LOS ANGELES | Downtown Project Rundown 6.0

[LA21st]

Most people don't know Fulton Market didn't have alot of restaurants/retail until a few years ago, outside of Randolph Street.

There were old brick loft buildings and what not but it was mostly a quiet area, not unlike much of the arts district now.

Even now, if you go a few blocks south of Randolph, there isn't much storefronts/activity there.

I used to play softball in the West Loop, so I know what Fulton Mkt/West Loop used to be.

[BrandonJXN]

Fulton Market was dead as can be as recently as 2017 when I left. What's happening there now is really happening within the last 3-4 years. The Arts District and Fulton Market are very similar though.

[scania]

Originally Posted by headcheckjj

Wow, so if Mitsui Fudosan is starting work soon on the tower next door (https://la.urbanize.city/post/mitsui...8th-grand-hope), and this parking structure is getting redeveloped into a nearly 300-foot data center, all we have is the church on the neighboring lot to redevelop and the whole block will be covered?

https://la.urbanize.city/post/13-sto...727-grand-dtla

This is cool.

[citywatch]

Bloomberg

America’s second-largest city is at the forefront of mounting property distress that threatens to bring widespread defaults and deeper pain for landlords. With downtown LA’s office vacancy rate at a record 30%, buildings have plunged in value as workers stay away from the urban core of a sprawling, car-centric region.

It’s a scenario unfolding in downtowns across the US after a pandemic that turned millions of Americans into remote workers, afflicting cities with vacant storefronts, crime concerns and fiscally strained transit systems. Now, rising interest rates are colliding with falling property values, pressuring building owners whose debt burdens are higher than their equity. That’s in turn spurred warnings of financial instability from bankers, private equity executives and the Federal Reserve, which said in a report this month that “a correction in property values could be sizable.”

Dense cities like San Francisco and New York face growing gluts of obsolete office space, but they also have histories of rebounding after crises such as the dot-com bust and the Sept. 11 attacks. The outlook is more murky in the downtowns of metro areas that sprawl into freeway-laced suburbs and offer alternatives to the central business districts. Atlanta, Chicago and Houston rank among the downtowns with the highest rates of office vacancies, according to Savills.

The problem is especially acute in Los Angeles, better known for its Hollywood studios and celebrity estates than downtown towers miles from where many residents live and work. “In terms of distressed borrowers in the market, downtown LA might win the prize,” said Lea Overby, a commercial real estate analyst with Barclays Capital. “The product is old, tenants are downsizing and the area isn’t appealing.”

Downtown LA, for one, was a center of Asian investment, attracting billions of dollars from developers such as China Oceanwide Holdings Ltd., which has left the shell of mixed-use project sitting stalled for years. Korean Air Lines Co. opened the Wilshire Grand Center, a 73-story hotel and office complex, in 2017. About 20% of the office space is vacant.

Much of downtown LA’s real estate troubles have roots in its sprawling geography. Los Angeles County is 4,750 square miles (12,300 square kilometers) — almost as big as the state of Connecticut — with a population nearing 10 million. The metropolis has been called “72 suburbs in search of a city,” a comment attributed to Dorothy Parker, Aldous Huxley and HL Mencken among other wits.

No S&P 500 company calls downtown home. The area is the seat of offices for government agencies and legal and accounting firms, with a handful of financial companies, such as Capital Group. The oil and aerospace firms that drove the city’s post-World War II boom are long gone. The entertainment industry is almost everywhere but the city center: Walt Disney Co. is in Burbank; Warner Bros. Discovery Inc. and Comcast Corp. are in the San Fernando Valley; Netflix Inc. and Paramount Global are in Hollywood.

“It feels like you couldn’t have created a set of worse circumstances,” said Jessica Lall, who headed a downtown business development district before joining CBRE Group Inc. as a managing director in January. “Money’s not the only reason. The reasons are safety, security, amenities.”

Epic commutes and clogged freeways also are a deterrent for office workers. The alternatives to driving aren’t appealing. Daily rail and bus ridership on the Los Angeles County Metropolitan Transportation Authority is down 30% since the pandemic. Through March of this year, 22 people were found dead on the Metro system, many suspected of drug overdoses, Mayor Karen Bass said in a briefing last month. That amounts to the total for all of 2022.

“The success of downtown is essential to the success of our entire city,” Bass said in a statement to Bloomberg. “Thriving commercial districts do not happen by accident.”

Christopher Rising, a second-generation LA developer, said he recently stepped out of the California Club, a downtown bastion of the city’s elite since 1887, and saw a man with his pants down defecating in the street. Rising still owns four downtown office buildings, having sold several properties to invest the proceeds in industrial real estate, which has more demand. “It’s all solvable,” Rising said. “Government has to keep people safe” from crime.

