NFL is Back! But Not Where You Think

The Los Angeles Times reported today that the construction of a privately funded $800 million stadium to host an NFL team was approved by the city council. The City of Industry council, that is. The council voted 5-0 to approve the EIR for the project, which would inhabit 600 acres of industrial wasteland about 25 miles east of downtown Los Angeles. The site in question is a wide railroad right-of-way near the interchange of California routes 57 and 60, and close to a Metrolink train station.

Neighboring cities Walnut and Diamond Bar have voiced concerns over increased traffic and decreased quality of life, and they have 30 days to file suit against the project, if they so please. Those two suburban towns are relatively affluent, and it is almost a jurisdictional glitch that they border the City of Industry, a town that is zoned almost completely for industry, has no business tax, and has a meager population density of 63/sq. mile. The story isn't new - Industry was incorporated in the 1950s as a dumping grounds for development that no one else wanted.

The project will be developed by Majestic Realty Co., which is headed by local real estate billionaire Ed Roski. Roski, who built the Staples Center and has stakes in the LA Lakers and LA Kings, will most likely purchase a majority stake in the chosen NFL team in order to facilitate a smooth move to the new stadium. While locals favor a return of former LA teams Raiders and Rams, the moving team is yet to be determined. Prior to the selection of the Industry site, officials were considering moving the team into either the LA Coliseum or the Rose Bowl as a no-build alternative. But the 1932 Coliseum was deemed helplessly out-of-date and the Rose Bowl option was vehemently opposed by Pasadenans. The City of Los Angeles on the other hand had been desperately lobbying to host the team, but in the end, the new construction on cheap land proved more attractive. However, some (notably, the FBI) have implicated Roski in a slew of shady dealings with the City of Industry - snubbing out competing developers and securing the land at a below-market rate. The FBI are not to be taken lightly...but neither are the millions of football-hungry southern Californians!

Bev Hills Gets a Taste of Hollywood

As if the hulking CAA (Creative Artists Agency) headquarters in Century City wasn't enough, William Morris Agency, another high-profile talent agency, is building a blockbuster landmark building in the heart of Beverly Hills' pricey Golden Triangle. While more modest in scale, this newer construction is one-upping its predecessor in design - the long, sleek glass block was designed by Gensler. Renderings show six stories with a partial green roof and a bright, open ground-floor lobby. Tishman is the construction manager for the 200,000SF building owned by Beverly Wilshire LP, and set to be completed in 2010.

The sheer breadth of the construction site made us cringe at the prospect of another 'Montage' - the giant mediterranean residential complex across the street. Both projects seem out of scale for the tight low-lying commercial spaces that abound, but the adjacent Wilshire corridor is admittedly very high-built. The Montage does have one redeeming quality - the public green space linking Beverly Dr. to Canon Dr., though it was probably mandated by the city of Beverly Hills.

The agency isn't moving far - the original office is located down the street on Wilshire Blvd., behind ritzy Via Rodeo and pretentiously addressed at 'One William Morris Place.' Beverly Hills is traditionally the home of talent agencies, most likely because of the cache and centrality of the zip code. But William Morris' development stands out because of a) its show-stopping contemporary design and b) its lavish use of prime urban real estate. Someone once said that when a company builds an expensive landmark headquarters, it's facing the last of its days. For the sake of all the high-profile acting stock in this town, let's hope that isn't the case here.

NoHo: What Recession?

When visiting North Hollywood these days, one is unavoidably greeted by a thicket of construction cranes and high-rise steel skeletons. The scale of development here seems to have actually increased in the past couple of years, almost resembling its namesake brother to the south in the early 2000s. But if you look closely at the street banners, you’ll notice that this neighborhood has been designated as the NoHo Arts District. And the City of LA has done a fairly good job at marketing it as such and attracting small art galleries, stage theaters, and even bigwig entertainment offices like Disney Interactive Media and the Academy of Television Arts & Sciences. But of course, with the establishment of an arts community, comes the inevitable influx of trendy, market-rate condos.

The most obvious of these newcomers is NOHO14, the massive residential tower located across the street from the Metro station. Having opened in October 2008, this upscale loft complex is having difficulty filling units however, with occupancy at just 20%. Opposite the station lies NoHo Commons, a large mixed-use village with medium-density housing in back and retail along Lankershim Blvd (including a spin-off of the famed Hollywood wing joint Big Wang’s). The latest and boldest however is phase III of NoHo Commons, a freestanding structure located one block further south on Lankershim. Essentially in the backyard of the Academy of Television, what was a patch of dirt in September is now an attractively imposing tower. NoHo may be experiencing a real estate renaissance, but the scale and ambition of the Metro mixed-use office/hotel/retail/residential development above the Red Line subway station, to be developed by Lowe Enterprises, is absolutely insane. Best of luck to ‘em.

