That's because the Big apple, unlike DTLA, never lost a lot of its appeal & economic punch to begin with. LA, OTOH, has been a lot more like a Cleveland or Detroit than a manhattan or even DT seattle.



1. Actually the projects in question were like taking someone who needed proactive acne solution and chopping off their head. Instead of attempting to revive the communities of Bunker Hill and Crown Hill (which rarely gets any mention) city leaders instead chose to simply bulldoze them into oblivion and replace them with a cold, out of human scale development. What a waste. There are plenty of worse neighborhoods in the USA that have been reborn. And, hey, you're always going on and on about deadzones......wouldn't it have been better to keep those neighborhoods intact and instead of having one cluster of commercial towers have them spread out over downtown, thereby replacing more parking lots? Hmmm? Hmm?

2. You're right about the Bonaventure guy and his reasons for griping. But do you really, honestly believe that Grand Ave. is going to make the City into the premiere destination that it is touted? I doubt it. We need to do more to encourage downtown as a natural hub. This means more infrastructure. Transit, especially. But also, it should be a place to go for people who live in East L.A., South Central, and yes, the West Side. What this means is encouraging a healthy mix of retail, the kind of retail that is more often than not redlined out of neighborhoods south, east, north, and west of downtown. I'm talking Target, Borders, American Eagle, Trader Joe's, dare I say it.....Applebee's.

3. I think you misunderstand the term white elephant. It doesn't just mean something crumby in a neighborhood. It means something large, totally screwed up, and ultimately something no one knows what to do with. Fortunately, the buildings in the OBD had many redeeming qualities, the city created ordinances to allow people with fresh ideas to use them (Gilmore et al), and now they have begun to serve an entirely new function. The Convention Center on the other hand is like a bastard child on life support. It contributes nothing to, in fact takes away from, city coffers, will STILL have trouble attracting conventions even after the LA Live and Hotel construction is completed, and even if it does begin to break even, will be in need of some serious restructuring in order to bring it up to speed with the neighborhood and more importantly to NOT impede South Park's progress (i.e. making it possible to actually walk along the west side of Fig without having to walk under the Con Center!!! and How bout some freakin' trees!!!!).

4. You seem unaware that NYC has been in direct competition with New Jersey, Westchester County, and Long Island for quite some time now, and that they have lost considerable ground in that battle. Ergo, some subsidies have been justified, others not so much. Howeve, NYC has a lot more to offer than subsidies. One big reason, I would argue even more than subsidies, is the quality of life in NYC. If you are attracting employees, the selling points of not having to pay for an automobile, endless cultural, dining, and partying opportunities, etc. are a big help. So, would L.A. not be smart to attempt to create the same quality of life in its core? Duh. Otherwise, you get the kind of thing you are endlessly complaining about: something like the Beverly Center surrounded by powerlines.

[citywatch]

I will give some credit to Staples for attracting residents to the hood, but none to the Convention Center.A hood, in order to be truly successful, can't rely on just ONE thing, it has to rely on many things. So it's not just crucial that DT have alot of residents, it also has to attract alot of visitors, inc ppl who attend events at the convention ctr or stay at nearby hotels.

And it's chicken or egg, because without large meetings housed at the convention ctr, many of the hotels in the hood would be hurting even more to keep their rms occupied. And those businesses certainly can't rely upon DT's natural beauty or charms to lure ppl from far & wide. Most of those ppl will instead want to book hotel rms in SaMo, or BevHills, or even farther away in SoCa.

[WesTheAngelino]

^ Wasn't referring to downtown overall. I will agree that conventioneers have SOME positive impact. I was referring to the immediate hood, South Park, which I think would've happened regardless of the CC

[citywatch]

1. Actually the projects in question were like taking someone who needed proactive acne solution and chopping off their head. I'm not old enough to have driven or walked through Bunker Hill before it was torn down, but based on old photos it didn't look much better than some hood in a rinky dink Midwestern town, full of rickety clapboard bldgs. Variations of that still can be seen farther west, around Crown hill, or north of Chavez blvd, near Fig St.

