This Just In: Broad eyes Downtown for museum

All of Downtown has been abuzz this week after billionaire developer/philanthropist Eli Broad officially announced that a Grand Ave site is also under consideration for his $60 million art museum and foundation headquarters. Just last week, we reported that a strange site in Culver City was Broad's elusive third choice. But the President of neighboring West LA College has heard nothing from Broad's people, so that revelation may have been a distraction.

Broad obviously has very strong ties to--and friends in--Downtown, from his support of the lingering Grand Ave behemoth to his recent $30m bailout of MOCA. Impatient with developer Related Co.'s inability to get things going on Grand Ave, Councilwoman Jan Perry has expressed excitement at the prospect of Broad moving in nearby. The site under consideration is a surface parking lot on the south side of Disney Hall, sunken below street level on Grand Ave. The lot is one of the smaller parcels owned by Related Co., a developer that has been hit hard by the real estate setback, and is waiting for the capital market to rebound before plowing forward. Related would likely get an extension on their city-mandated deadline to break ground if some of the land is sold to Broad's project.

The City of Los Angeles was initially left out of consideration for the museum. In old age and frustrated by a lifetime of red tape, Broad is desperate to expedite this project as much as possible. But Santa Monica's city council isn't voting on the deal until next month - a time frame that may prove to hurt their bid. Some Santa Monicans argue however that the city is offering too many concessions to bring Broad's museum to the derelict Civic Park neighborhood (selling the land for $1, for example); they believe a much better deal can be reached via a developer who has commercial plans for the site. Meanwhile, Beverly Hills, who doesn't even own the property Broad wants, might as well kiss its chances good bye.

Source: Santa Monica Daily Press; Photo: Eric Richardson

Culver City enters running for Broad art museum site

In an interview last week, billionaire developer and philanthropist Eli Broad revealed that a 10 acre site in Culver City is also under consideration for the location of a new museum that would be endowed in his name. When Broad announced plans for the museum back in November of 2008, a site at the southeast corner of Santa Monica and Wilshire Blvds in Beverly Hills was the principle consideration. A year ago however, Broad announced that he was also looking at a 2.5 acre city-owned lot next to Santa Monica's Civic Auditorium. The Culver City site is located along Jefferson Blvd on the West LA College campus.

Broad's revelation was shocking to all, but perhaps more so to Mark Rocha, West LA College's president, who says that he hasn't heard from Broad's foundation. After reading about the competition between Santa Monica and Beverly Hills last year, Rocha wrote the foundation, asking them to consider his site as well. Unfortunately that vacant lot is currently being used as a staging area for the college's capital construction project, and will likely be in use for another 2 years.

But Broad says that at age 76, he wants the project to move fast, with as little red tape as possible. While Santa Monica already owns its site in question, the City of Beverly Hills would have to acquire the parcel that Broad has been eyeing. And whichever city gets the honor of landing Broad's museum would be asked to donate the land, contribute $1m+ in construction fees, provide parking, and pay for landscaping. It is a pricey investment that each municipality believes will be well worth the prestige and popularity of the Broad collection. While Broad has said he is not trying to pit each city against the other to generate the best deal, he is probably selecting jurisdictions based on their ability to expedite the bureaucratic process. The City of Los Angeles, notably but not surprisingly, is not on Broad's short list.

The 50,000 sf facility is to house Broad's 2000 piece art collection, his foundation, storage space, and a research component. The museum would be launched by a $200m endowment, said to sustain a $12m/year operating budget. That bequest would be the largest infusion into Southern California arts, second only to the $2.76b Getty Trust. It is estimated to cost ~$60m.

Source: LA Times

Is Downtown Development Dead?

The vacated construction site is an increasingly common sight in Downtown these days. Los Angeles Magazine recently published a dismal perspective on upcoming downtown growth - "lower your expectations," they say, "construction cranes will be a rare sight for at least several years." When the last touches on the $2.5 billion mega-project LA Live are complete at the beginning of next year, there will be little to get excited about in the area's development scene. The energy behind Downtown's initial renaissance was fueled mainly by two events: the adaptive reuse ordinance of 1999 which allowed underutilized office buildings to be converted to housing, and California's real estate boom which gave area median condo prices their dizzying peak of $790,000. But those prices have fallen a staggering 37% and 17,818 units are sitting unbuilt in development limbo.

The problem with the explosion in adaptive reuse is that there is a limited stock of historic buildings ready for conversion. Enter ground-up development, a trend made apparent by the countless new gleaming residential high-rises gracing the city's skyline, many of which are having trouble leasing up or even finishing construction. LA Live was supposed to be downtown's saving grace - it was a shiny mixed-use behemoth that entered the construction market at a shaky time, but was backed by reliable and committed investors. But those familiar with Jane Jacobs will remember that city redevelopment cannot be spurred by catastrophic events; in fact, these types of additions often cause rifts and boundaries in urban neighborhoods. While the entertainment complex has been hugely successful in attracting valuable credit tenants to an area they have long spurned, LA Live is remarkably inward-facing. The idea was that visitors arriving for concerts, conventions, games and the like would begin to leak through the streets of Downtown, spending money and "knitting" the region together as a whole. But obstacles like traffic and pedestrian-unfriendly streets have made this aspiration unlikely.