The majority of this new construction was spurred by the arrival of the Metro Red Line subway in 2000. But CRA/LA, the non-profit community redevelopment organization, designated North Hollywood as an immediate intervention zone because of overcrowding and slum conditions in 1979! Today, slum is the last word that comes to mind while strolling down Lankershim Blvd, which is lined with cute restaurants, high-rise condos, and shiny office buildings. The neighborhood has maintained its uniqueness over the years, partly because it is somewhat off-the-map and not easily discoverable. New construction seems to be taking place exclusively on vacant lots, rather than replacing existing lower-density housing, which continues to exist outside of the commercial core. The resulting mixture of residential and commercial uses is interesting and dynamic. Despite a seemingly reckless building boom, the area is ripe for new development, especially in the moderate density range. Who knows – maybe NoHo will be the next valley neighborhood to join the high-rent ranks of Studio City and Sherman Oaks.

Mid-City Hole in the Ground…Still Just a Hole in the Ground

Ever driven by that gaping wide expanse of dirt and grass near the confluence of Venice, Pico, and San Vicente Blvds. and wondered – “Who owns this land and what is going to be here?!” Apparently Lowe’s home improvement retailer earmarked $18.5 million in 2006 for an outlet on the site, dubbed ‘Midtown Plaza.’ According to the company’s press website, the project was expected to be completed in winter 2008!

Adjacent to the site, on a triangular lot fronting against Pico Blvd. and San Vicente Blvd. is a small retail mini-mall with a crowded bus terminal and no visible parking. The tenants include Wells Fargo and Panda Express. The Flatiron shape of the intersection and the prominent placement of a billboard for Spa Luce (?), give the building a Times Square-wannabe feeling. Adding to this aspiration is the rendering on Mayor Villaraigosa’s website, which also touts an initial $114 million investment and development by CIM Group.

According to most sources, the project was supposed to be completed all together, with two big box retailers stacked on one another and smaller retail at the front, reminiscent of the West Hollywood Gateway at Santa Monica Blvd. and La Brea Ave. Maybe the project lost funding after the first phase or maybe the large tenants dropped out of the running. Don’t think Lowe’s is slowing down its expansion though – in 2009 alone it has announced 19 new store openings. (Don’t they know that consumers can’t improve homes they don’t own anymore?)

Either way, the only action this lot has been getting is a periodic spray-down by a water truck…airborne dust never looks good to prospective buyers.

USC Specific Plan Lambasted at Scoping Meeting

Last Wednesday night, USC and the City of Los Angeles participated in an early part of the EIR and CEQA process – the public scoping meeting. The meeting, which was presided over by the district’s city planner Arthi Varma, was split into three segments. In the introduction, Varma outlined the intentions of the university in its expansion into university-owned properties to the north, south, and east of the core campus. Then the attendees, who included students, community residents, and local business and property owners, were encouraged to mingle about the various information tables and ask questions of the university’s representatives. Lastly, and most time-consuming, was the community feedback forum, where attendees were given the opportunity to voice their concerns and suggestions for the expansion.

The statements, which were limited to two minutes, consisted mainly of frustrated community members who condemned the university’s expansion. A number of heartfelt testimonies of displacement and gentrification were met with fervent applause, which was technically forbidden. There were a number of speakers who supported the university, especially its community outreach activities, but these speeches were not as passionately received. Almost nothing was heard from local property owners, who must be concerned about a potential vacuum created in student demand if the university accommodates more students.

For better or worse, as the chief employer and investor in this downtrodden neighborhood, USC has the upper hand. New construction will only take place on property already owned by the university – it is not interested in (nor can it afford) acquiring new outlying properties. USC is responding to higher demand created by a student population that increasingly wants to live near campus. Of course construction of this scale will have effects outside of its bounds, but that is one of the side effects of densifying cities. Whosever side you are on, it is of interest to note that almost nothing was said of the actual environmental impact of the project, except for a brief mention of increased traffic on Jefferson Blvd.

PS. Student housing is one of the only recession-proof development investments…as pockets flatten, enrollments bulge. So if you’re not in there, get in.

If You Build It, They Will Come

When we first heard those words whispered by a disembodied voice in the 1989 corn comedy, “Field of Dreams,” no one knew it would be endlessly mangled and recycled, cementing itself in our everyday American vernacular. But perhaps more interestingly, it has become the all-too-apt mantra for the real estate development world. It suggests the creation of demand – we don’t know we want the baseball field until we have it. It also reflects on a time in our history when consumer demand, material supply, and available capital were all abundant. Yes, times are hard, but they’re not going to get any better if we just sit back and complain. Observing the pace and frequency of new construction in a given market is a great way to gauge not only the climates for development and construction, but also financials, housing, retail, natural resources, and personal finance.

And Los Angeles is a fascinating market. It is the largest U.S. municipality by area and second largest by population. It is one of the fastest growing large cities and supports a diverse and robust array of industry and demographics. Los Angeles has experienced two major booms, the 1920s oil and aerospace rush and the 1950s postwar housing frenzy, and was one of the biggest victims of the recent real estate collapse. Because of progressive (though overdue) planning, the city’s architecture reflects a number of periods and styles. Historic preservation is increasingly important and popular, not in a stuffy museum way, but in the smart ‘adaptive reuse’ instated downtown. A gross housing shortage means stable and continued growth in that sector and perennially nightmarish traffic means increased density everywhere.

While the timing may not be perfect, this city definitely deserves a second look (if not a new building or too). So NIMBYs and tycoons unite! We’ll be cruising from Downtown out to Santa Monica, and from Culver City up to the Valley. Throw on your hard hats – it’s gonna be a wild ride.