A version of that, bordered by Fig, Chavez Blvd & the Hollywood fwy, was torn down just in the past 2 yrs to make way for the 2nd phase of the Orsini apt bldg.

Speaking of which, I drove around there a few wks ago, & even with the new apt bldg west of Fig on Chavez, & new construction east of Fig, where Orsini II is going up, I was struck by how incomplete & unimpressive the feeling of that hood in general still is. But I then recalled what it once was like, or when the shabbiness still visible north of Chavez Bl dominated the entire location, & I thought, oh, lawd, it never should have been that bad to begin with.


But do you really, honestly believe that Grand Ave. is going to make the City into the premiere destination that it is touted?
It's just one of many things the hood desperately needs. I'd be the last to say the Grand Ave proj will be the salvation of the hood, just as I'd be the last to say that Rockefeller Ctr, all by itself, is the salvation of NYC.


It means something large, totally screwed up, and ultimately something no one knows what to do with. Fortunately, the buildings in the OBD had many redeeming qualities, the city created ordinances to allow people with fresh ideas to use them (Gilmore et al), and now they have begun to serve an entirely new function. The Convention Center on the other hand is like a bastard child on life support. It contributes nothing toThe bldgs on Broadway or Spring St are large, (& currently) mostly "screwed up" & properties that no one knows what to do with.

The owner of the Opheum Theater & lofts said last yr that the number of old bldgs in the OBD that are ideal for conversion has been tapped out. So that & prob finite demand for such (generally funky) loft housing means what? That we should label all the old bldgs of the OBD a "bastard child on life support"? I hope not. They do contribute something, just as the convention ctr is the only space in LA large enough to house certain meetings & events.


You seem unaware that NYC has been in direct competition with New Jersey, Westchester County, and Long Island for quite some time now, and that they have lost considerable ground in that battle.Manhattan hasn't lost as much to the burbs as DTLA has lost to the burbs. In fact, the heart of NYC is one of the few urban hoods in the US that still can be defined as being very competitive with other places, inc burban ones (ex: NYC has more businesses in its office towers than in all of the lowrises or midrises of OC, or Century City, or the SF Valley).

[colemonkee]

:tup: Well, we have an answer on the hotel...


Grand Avenue Project Gets Hotel
By DANIEL MILLER
Los Angeles Business Journal Staff

A key element of the Grand Avenue redevelopment project was secured Thursday when developer Related Cos. announced it will bring a five-star hotel to the $1.8 billion mixed-use project.

The Mandarin Oriental Hotel Group has agreed to build a 275-room Mandarin Oriental hotel that is scheduled to open in summer 2010. It would occupy the first 20 floors of a 48-story, Frank Gehry-designed tower that would be topped by condominiums.

Bill Witte, president of Related of California, said that the hotel is important to the development adjacent to the Walt Disney Concert Hall, because it will be a 24-hour destination.

“It will include a number of restaurants, a pool bar and terrace that will be available to the larger public,” said Witte. Plans are to begin demolition of an existing parking lot at the hotel site this fall.

The announcement appears to indicate that Related is making progress in moving forward with the Grand Avenue project. It also comes just a month before the company will make its case in front of the City Council for a $40 million subsidy in the form of a rebate on the city’s parking and hotel bed taxes.

“We felt it was important to let them know in advance of what they were getting if they were to approve the request,” Witte said.

The Mandarin Oriental Hotel Group has properties at Time Warner Center in N.Y. and other high-end locations in Miami, San Francisco and Washington D.C.

[Steve2726]

Wow, this is big news and might be the jolt necessary to get this project off life support. It looks like the floor count is up from 47 to 48. I wonder if they still are planning on 600 ft tall.