New area residents who have helped Downtown to double its population to 38,000 in ten years, might argue that their neighborhoods are already great, or are experiencing redevelopment independent of AEG, the entertainment developer behind LA Live. Great strides have been made in Downtown's comeback, but the reality is that countless units remain unlet. Retailers who were once flocking to open up downtown to fill the increased residential demand, are holding back, or are pulling out altogether. Rite-Aid's closure of its store at 7th and Los Angeles Streets caused massive speculation and debate among locals and in the blogosphere. Ralph's, whose new store at 9th and Flower Streets is one of the chain's highest-grossing, is often cited as one of Downtown's greatest accomplishments, and a sign that more large retailers are coming soon. Unfortunately, national retailers often wait as long as a decade to ensure a market is worth investing in. 'Who needs 'em?' say many residents, who value the impressive collection of small independent retailers who have opened up shop locally in recent years. But the truth is that the presence of the big guys (like the much-wanted Trader Joe's and Barnes and Noble) can contribute incalculably to the validation of a neighborhood.

Many players wonder what happened to the Grand Avenue project that was supposed to be the high-end, culture-rich master plan that anchored the north end of Downtown. Well it too is sitting in limbo for lack of construction loans. Apparently a Gehry-designed superstructure backed by Eli Broad isn't quite what it takes to get something built around here. After LA Live is complete and we start to get a sense of its successes and impacts, eyes will most likely start to turn back to Grand Ave as the next big catalyst for area growth. But that is assuming LA Live is successful enough to hold developers' attention on Downtown. And let's hope the construction climate will turn around at least partially by that time. Until then, we must rely on smaller projects more invested in the area's long term economy to help connect the dots in a confused and fluctuating downtown. Stay tuned.

Eli Broad Taunts LAUSD with Cash for Arts School

Eli Broad recently pledged close to half a million dollars to support the enrollment of minority students at Juilliard, the elite New York City arts academy. This has left LAUSD back home in Los Angeles wondering - where's our money? The billionaire developer-philanthropist has proven his dedication to the city of Los Angeles and to the arts with tens of millions of dollars in donations over the years. He has mentioned an interest in supporting the arts at LA schools before, but this time it is critical. The school district plans to open Central Los Angeles High School #9 - a new flagship arts school - in the fall, but as of yet have no director for the school and little clue as to how to run it.

The school, which is in its last phase of construction, set the district back about $250 million. But because the school was built on the desirable district-owned Grand Avenue lot , an additional $190 million was spent to relocate the district's offices. The school has received much acclaim during construction, both for its proximity to the burgeoning arts corridor on Grand Ave downtown, and for its curious design by Austrian firm Coop Himmelblau. But as the 2009/10 school year approaches, district officials worry about the school's ability to open and operate smoothly.

Joining others, Broad has suggested the school be managed by an outside organization but continue to receive funding from the district. This charter school arrangement has been extremely successful in rehabbing other struggling local schools. But the district refuses. Another option is to delay the opening of the school for one more year, until everyone can truly agree on its mode of operation. But that delay would be costly and inefficient. Construction is nearing completion and the idea of maintaining a vacant school is both embarrassing and depressing. Whatever happens, it has to happen quick - Eli Broad won't be dangling his millions forever. If we don't suit his fancy here, he may just pack up and move back to Detroit. Or worse: New York.

Despite Inner Strife, MOCA Creeps into Little Tokyo

On Monday, The Museum of Contemporary Art announced plans for a major three-story, 90,000 sf expansion, to be built in a parking lot adjacent to their current Geffen Contemporary warehouse location in Little Tokyo. Program calls for 18,000 sf of exhibition space, 6,000 sf of educational space, and a whopping 66,000 sf of storage, to help unload some of the pressure at the Grand Ave location. The plan will be presented to the Zoning Administration on April 14 and will require subsequent approval from the Community Redevelopment Agency, which has jurisdiction over downtown development.

But this comes at a funny time for the museum. Last November MOCA released news of a searing financial quandary, spurred by reckless spending and a shrinking endowment. The institution was bailed out soon after by billionaire philanthropist Eli Broad. But Broad's $30 million gift was an exertion of powerful control, and prompted the resignation of MOCA's director Jeremy Strick. As he has done with LACMA, Broad quickly took the reigns, shuttering the Little Tokyo annex and slashing budget and staff by 20%. Whether Broad has been given or has exerted too much control is debatable and frankly, moot - no one else has his will or spending power.

The project will be a slow one - 5 years until groundbreaking after approval and 18 months of construction thereafter. But with the museum walking on dangerously thin ice, no one is complaining about slow growth. Dubious of bank credit and public contribution, the project will be funded exclusively by private donations. An interesting design feature of the museum's plan is a glass partition system enclosing the storage space, allowing visitors to see pieces that aren't on exhibit. Now if only the museum's frivolous spending practices could be made more transparent.

Struggling KB Home Teams with Disney to Offer Themed Rooms

Fortune 500 homebuilder KB Home, which has been hit particularly hard by the housing crisis, recently announced a collaboration with the Walt Disney Company offering kids' bedrooms designed with specific Disney-related themes. The kids' rooms, which will be optionable in all KB Home developments, will be available in Classic Pooh, Disney Princess, "Cars," or Hannah Montana. The company already offers custom interior design options branded with Martha Stewart, a franchise that never really recovered from the scandal years back.

KB Home, founded by local billionaire Eli Broad, has been riddled with varied suits and trading scandals since 2001. Because of their repeated successes in explosive markets like Texas, Florida, and Southern California, the homebuilder has been dealt a series of heavy blows due to emptied Sunbelt demand.

The arrangement with Disney seems like it would have been a great luxury investment in a time of prosperity. But who's thinking about the theme of their child's bedroom when they're trying to figure out if they can even afford to own a house? Disney has consistently proven itself a marketing genius, embracing breadth and depth in their promotion saturation. What better place to advertise than permanently and pervasively in a child's bedroom? But something tells me KB Home should be putting their creative energy elsewhere...like trying to make people forget about their association with nightmare mortgager Countrywide.