Brookfield’s troubled offices represent “a very small percentage of our portfolio,” Kerrie McHugh, a spokesperson for the Toronto-based firm, said in a statement. The company is still committed to downtown LA, she said, and is putting the finishing touches on the Beaudry, a new 785-unit apartment tower. Online pre-leasing began in April and there has been a “strong uptick” in demand with the recent start of physical tours, McHugh said.

One of the biggest downtown LA real estate boosters is New York-based Silverstein Properties, known for rebuilding the World Trade Center area after Sept. 11, 2001. Silverstein paid $430 million in September 2020 for LA’s US Bank Tower and spent $60 million more to revamp the skyscraper, turning the 54th floor into a concierge-staffed conference center and redoing the ground-floor lobby with a plant wall, blond-wood paneling and a juice bar. The goal: to create a hotel-like comfort experience that will lure in workers from home offices.

At a March ribbon cutting, Silverstein CEO Marty Burger likened downtown LA to lower Manhattan after the terrorist attacks, and touted his company’s contribution to the revitalization and transformation of New York’s Financial District into a round-the-clock live-work community. “The naysayers said that downtown Manhattan was finished as a business district, that nobody would work in tall office buildings ever again,” Burger said. “I can tell you that in New York 20 years ago, we didn’t hesitate for a minute. We recognize the wonderful history and great potential in the downtown neighborhood” of LA.

EDIT: This corresponding vid from bloomberg news mentions how office space in century city is twice as much as it is in dtla but the vacancy rate there is much lower. So the most important factor is often: location, location, location. Even before Covid, dtla still had higher vacancy rates than other cities did, both locally & throughout major cities of the nation. So it has been at a disadvantage for awhile, at least when having access to certain sources of investment capital.

If the subway that's going to connect century city with dtla isn't completed ASAP, the wiggle room for dt will be even narrower than it should be.

• Video Link

Things like the new connector line, much less the subway down Wilshire Blvd west of Vermont, had better be kept safe & clean or else the idea of rapid transit in LA (& billions of $$ poured into it) instead of just cars & fwys....clogged or otherwise.....will go down the drain.
.

[ChelseaFC]

Originally Posted by headcheckjj

Wow, so if Mitsui Fudosan is starting work soon on the tower next door (https://la.urbanize.city/post/mitsui...8th-grand-hope), and this parking structure is getting redeveloped into a nearly 300-foot data center, all we have is the church on the neighboring lot to redevelop and the whole block will be covered?

https://la.urbanize.city/post/13-sto...727-grand-dtla

Not sure what the problem is with the church remaining as is. You see little churches like that even in heavily urbanized areas like New York City. Places of worship still provide a service to people in the community. Redeveloping parking lots is more important.

[Illithid Dude]

At least people will be using the church. The data center will be an urban black hole. 13 stories with no windows and no retail. Our very own 2001 monolith.

[scania]

Originally Posted by Illithid Dude

At least people will be using the church. The data center will be an urban black hole. 13 stories with no windows and no retail. Our very own 2001 monolith.

No matter what major city you visit, everything isn’t, nor doesn’t, have to have residential, or street level retail, etc. A building with some architectural dynamics is just as cool, if not better.

[Quixote]

Renderings for that data center:


Instagram / @officeuntitled


Instagram / @officeuntitled


Instagram / @officeuntitled


Instagram / @officeuntitled

[Quixote]

A few more. I'm refreshingly surprised and pleased that they're paying attention to the rear facade.


Instagram / @officeuntitled


Instagram / @officeuntitled

[citywatch]

^ that would replace the parking structure of what this bldg along 7th St was originally occupied by.....

https://youtu.be/pkq8To4Vqk8?t=133

I believe most of that bldg of a former dept store is now occupied by telecom equipment....as the one wilshire bldg a few blocks away is....so the number of ppl entering and leaving it must be rather small. Not sure exactly how much demand there is for parking space in that section of dtla, although if the Mitsui apt tower goes up south of the proposed telecom bldg, there will be both more ppl & fewer parking stalls in that section of dt. Whole Foods is also across the street, but I'm not sure how they juggle their indoor parking lot.

[Quixote]

Mitsui Fudosan's 8th and Figueroa right next to it (behind it from this angle). Would be a very classy looking.


Urbanize LA

[Quixote]

Originally Posted by citywatch

^ that would replace the parking structure of what this bldg along 7th St was originally occupied by.....

https://youtu.be/pkq8To4Vqk8?t=133

I believe most of that bldg of a former dept store is now occupied by telecom equipment....as the one wilshire bldg a few blocks away is....so the number of ppl entering and leaving it must be rather small. Not sure exactly how much demand there is for parking space in that section of dtla, although if the Mitsui apt tower goes up south of the proposed telecom bldg, there will be both more ppl & fewer parking stalls in that section of dt. Whole Foods is also across the street, but I'm not sure how they juggle their indoor parking lot.