[bobcat]

I knew it. Mandarin Oriental is just obviously the choice for a hotel for "Time Warner Center West." The only probably is that I really have doubts that DTLA can support a second 5 star hotel within the next 5 years, but maybe Related is offering them incentives for the first few years as it's an important element in their project.

[bjornson]

LAB, celebrate! Mandarin Oriental is coming to L.A.!

[LAMetroGuy]

This is GREAT news!!! I am so happy with this news. Downtown LA will have a Mandarin Oriental and Ritz Carlton!!! So maybe Metropolis project will get downtown a "W" hotel???

Here is more info:


Related Announces Luxury Hotel for Grand Avenue
World-Class Hotel with Luxury Residences in Downtown Los Angeles will be Cornerstone of Iconic Tower

Designed by Frank Gehry

LOS ANGELES--(BUSINESS WIRE)--Related today announced that it has signed an agreement with the Mandarin Oriental Hotel Group expressing intent to manage the hotel component at the prestigious Grand Avenue development in downtown Los Angeles. The hotel will occupy the first 20 floors of a 48-story tower designed by Frank Gehry that will feature luxury for-sale residences on the upper floors. The 275-room hotel, expected to open in Summer 2010, will introduce a world-renowned hotel to downtown that will attract new and diverse visitors to the city center.

"This marks a major milestone for Grand Avenue in our mission to create downtown Los Angeles' premier destination," said Stephen M. Ross, Chairman and CEO of Related. "Mandarin Oriental is legendary for its service and unsurpassed in hotel management and we intend to set a new standard for this region." He noted that Mandarin Oriental is highly sought after, but is extremely selective in its choice of venues. Related and the AAA Five-Diamond Mandarin Oriental New York at Related’s Time Warner Center have together sold out The Residences at Mandarin Oriental New York which defined Five Star Living™.

“This is great news for Grand Avenue and for downtown Los Angeles,” said Eli Broad, chairman of the Grand Avenue Committee that has overseen the management of the redevelopment project for the past five years. “We are pleased with the prospect of having a hotelier of the stature of the Mandarin Oriental in what will be the most stunning high-rise in Los Angeles in the center of a burgeoning cultural district.”

The hotel will create 400 to 500 new jobs for Los Angeles in addition to attracting visitors that will shop, dine and enjoy an evening's entertainment at one of downtown's many venues. The hotel will occupy the lower floors of an iconic 48-story tower designed by Frank Gehry. A dramatic soaring entrance lobby will take full advantage of its location directly opposite Gehry’s Walt Disney Concert Hall. Set among 250,000 square feet of specialty retail and world-class restaurants, the tower will be the architectural centerpiece of Grand Avenue and will house luxury residential units on its upper floors above the hotel, which will feature dramatic and sweeping views.

Set on a full city block of four acres directly across the street from the city's signature Disney Hall, the first phase of Grand Avenue is slated to start construction late this year. Its mix of retail, restaurants and public amenities as well as the hotel and residential condominiums will create a destination that is pedestrian-friendly and attractive to residents and visitors.

Gehry's design for this large urban site is influenced by its context. It weaves landscaped public spaces into the neighborhood with both street-front and multi-level retail, plazas, terraces and walkways with expansive view corridors and pedestrian connections to downtown's cultural center, the new civic park and adjoining Grand Avenue, First, Second, and Olive Streets. The form and scale of the buildings respect Disney Hall and will create a striking landmark for the Grand Avenue neighborhood.

A broad spectrum of retail is planned in Grand Avenue phase one including a 50,000-square-foot specialty food market, a major bookstore, a food hall, a 35,000-square-foot premier health club, a 25,000-square-foot event facility, signature retailers and specialty apparel shops. A collection of local, regional and nationally recognized restaurants will play a major role in establishing the ambiance and appeal of this new downtown destination.

"We have received an enthusiastic response from a significant number of impressive retailers and restaurateurs, and are in serious discussions with many who have strong interest in locating at Grand Avenue," noted Kenneth A. Himmel, president and CEO, Related Urban Development. "We anticipate announcing additional commitments in the near future."

