LOS ANGELES | Wilshire Grand Development | 1,100 FT | 73 FLOORS | U/C
 

http://www.mercurynews.com/breakingnews/ci_12062157

Developer offers hope to rebirth of downtown LA

By JACOB ADELMAN
04/03/2009

LOS ANGELES—A major developer planned to announce a $1 billion high-rise office and hotel complex Friday, the first new downtown construction project since the real estate spiral largely scuttled dreams of a resurgent city center.

Thomas Property Group's plans call for an 80-story glass-walled building with a slanted profile resembling a ship's sail that would be built on property owned by development partner Korean Air Co.

The design includes a 40-story hotel and condo tower and an 18,000-square-foot public park that would replace the 50-year-old Wilshire Grand hotel.

Company Chairman and Chief Executive James A. Thomas said the city's first major office high-rise in some 20 years will satisfy what he sees as a rising demand for business real estate as downtown grows after the recession.

"There is no place that has the amenities, the attractions that downtown Los Angeles has," he told The Associated Press on Thursday, a day ahead of the official announcement.

The news offers a glimmer of optimism for a downtown rebirth that has suffered in the slumping economy. A Frank Gehry-designed tower complex is stalled, developers have declared bankruptcy and condo prices have plunged.

Some bright spots have emerged in the core of the nation's second-largest city, however, including small businesses cropping up in the area's forgotten storefronts and renewed condo sales in downtown lofts.

The area's long-term hopes are pinned to an emerging nationwide demand for smaller homes in compact, walkable neighborhoods as families shrink and fears of increasing gas prices drive people from their cars.

"I think downtown Los Angeles is going to do quite well when this economy recovers," said Christopher B. Leinberger, a land use strategist and visiting fellow at the Brookings Institution think tank in Washington.

Some observers think early boosters' vision of a Manhattan-like metropolis on the Southern California coast was destined to fail in a city where development sprawls and there are several major financial centers in the region.

Downtown "will never be for Los Angeles what midtown Manhattan is for New York or the Loop is for Chicago, because it hasn't been that since the 1920s," said urban scholar Joel Kotkin, author of "The City: A Global History." "There's something called history and it has an odd impact."

The city Building and Safety Department's list of high-rise buildings approved for the permitting process show dozens of downtown projects that have never broken ground.

The stalled projects include Gehry's $3-billion Grand Avenue housing and retail project and the 76-story Park 5th condo complex, which was billed as the tallest residential structure in the West.

The median price for new homes downtown has plummeted from $535,000 in the first quarter of 2008 to about $422,000 in the first quarter of this year, a 21 percent drop, according to tracking firm MDA DataQuick. The median price for all new condos in Southern California dropped about 14 percent during that time.

The slump has forced a growing number of landowners and developers into bankruptcy, including downtown's largest landlord, Meruelo Maddux Properties Inc.

While most construction has halted downtown, smaller businesses are staking a future on streets once largely empty after office workers went home and bordered by Skid Row's massive homeless population.

Japanese convenience-store chain Family Mart—an Itochu Corp. subsidiary known here as Famima!!—now has six stores downtown and plans a seventh one to tap into the growing around-the-clock foot traffic, marketing coordinator Naomi Hotta said.

Downtown newcomers include the headquarters for Herbalife International of America Inc. and the Urth Caffe Inc. chain of coffee shops.

The Nickel Diner, which opened in September and was named one of the best new restaurants last year by Los Angeles magazine, added dinner hours last week.

"We've become kind of the poster child of the new downtown," said co-owner Monica May, who credited the restaurant's signature maple-bacon doughnut for much of its success.

Lower condo prices have lured some bargain-hunting buyers, although overall sales remain sharply down.

"Downtown is fairly small as urban downtowns go but with my income it was as close as I could get to something like London or New York and still stay in Los Angeles," said Hutton Cobb, 52, who rented a home in a nearby suburb for about 25 years before buying a condo in the 24-story Evo building.

Homes have been selling on the far upper end of the scale too, such as the two-story penthouse bought for $9 million on the top floors of the 54-story Ritz-Carlton Residences, where prices start at $1.4 million. The building is part of the LA Live entertainment and retail complex a few blocks from where Thomas plans its new project.

Thomas said the company, working with the A.C. Martin Partners architecture firm, has completed preliminary designs and was preparing to file plans with the city.

Thomas Properties and Korean Air planned to seek financing from lenders and investors on both sides of the Pacific and begin construction in 2011.

Thomas said he expected credit markets to thaw by the time the partners seek construction loans and that the current downtown slump only encourages him to begin the ambitious project there.

"Construction costs are down, material costs are down," Thomas said. "It's ideal to be placing yourself to be ready to ride the wave when the recession turns and the economy moves up."

http://www.bloomberg.com/apps/news?p...9Ig&refer=home

Korean Air, Thomas Plan $1 Billion L.A. Office, Hotel Complex

http://www.bloomberg.com/apps/data?p...d=i99dGk1gIWQs

By Daniel Taub
April 3 (Bloomberg)


Korean Air Lines Co. and Thomas Properties Group Inc. plan to build a $1 billion office-and- hotel complex, downtown Los Angeles’s first office high-rise since 1992, to capture rising demand after the U.S. recession.

A 60-story office tower with 1.15 million square feet (107,000 square meters) of space and a 40-story hotel with as many as 700 rooms will be built on a full city block where the Wilshire Grand Hotel now stands, Seoul-based Korean Air and Los Angeles-based Thomas Properties said today in a statement. Korean Air has owned the hotel and the land since 1989.

Development of high-rise towers in the U.S. has been slowed by the global credit crisis and a drop in demand for space amid the recession. In downtown Los Angeles, the Grand Avenue residential, hotel and retail project planned by Related Cos. has been stalled by a lack of funding. Korean Air and Thomas Properties said they expect financing will be available for their project by the time construction begins, likely in 2011.

