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Equity Office Daily Brief: October 9, 2017

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Daily Brief

October 09, 2017

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Downtown's historic office buildings, once abandoned, are again drawing tenants

Los Angeles Times

 

Just over a century ago, Hulett C. Merritt built an imposing white edifice on Broadway in downtown Los Angeles meant to reflect his stature as one of California’s richest, most successful businessmen. It was a nine-story office tower designed to evoke the...

 


A Slow and Pricey City Project

Los Angeles Downtown News

 

DTLA - What are we to make of a stalled plan to upgrade a historic city building? Is it a case of government moving at molasses-like speed to its own detriment? Is it a result of what happens in a superheated construction...

 



BLOG & ONLINE NEWS

 

Will the LA River through Downtown ever look like this?

CurbedLA

 

Splashy new renderings show what a greened-up LA River—surrounded by parks, jacaranda trees, restored marshlands, and new high-rises and mixed-use development—might look like decades from now. The renderings were released this week by AECOM, a giant Los Angeles based engineering, engineering, design, and consulting firm, and...

 


Metro looks to accelerate 28 transportation projects in time for the 2028 Olympics

CurbedLA

 

Metro officials are trying to figure out how to speed up more than two dozen transportation projects. If they succeed, Los Angeles will boast a comprehensive transit system sooner than anticipated—but it won’t be easy. Their work comes at the request of Los...

 


New seven-story mixed use development planned for Vermont and Olympic

CurbedLA

 

Yet another large residential development may be on the way to Koreatown. An environmental report published by the Los Angeles Department of City Planning last week details a seven-story project planned for the southeast corner of Vermont Avenue and Olympic Boulevard. The proposed...

 


Expo-Adjacent Offices Getting Underway in Culver City

urbanize.LA

 

A parking lot and a pair of small commercial buildings near the Expo Line's Culver City Station have been fenced off, signaling the start of construction for another commercial development. The properties, located at 8888 Washington Boulevard, are slated for the construction of...

 


New transit-oriented apartment complex set to rise in Burbank

CurbedLA

 

A new transit-friendly apartment complex may be on the way to Burbank, just west of the city’s Metrolink station, according to an announcement from architecture firm Newman Garrison + Partners, which has been selected to design the project. Developed by Cusumano Real Estate Group,...

 

FULL TEXT


Downtown's historic office buildings, once abandoned, are again drawing tenants

Los Angeles Times

 

Just over a century ago, Hulett C. Merritt built an imposing white edifice on Broadway in downtown Los Angeles meant to reflect his stature as one of California’s richest, most successful businessmen.

It was a nine-story office tower designed to evoke the ancient Roman temple of Minerva, clad in exquisite white marble from the same Colorado quarry that supplied stone for the Lincoln Memorial being erected at the time in Washington.

Today, the long-vacant Merritt Building is covered in dark soot and graffiti, a lingering eyesore in a neighborhood on the mend. Its new owners, however, have begun a full-scale makeover to restore it to life as an upscale office building — an unusual but increasingly common decision among landlords in downtown’s Historic Core.

In a trend that would have been unimaginable only a few years ago, historic office buildings are being returned to the office market instead of converted to apartments, condominiums or hotels, which has been common for the last decade and a half.

The pattern reflects tenants’ changing tastes in office space and the comeback of downtown. It also reveals a silver lining to what has been widely regarded as one of the worst planning decisions in the city’s history — the wholesale removal of the aging Bunker Hill residential neighborhood in the 1950s and 1960s to make way for what was then called “urban renewal.”

Victorian homes that had once been among the city’s finest addresses were wiped away. By the 1980s and ’90s, gleaming office skyscrapers including the 73-story U.S. Bank Tower populated Bunker Hill and white-collar businesses’ abandonment of L.A.’s original downtown on Spring Street, Main Street and Broadway was complete.

Many of the old offices were left mostly vacant or converted to manufacturing uses, but the buildings remained standing as a new downtown core emerged.

“Development went elsewhere and there wasn’t interest in tearing them down to build new tall buildings,” said Linda Dishman, president of the Los Angeles Conservancy. “The heedless destruction of the Bunker Hill neighborhood may have saved Spring Street.”

Now many business owners and their employees find old buildings charming and better reflections of their company identities than the more impersonal mirrored- glass high-rises built to impress the elites of 20th century corporate America.

“Everybody who comes here identifies us with this space,” said architect Douglas Hanson, whose firm HansonLA moved from the U.S. Bank Tower to the Corporation Building on Spring Street. “It gives people a real window into what we do and it’s consistent with our brand.”