The entire nine-acre Grand Avenue mixed-use redevelopment comprises 450,000 square feet of retail, the 275-room hotel and up to 2,600 residences, providing a new and dynamic community for downtown as well as a Southern California destination that will engage the region's more than 17 million residents and 24 million annual visitors.

About Related

Heralded as one of the most prolific and visionary developers in the country, Related was formed over thirty-five years ago. Today Related is considered the most prominent privately owned real estate development firm in the United States, headquartered in New York City with divisions in development, acquisitions, property management, marketing and sales. In 2004, Related completed the development of New York City's newest landmark, Time Warner Center. Related has affiliated companies and developments in Miami, Los Angeles and Chicago and boasts a team of more than 2,000 professionals. To date, Related has real estate assets worth over $15 billion with another $9 billion currently in development. In Los Angeles, Related is expanding its portfolio with The Century, a super-luxury condominium in Century City and The Grand Avenue development, situated directly across from the beloved Frank Gehry-designed Walt Disney Hall, which will include luxury residences, retail, notable restaurants, and a world class hotel.

Related is also the largest shareholder in CharterMac, the largest financier of affordable housing in the country. For more information about Related please visit www.related.com

[BrighamYen]

LAB, celebrate! Mandarin Oriental is coming to L.A.!

OMG OMG! I have been hoping this WHOLE TIME that it be a Mandarian Oriental!!! This calls for a drink! :)

[LAMetroGuy]

how about a drink at the edison !

[LosAngelesSportsFan]

OMG OMG! I have been hoping this WHOLE TIME that it be a Mandarian Oriental!!! This calls for a drink! :)

Ha, you were the first thing i thought of when i heard it was the Mandrian. LOL. Now it is Imperative that we get those county buildings knocked the fuck down. Seriously, they need to get rid of those things ASAP!!!!

[citywatch]

:dancing: :thankyouthankyou: :dancing:

If this news doesn't end up being a carrot hanging at the end of a stick, it will be another bit of the puzzle that makes DT one of the most interesting hoods in LA. Other areas by comparison, esp the far flung burbs where lots of ppl eventually turn to for their new residence, are starting to look like an even bigger snooze.

[Carioca]

This is fantastic news!
I'll buy a few rounds of drinks when the first crane rises!!!

how about a drink at the edison !

Speaking of the Edison, did i understand correctly that TONIGHT is the grand opening? I read that a few different places, but their site says otherwise....

[bobcat]

Related Signs Mandarin for Downtown Hotel
By Bob Howard
(For more retail coverage, click GlobeSt.com/RETAIL and to read more on the multifamily market, click here.)

LOS ANGELES-The Mandarin Oriental Hotel Group has signed a letter of intent to manage a 275-room hotel planned by the New York-based Related Cos. as part of the previously announced 1.2-million-sf, $1.8 billion Grand Avenue project. The hotel will occupy the first 20 floors of a 48-story tower designed by Frank Gehry that will feature luxury for-sale residences on the upper floors.

The hotel, expected to open in summer 2010, will be a key part of Gehry's design for a Downtown neighborhood that would occupy a full city block of four acres. The neighborhood will also include other residences, retail, restaurants and public amenities directly across the street from the Walt Disney Concert Hall, which Gehry designed.

Stephen Ross, chairman and CEO of Related, comments that Mandarin Oriental “is highly sought after, but is extremely selective in its choice of venues." Chairman Eli Broad of the Grand Avenue Committee, which is overseeing the project, calls it “great news for Grand Avenue and for Downtown Los Angeles."

The entire nine-acre Grand Avenue mixed-use redevelopment comprises 450,000 sf of retail. A broad spectrum of retail is planned in Grand Avenue phase one, including a 50,000-sf specialty food market, a major bookstore, a food hall, a 35,000-sf health club, a 25,000-sf event facility, along with other retailers and specialty apparel shops. A collection of local, regional and nationally recognized restaurants will joint the project as well.