“It’s reasonable to assume that the credit market will get fixed and start flowing again,” Thomas Properties Chief Executive Officer James A. Thomas said in an interview. “The ideal timing is to get everything lined up, and as you come out of the recession, you have the product to deliver. So I think our timing is really superb.”

Early Stage

Plans for the project, which Thomas said will cost "$1 billion, plus or minus,” are in their early stages, he said. Korean Air and Thomas haven’t yet decided whether Thomas Properties will have an equity stake in the project, planned for completion in 2014, or how large such a stake would be.

Thomas Properties and Korean Air also will decide later whether the complex’s hotel will include condominiums or rental apartments on its top floors. As many as 100 residential units may be included, James Thomas said.

The project doesn’t have financing and may be seeking it at a time when banks have curtailed lending for real estate as commercial loan delinquencies and office vacancies rise.

The Los Angeles metropolitan area had about $7.5 billion in distressed properties as of the end of March, a 168 percent jump from December, according to data from Real Capital Analytics.

“Korean banks are interested, but it’s too early to say anything yet,” Korean Air Chief Executive Officer Yang Ho Cho said in an interview. Korean Air also will need to select an operator for the complex’s hotel, he said.

Wilshire Grand

In addition to the 896-room Wilshire Grand, which sits on the corner of Wilshire Boulevard and Figueroa Street, Korean Air also owns three hotels in Korea and one in Hawaii, as well as office buildings in Los Angeles, Japan, Hong Kong and Korea. The company is South Korea’s biggest air carrier, and employs more than 1,000 people in Los Angeles.

Thomas Properties, founded in 1996, owns office, retail and apartment buildings in California, Texas, Pennsylvania and Virginia. Its properties in Southern California include City National Plaza, an office complex with two 51-story office towers that occupies an entire city block in downtown Los Angeles.

The shares are down 85 percent in the year through yesterday, reducing the company’s market value to $52.5 million.

Downtown Los Angeles, which was dominated for decades by banks, law offices, accounting firms and government offices and had few residents and little nightlife, has undergone a revival over the past decade, with the opening of the Staples Center sports arena, Walt Disney Concert Hall and the L.A. Live entertainment complex.

No Office Towers

While high-rise hotels and residential buildings have been added to downtown Los Angeles’s skyline, no major office buildings have been added in the city’s core in almost two decades. The last built was Maguire Properties Inc.’s 54-story Two California Plaza, completed in 1992, James Thomas said.

Downtown Los Angeles has about 14 million square feet of space in so-called trophy office buildings, and about 88 percent of that space is leased, James Thomas said. Once the economy improves, it will take three to five years for those buildings to reach 93 percent occupancy, the point at which landlords are considered to have pricing advantage over office space, he said.

“We are overdue for an office building,” Thomas said. “We need it.”

______________________

Posted on la.curbed.com

http://la.curbed.com/uploads/2009.03.demoedgoodbye.jpg

http://www.latimes.com/media/photo/2009-04/45954931.jpg
An artist's sketch shows a street-level view of the 40- and 60-story towers proposed for the property
now occupied by the Wilshire Grand hotel in downtown Los Angeles. Owner and developer Korean Air
unveiled plans to build a $1-billion complex that will include a hotel, offices and retail space.


http://www.latimes.com/media/photo/2009-04/45954935.jpg
The two high-rise towers, rendered in blue in this image,
would stand shoulder to shoulder with other skyscrapers
alongside the 110 freeway.

courtesy los angeles times.

Here's another from the LA Times...

http://www.latimes.com/media/photo/2009-04/45954953.jpg


http://www.latimes.com/media/photo/2009-04/45954946.jpg

I like how the design accentuates the corner of 7th and Figueroa, which is a busy intersection with a subway stop.

So, anybody know the exact number of floors or height? I've read the tallest to be 80, 65, and 60 floors.

yup. i noticed that too. the current hotel driveway/lobby is poor urban design as a dark recess stretching along its length of 7th. this opens up the entire intersection to a great degree and, along with a badly need fix to 7th and fig can better bridge downtown to central city west. that stretch of figueroa stretching from 8th on northwards has always suffered from brutal highway architecture. it can use this. the wall of parking facing 8th needs to be redone also. what were the architects thinking? i wish this had happened to the marriot. there is so much crap along that stretch of fig. 7th and metro's effect on streetlife is pretty much nonexistent of anywwhere west of the 110. that needs to change if we want a relevant downtown.

..

They already built this tower. It's called the Bank of America building and it's located in New York City!

I need to go change my pants.

Another rendering from Curbed LA...

http://farm4.static.flickr.com/3592/...30b94f35_o.jpg

Some seriously good news for downtown Los Angeles.

What's really great about this proposal is that the property is a view terminating property when standing on 7th Street and looking west. Currently that view is terminated by the Wilshire Grand, but if this thing gets built, that view could be terminated by two very modern glass towers, one of which would be the second or third tallest in the city. :cheers:

God I hope the spire survives any possible design changes.

This resembles Bryant Park so much! Thanks for providing the renders, NYguy!

:rolleyes:

As with any tower, the design will get cleaned up a lot before it actually gets built.

The renders appear to fall in the 60-65 floor range.

That's nice. The first real spire for LA? They should combine the towers to make it the most prominent in the city, a new tallest.

If it's similarly proportioned to the tower that everyone seems to think it looks like, BOA, this very well may end up being LA's new tallest anyway, albeit merely by virtue of the spire.

I wish the spire was taller so the building looked sleeker. I really don't mind the design but it does remind me of BofA. Still, looks prettty good!