The slim, 14-story Corporation Building dates to 1915, when small floor plates and big windows were typical. “These buildings were built to use natural light,” Hanson said, which appeals to architects — up to a point.

When he moved his 20-person firm to a full floor in the old building about six years ago, it had no overhead lighting and no heating or air conditioning. The office had last been used for garment manufacturing.

“It was raw space,” Hanson said, “like working in the garage.”

Outside, people on the sidewalk included enough shady-looking characters to give visitors pause. “We had some clients, especially international clients, who were afraid to come,” Hanson said.

Homelessness is a persistent issue, but now there is more pedestrian activity on Spring Street than there is on Bunker Hill, including residents walking their dogs and sipping coffee in sidewalk cafes.

“We like the diversity of people,” Hanson said, “and working in a neighborhood where people are actually living.”

Hanson’s landlord, Izek Shomof, said he had success making residential lofts in historic buildings but noticed the rising popularity of “creative offices” — typically older buildings that sported exposed ceilings, polished concrete floors and other minimal finishes.

So Shomof, an Israeli-born real estate investor and developer who has been active in the Historic Core for years, added lights, air conditioning and other improvements to his Corporation Building. Recently, he added a food hall on the ground floor with multiple small restaurants.

“I saw there was a huge demand and said why not try it,” Shomof said. Today, his office tower is mostly leased. “It’s working out fine for us.”

The economics of historic buildings have tilted in favor of offices over apartments in many cases, said Phillip Sample, a real estate broker at CBRE Group Inc. Monthly rents are about the same for both categories but it costs less to prepare offices because they require less plumbing for bathrooms, kitchens and washing machines.

Rents for older buildings-turned offices in the Historic Core and Arts District can be as high as $3.75 per square foot a month, CBRE said, roughly the same as top towers on Bunker Hill. That’s in spite of the fact that many older buildings lack built-in parking.

“The kids nowadays are walking to work,” Sample said, or arriving via bicycle, ride-sharing services such as Uber or public transportation. “It’s just so much more easy than it used to be” to commute without a car, he noted.

Downtown was served by a steady stream of streetcars when industrialist Merritt completed his namesake building in 1915 at Broadway and 8th Street.

-Roger Vincent 

A Slow and Pricey City Project

Los Angeles Downtown News

 

DTLA - What are we to make of a stalled plan to upgrade a historic city building? Is it a case of government moving at molasses-like speed to its own detriment? Is it a result of what happens in a superheated construction market? Maybe it’s a combination of both. Perhaps it’s something else entirely.

Whatever the culprit, the result is the same: A long-anticipated and potentially financially beneficial (to the city) development has stalled before work even started. Los Angeles Downtown News last week reported on the plan to upgrade the Merced Theatre at 430 N. Main St. The city budgeted the project at El Pueblo de Los Angeles Historical Monument at $23 million. However, the two bids for the work came in at $35 million and $40 million. No contract was awarded.

The Merced plan would activate a 147-year-old property by making it the new home of the city’s Channel 35, which broadcasts City Council and other governmental meetings. There would be office space, a TV studio and a ground-floor performance area that could be used by the public. An adjacent historic building, known as the Masonic Lodge, would also be upgraded, and would have office and storage space.

Modernizing the Merced would activate the street (which is near the tourist magnet Olvera Street), preserve an attractive property that dates to 1870, and save the city the $300,000 a year it spends on Channel 35’s rent in Little Tokyo. It sounds good on paper.

The project, however, has moved at a snail-like space. El Pueblo representatives detailed the proposal in 2014, with a goal of completing the renovation in 2017. Yet only in the past few months did the bids come in. 

Given that timeline, it’s not surprising that the lowest bid is more than 50% over budget. As every developer in Downtown Los Angeles knows, the building boom has caused construction costs to spike in recent years. The demand for materials and experienced crews has created a competitive market that benefits bidders over clients. Those proposing market-rate housing projects have seen prices soar.

Housing developers always know that they can pass the higher costs on in the form of increased rents or condominium sale prices. When it comes to this city project, however, there is no pass-on opportunity.

Now the city is considering its options. Maybe parts of the project will be dropped. Maybe there is a more cost-effective way to achieve the same aim. Whatever happens, there still seems to be little sense of urgency — a city Bureau of Engineering representative told Downtown News that the next call for bids is expected to be ready in February. The aim is to select a contractor by June.