The Related Cos.“is in serious discussions” with many retailers and restaurateurs who “have strong interest in locating at Grand Avenue," notes Kenneth Himmel, president and CEO of Related Urban Development. Himmel says the company anticipates announcing some of those commitments in the near future.

[bjornson]

^I'm guessing it will have retailers similar to that of the Time Warner Center.

[BrighamYen]

^ My wish list:

Whole Foods
Sports Club LA (I'll take a Equinox too!)
Barnes and Noble
Diesel
H&M
Cusp (or Barney's Co-Op)
Fred Segal (You never know!)
Ron Herman
Tiffanys

[bobcat]

I don't expect the retailers to be too exclusive, in general--most of the shops at Time Warner Center aren't super high end. However, TWC does have some of NYC's top restaurants and I think Grand Ave can support some very high end restaurants due to its proximity to the Music Center. There's no reason Grand Ave can't be the fine dining center of Southern CA.

[BrighamYen]

^ I'm not asking for Prada or Chanel!

[BrighamYen]

how about a drink at the edison !


OMG yeah! Saturday night!

[bjornson]

I don't expect the retailers to be too exclusive, in general--most of the shops at Time Warner Center aren't super high end. However, TWC does have some of NYC's top restaurants and I think Grand Ave can support some very high end restaurants due to its proximity to the Music Center. There's no reason Grand Ave can't be the fine dining center of Southern CA.

You're right. Time Warner Center doesn't exactly have exclusive or high-end retailers. You've got a point about the restaurant scene though. Two of the most expensive and highly rated restaurants are there. Masa (former owner of Ginza Sushi-ko here in L.A.) and per se (by French Laundry chef in Napa). Both are Mobil five stars, and the latter of which is also Michelin three stars.

On Grand Avenue, and Southern Ca, in general, there aren't any five star dining establishments. However, with downtown that can change. Patina, at Disney Hall, is rated four stars. It can only go up.



^ My wish list:

Whole Foods
Sports Club LA (I'll take a Equinox too!)
Barnes and Noble
Diesel
H&M
Cusp (or Barney's Co-Op)
Fred Segal (You never know!)
Ron Herman
Tiffanys

Hahah. Good list. Whole Foods and Equinox are at the Time Warner Center, so there may be chance!

Cusp and Barney's Co-Op are probably thinking the market isn't big enough yet in L.A (Cusp at Century City and Barney's at Grove).
H&M, I think would do it!
If Fred Segal can plan on building a 100,000 sf store in LV, then it's possible! If Fred Segal comes, Ron Herman will follow!

Hmmm...Tiffanys.

The possibilities are endless!

[Westsidelife]

All of this sounds like a mirror image of Time Warner Center with Related, Mandarin Oriental, similar retailers, and a location right across from the Music Center.

I can't wait to see the final designs for Grand Avenue. I'm curious as to who will design the other two phases. I wouldn't mind SOM designing the other two phases.

As for the retailers at the Shops at Columbus Circle, I'm NOT impressed. I would like to see both mainstream and exclusive retailers like the Forum Shops. I'd love to see Fred Segal expand at Grand Avenue, after all Fred Segal began here in LA.

[LA/OCman]

Just an FYI..I work for Equinox and Related is our parent company. They have already announced that we will be going into the Grand Ave project. We open our new Century City location next month!

[BrighamYen]

^ Awesome, so part of my wish list is coming true (although my first pick would have been Sports Club LA).

Where will the Century City location be? Inside the shopping center? Or the new 2000 Ave. of the Stars?

[LA/OCman]

Equinox is more urban, hip, young...perfect for the new downtown. We have 36 locations now, 7 in Southern Calif...The Century City location is 10220 Constellation Blvd. We have taken over the old Spa Mystique and are finishing the renovations.

[JRinSoCal]

Wow! First Ritz Carlton, then Waldorf Astoria and now Mandarin Oriental. That's amazing for LA!!! How many 5 star hotels does the LA area currently have?