I'm pretty sure Whole Foods shoppers can park underground at the complex.

Mitsui Fudosan is, I believe, planning on seven stories of above-ground parking with the possibility/goal of converting those to housing in the future. This is how lots of developments should be constructed actually.

[craigs]

Planning Department unveils draft citywide adaptive reuse ordinance

The adaptive reuse ordinance brought more than 12,000 homes to downtown

Steven Sharp
Urbanize Los Angeles
May 24, 2023

Adopted in 1999, the adaptive reuse ordinance is credited with the ushering in the explosive growth of Downtown's residential community by enabling the conversion of vacant office buildings into housing. Now, as the City of Los Angeles faces a state mandate to enact new zoning rules to permit at least 255,000 additional homes, it could be going citywide.

"Los Angeles needs more housing that Angelenos can afford" said Mayor Karen Bass in a news release. "Adaptive reuse development can help bring much needed housing online throughout the City. I look forward to working with the City Planning Commission, City Council and communities across Los Angeles to receive input on this important policy."

The expansion of the adaptive reuse ordinance was designated as one of six key strategies in the citywide housing incentive program, which is how L.A. aims to meet its housing element obligations in the coming years. Currently, only buildings completed before July 1, 1974 in a handful of Central Los Angeles neighborhoods are eligible for conversion through the program. The ordinance now under consideration by Planning officials would expand eligibility to include:

• all buildings citywide which are at least 15 years old
• buildings between five and 15 years old with the approval of a conditional use permit by the Zoning Administrator; and
• any parking garage that is at least five years old.

While the adaptive reuse ordinance has enabled the construction of more than 12,000 homes in Downtown, past efforts to expand its reach to other quarters of the city have come with the caveat of only allowing income-restricted housing. However, with the market for offices perhaps forever changed by the pandemic, calls for converting empty buildings into apartments and condominiums have picked up steam in cities across the country.

The proposed regulations for the draft citywide ordinance would retain the provisions of the existing ordinance which offer additional flexibility for the conversion of existing historic structures, including exemptions from parking requirements and limits on residential density.

Conversion projects would remain subject to the city's linkage fee ordinance, which charges developers to generate funds for new affordable housing developments. The Planning Department is currently conducting a feasibility study to determine if affordability requirements are economically viable for adaptive reuse projects. Existing regulations allow for developers to pay an in-lieu fee rather than building affordable units on-site.

For more information, Planning staff will host three webinars from June 6 through June 8, offering background information on the draft ordinance and opportunities to provide feedback.


Aerial view of the Continental Building, which was converted to housing through the adaptive reuse ordinance


The San Fernando Building in Downtown Los Angeles, which was converted to housing through the adaptive reuse ordinance


The Pacific Electric Building in Downtown Los Angeles, which was converted to housing through the adaptive reuse ordinance

[scania]

Originally Posted by Quixote

A few more. I'm refreshingly surprised and pleased that they're paying attention to the rear facade.


Instagram / @officeuntitled


Instagram / @officeuntitled

This will be awesome!!! I don't see how anyone could complain.

[BrandonJXN]

One World Trade wants it's base back.

But seriously as far as windowless buildings go, this looks pretty good. It'll all come down to the quality of materials used. If it serves a vital function then great. No different from the AT&T Building on Grand.

[headcheckjj]

I can see this being used in a lot of TV shows, movies, and commercials. That's great!

My one worry is if the material (metal, I'm assuming?) will be too reflective and blind the tenants in the new Mitsui tower going up nextdoor to it (sort of how WDCH was when it first opened and they eventually had to dull the metal siding).

Originally Posted by Quixote

Renderings for that data center:


Instagram / @officeuntitled

[HusBy]

Originally Posted by headcheckjj

I can see this being used in a lot of TV shows, movies, and commercials. That's great!

My one worry is if the material (metal, I'm assuming?) will be too reflective and blind the tenants in the new Mitsui tower going up nextdoor to it (sort of how WDCH was when it first opened and they eventually had to dull the metal siding).

Looks surprisingly great! Any details if the glassy ground floor section will accommodate some sort of active use?

[Illithid Dude]

Unfortunately the data center does actually look good. As far as urban voids go we could do worse.

[hughfb3]

That data center looks great!

1000 Hill rises to its 3rd floor

[LosAngelesSportsFan]

If they could add some retail, it would be ideal, but the design is interesting and unique. Hopefully no value engineering at the very end