The plan still sounds good in concept, but at this point we have to question the process and the price. If proceedings have been so slow, and the bids so high, then it’s time for higher-ups to intervene. We’d hate to see the same situation a year from now, with increasing construction costs and a moribund building.

-Los Angeles Downtown News 2017

Will the LA River through Downtown ever look like this?

CurbedLA

 

Splashy new renderings show what a greened-up LA River—surrounded by parks, jacaranda trees, restored marshlands, and new high-rises and mixed-use development—might look like decades from now.

The renderings were released this week by AECOM, a giant Los Angeles based engineering, engineering, design, and consulting firm, and they zero in a four-mile stretch of the river from about the southern edge of the Arts District to just north of Dodger Stadium.

Returning the concrete channel to a more natural state, a waterway that residents can interact with, is one of the most exciting and most anticipated urban design projects on the horizon for Los Angeles.

There is already a bounty of ideas and proposals for what that might look like. AECOM isn’t proposing anything new.

Rather it has knitted together dozens of community and master plans—including the Boyle Heights Community Plan, Cornfield Arroyo Specific Plan, Civic Center Master Plan, and Union Station Master Plan—and development plans that have already been approved. (By AECOM’s estimate, there is 8 million square feet of entitled development in the area). It also incorporates plans for Taylor Yard, a former freight-switching facility that’s poised for a Mia Lehrer-led revamp.

“All we’re doing is showing how the pieces fit together,” says Nancy Michali, AECOM’s vice president of urban design. “We are building on what others have already done.”

If all the plans are eventually brought to fruition, the firm estimates there will be 300 acres of new parks, 7.2 miles of new bike paths, and a 50 percent increase in tree canopy.

The illustrations are packaged with recommendations for how public agencies, such as the city, county, and Metro, could partner with nonprofits and businesses to raise money to implement the changes. Together, AECOM is calling its work the “LA River Gateway Plan.”

It was developed with input from Los Angeles Mayor Eric Garcetti. His spokesperson, Alex Comisar, says the gateway plan helps “bring decades of planning and design work to life ... and shows Angelenos what the river's future could be.”

Marissa Christiansen, executive director of the nonprofit Friends of the Los Angeles River, says AECOM has “layered all of the existing plans that so many community members, designers, engineers and architects have worked on over the years to visually show what it would look like if they were fully implemented.”

On whether the plan will actually be put to use, Christiansen says, “I don’t know. There are a lot of plans out there that end up getting a lot of excitement and have a hard time getting implemented.”

AECOM says it wants to be “thought leader” for the river’s revitalization. It’s not the only one.

The biggest name is Frank Gehry. The starchitect is working on his own master plan for the river. It hasn’t been released yet to the public, and Mitcheli says Gehry’s firm declined to work with AECOM on its gateway plan.

She says she’s felt like a matchmaker while developing the plan over the past year, introducing officials and staffers from the county, city, and Metro who should have been talking to each other about what they’re up to—but haven’t been.

“We want them to stop and think about how the pieces could fit together, and not do it piecemeal,” she says.

-Jenna Chandler

Metro looks to accelerate 28 transportation projects in time for the 2028 Olympics

CurbedLA

 

Metro officials are trying to figure out how to speed up more than two dozen transportation projects. If they succeed, Los Angeles will boast a comprehensive transit system sooner than anticipated—but it won’t be easy.

Their work comes at the request of Los Angeles Mayor Eric Garcetti, who announced a new “28 by 28” initiative at the last meeting of the Metro Board of Directors. The goal is to hasten 28 projects in anticipation of the 2028 Olympics.

“We should all be racing to accelerate as many projects in as many places as we can,” he told Metro’s board, which he chairs.

But since announcing the initiative one week ago, few key details—including specific projects and how much more quickly they could be completed—have been released. It’s not clear yet if the 28 projects will be in addition to those already planned to be completed by the time LA hosts the Olympic games.

Details are fuzzy, because the transit agency is still puzzling through how individual projects could be sped up.

By the end of October, staffers are expected to make recommendations for how to evaluate Measure M-funded projects that could potentially be fast-tracked. Their suggestions might include looking at whether funding is available and whether environmental clearances are needed.

Metro’s board is expected to vote on the recommendations in November.

The agency is in the midst of a massive transit buildout, thanks in large part to Measure M, a voter-approved permanent sales tax hike expected to generate $860 million every year, all of it dedicated to transportation.

Measure M was sold to voters with a specific construction timeline for more than 90 projects around Los Angeles County, including the East San Fernando Valley Corridor, the Sepulveda Pass Transit Corridor, and a northern extension of the Crenshaw Line to Hollywood.