And I agree with LAB, LA needs a Diesel store. One of my favs!

[bjornson]

^Diesel has a store in the Beverly Center. They just don't have a flagship location in L.A. like SF and NY. The company's looking for a location in the Melrose area though.

Man, I hope retail doesn't get this thread too off topic.

Maybe the Mandarin Oriental and the Ritz can inspire the Bonaventure and the Biltmore to renovate or remodel? Hopefully these projects can put a jolt in other hotels in downtown.

[LAMetroGuy]

I was thinking that the W was slated for Grand Ave, but now maybe Metropolis project will include a W??? Maybe a W hotel can be built on Fig and 8th?

[bobcat]

Maybe the Mandarin Oriental and the Ritz can inspire the Bonaventure and the Biltmore to renovate or remodel? Hopefully these projects can put a jolt in other hotels in downtown.

I think the MO and RC won't have much effect on other hotels because they are small, niche properties. The one that will have an effect is the Marriott Marquis, which is more in direct competition with those others you mentioned.

[bobcat]

How many 5 star hotels does the LA area currently have?


The only hotels in LA County that have garnered Mobil 5 stars and/or AAA 5 diamonds are:

Bel Air Hotel
Beverly Hills Hotel
Ritz Carlton Marina Del Rey
Raffles L'ermitage
Peninsula
Ritz Carlton Pasadena
Four Seasons

The Four Seasons Westlake Village, which just opened, and the Montage Beverly Hills will also likely both be rated 5 stars/diamonds.

OC also has a few 5 star/diamond hotels.

[LosAngelesSportsFan]

Ya that 8th and Fig lot HAS TO GO!! that would be a perfect W location. close to Staples, hot restaurants and bars, and close to other Hotels like the Ritz and the Gansevoort, it they ever start on that thing. Great news about the retail. its looks as though its shaping up nicely.

[LongBeachUrbanist]

:fruit: :fruit: :fruit:

This project, along with LA Live, is seriously warping the gravitational pull of Southern California. Not only does it make LA more attractive overall, but it places that new energy square in the middle of our formerly "nowhere" downtown.

Remember, the formula for revitalization is:

1.) housing
2.) local retail and restaurants
3.) hotels and destination retail and restaurants
4.) office construction

It's good to be almost at stage 3. I'll pop the champagne cork the day they start taking down the Tinkertoy parking structure in the fall.

I just hope the city doesn't take this as a sign that it can continue to neglect infrastructure. The streets still need beautification, the street lighting still need to be made consistent, the parks need to be redone, and most importantly, the Downtown Connector still needs to be built.

:fruit: :fruit: :fruit:

[Westsidelife]

A Four Seasons hotel may potentially occupy that empty lot at 8th and Figueroa. It's also believed that W may open a Downtown location.

I hope Downtown will one day secure the top tier of 5 star luxury hotels:

Ritz-Carlton
Four Seasons
St. Regis
Peninsula
Mandarin Oriental

NYC is the only US city to have all five of them. San Francisco has all of those except Peninsula. Chicago has all of those hotel brands except St. Regis.

[bjornson]

^Don't forget Shangri-la. They're expanding into North America. Some would argue that it's the most luxurious of the Asian chains, perhaps even more so than Mandarin.

They're opening in Chicago, Miami, and Las Vegas. With more locations in the future.

As you know, St. Regis didn't do well in it's location in L.A., so who knows when they'll come back. Peninsula, arguably the most luxurious of all the chains you mention is very, very selective in their locations. They may believe that their location in Beverly Hills suits L.A. just fine. Besides, two locations so close to each other? But, you never know...give it ten years.

EDIT: Oops, I forgot Raffles; it's another Asian brand. It has locations in Beverly Hills, Chicago, and NY.

[solongfullerton]

FYI, theres a really sweet super 8 on Century Blvd just east of LAX.

Lots of fine ladies walking by once the sun goes down.