Speeding up these or other projects would require deviating from the Measure M timeline. That’s not the only provision in the ballot measure dictating how the projects should be built, so staffers will have to suss out where they might be in violation.

They have other big questions to consider, too. What happens, if, for example, a lawsuit ties up one project and puts it on hold for, say, several years of environmental review? Could Metro use the Measure M funds earmarked for the delayed project to finish a different one more quickly? Right now, Metro doesn’t have a firm answer.

Measure M includes the legal requirement that expediting one project cannot come with the cost of slowing down another.

“Any acceleration policy I want to make sure maintains the integrity of the expenditure plan we have, and the trust that’s been put in us by the voters of Los Angeles County,” Garcetti said.

At the same time, Metro is already working to quicken some projects, before the new framework is even completed. Thanks to work by Metro’s Office of Extraordinary Innovation, Metro CEO Phil Washington has also announced that the agency is “aggressively moving to accelerate signature components of the Measure M program” by partnering “with the private sector on three major Measure M projects.”

The three projects are: the Sepulveda Pass Transit Corridor, the West Santa Ana Branch Transit Corridor from Union Station to Artesia, and an expansion of Metro’s freeway toll lanes dubbed “ExpressLanes.”

Under the Measure M expenditure plan, the Sepulveda Pass project is scheduled to open in approximately 2033, and the West Santa Ana project in approximately 2041. The ExpressLanes expansion comes in a few different phases between 2029 and 2046.

Washington’s announcement means we should expect opening dates sooner, assuming Metro can pull the acceleration off successfully.

County Supervisor Janice Hahn has predicted that a public private partnership on the West Santa Ana line could accelerate the project's completion by up to 15 years.

-Matt Tinoco

New seven-story mixed use development planned for Vermont and Olympic

CurbedLA

 

Yet another large residential development may be on the way to Koreatown. An environmental report published by the Los Angeles Department of City Planning last week details a seven-story project planned for the southeast corner of Vermont Avenue and Olympic Boulevard.

The proposed building would replace an existing gas station, along with a medical office building and an apartment complex with 32 units. The new development would include 228 units of housing (whether they would be condos or rental units isn’t clear yet) and 53,498 square feet of commercial space.

563 automobile parking spaces and a total of 310 bicycle spaces would be housed in a subterranean garage.

Renderings of the proposed complex show it would have a boxy, colorful facade, with plenty of balcony space for residents. Building amenities would include a swimming pool, fitness room, terrace garden space, and a multipurpose room.

If the new development is approved, construction could begin on the project by the end of 2018, with work finishing up midway through 2020. It’s one of at least 40 other major projects planned in bustling Koreatown.

-Elijah Chiland

Expo-Adjacent Offices Getting Underway in Culver City

urbanize.LA

 

A parking lot and a pair of small commercial buildings near the Expo Line's Culver City Station have been fenced off, signaling the start of construction for another commercial development.

The properties, located at 8888 Washington Boulevard, are slated for the construction of a four-story building featuring 68,000 square feet of offices above 6,000 square feet of ground-floor commercial uses.  Plans also call for an automated subterranean parking structure, with accommodations for up to 231 vehicles.

Abramson Teiger Architects is designing the low-rise structure, which is named Synapse.  A project page describe the building as featuring an exterior of custom molded glass fiber reinforced panels, giving it a glossy white appearance.  LED lighting strips will be integrated into the facade, mimicking nerotransmitters.

Runyon Group, the California-based firm behind the adjacent Platform development, is the developer of Synapse.

-Steven Sharp

New transit-oriented apartment complex set to rise in Burbank

CurbedLA

 

A new transit-friendly apartment complex may be on the way to Burbank, just west of the city’s Metrolink station, according to an announcement from architecture firm Newman Garrison + Partners, which has been selected to design the project.

Developed by Cusumano Real Estate Group, the development would rise seven stories and include 327 units of housing, ranging from studios to three and four-bedroom apartments. The project would have a mix of market rate and affordable units, though it’s not clear how much of each would be included.

Retail space and room for “organic grocery offerings” would also be part of the project, which is geared toward “millennials working in the San Fernando Valley,” according to the announcement.

Other building amenities would include a swimming pool and spa, a lounge and game room, an outdoor movie theater, a wine room, a media center, fire pits, and a bocce ball course.

Renderings of the project show it would have a glassy design, with plenty of terraces and balcony space throughout the complex. If all goes according to plan, the project could open by 2021.

-Elijah Chiland

Daily Brief October 09, 2017 unsubscribe

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