^ When I heard that the Grand Ave proj's completion date was in 2011, I was hoping that referred to the 2nd phase. But, unfortunately, no. So the proj will require more than 3 solid yrs from today til it's finished?!
But I'm gonna go
over actual demolition finally----FINALLY!!!----beginning on the fugly parking structure. That alone will be worth the price of admission.
Grand Avenue Groundbreaking Delayed
Developer Says $3 Billion Project Still on Schedule, With First Phase to Open in 2011
by Anna Scott
A groundbreaking ceremony for the $3 billion Grand Avenue project has been pushed back from March until at least the summer, officials with developer Related Cos. confirmed last week. It marks the third time that the public kickoff for the massive Bunker Hill effort has been postponed. However, Related Cos. President Bill Witte said the development is on track to meet its most recently announced timeline, with phase one slated for completion in 2011. He also maintained that the project's financing is in order.
"The groundbreaking is more of a symbolic event," Witte told Los Angeles Downtown News last week.
"It has little to do with where we are in the project schedule. We are continuing ahead, and we have the wherewithal to do it."
Designed by architect Frank Gehry, the 3.6 million-square-foot development - dubbed The Grand - is expected to eventually bring 2,600 housing units, 449,000 square feet of retail, a hotel, a grocery store and a health club to Downtown Los Angeles. The approximately $1 billion, 1.3 million-square-foot first phase of the development will include a 48-story Mandarin Oriental Hotel & Residences with 295 rooms and 266 for-sale units, a 19-story residential tower with 126 market-rate apartments and 98 affordable units, a 250,000-square-foot retail pavilion and 16-acre civic park. The towers will rise across from Walt Disney Concert Hall on the site of a current multi-level parking lot.
Related initially set the groundbreaking for October 2007, but subsequently moved it to the end of the year. As that date neared, developers said that the ceremony would take place by March. That was recently amended to an unspecified date in the summer.
The repeated delays have led some in the real estate industry to speculate that the project is facing financial uncertainty. That comes amid the nationwide credit crunch and a softening of the housing market.
"These ceremonies are important on a number of levels," said a Downtown figure experienced in large projects, who asked to remain anonymous because he did not want to publicly criticize another development. "If you're not quite there with your funding, it's often far too risky to state that you're going to start. You don't want to take the financial hit if you have to scale back your project in any way."
Marty Collins, CEO and president of Gatehouse Capital Corp., developer of the under-construction $600 million hotel, retail and condominium complex W Hollywood Hotel and Residences, agreed that for large-scale projects, construction financing is typically in place before holding a groundbreaking ceremony. But, he said, a
groundbreaking delay could also reflect various considerations beyond the construction schedule. "Historically, groundbreakings have been events that are tied to the commencement of construction," Collins said, "but more recently, these are largely ceremonial marketing events."
Despite the delays, Witte maintains that the project is financially stable. "The most important part of these deals is equity, which we anticipate to be 25% to 30% of the cost" for phase one, he said. "That is in place. As we begin site work, we will then get a construction loan to provide the balance of the financing. The issues in today's markets are not construction loans per se, but rather the equity that underpins them. As far as we are concerned, we have the necessary financing in place."
Securing that remaining funding in the slowing market, however, could come with additional hurdles, said Jack Kyser, senior vice president and chief economist for the Los Angeles County Economic Development Corp. "They are in a somewhat unusual spot," Kyser said of Related Cos. "Right now, you have a financial system that has almost completely seized up. There is so much fear of risk, they are probably going to leap over higher hurdles."
Still, he added, the developer is probably in a better position than most. "Related has a track record." Kyser said. "They will probably get their funding, but they're going to burn a little more midnight oil than they planned on."
Staying the Course
Despite the uncertainty in the real estate industry - including in Downtown, where several condominium projects have slowed or changed course to rental units - Witte said there are no plans to downsize or alter The Grand.
"Nobody who's in real estate today isn't somewhat concerned about the environment," said Witte, "but I do believe that even in this climate, Downtown is faring as good or better than other sub-markets. The way things have played out, we would rather be where we are than opening at the end of '08. We also know that we are getting very, very strong responses for an incredibly high-caliber level of retail and restaurants.
We're doing better than we thought we might."
Last month,
Related began lead paint abatement on the parking garage at Grand Avenue and First Street, which the company expects to demolish on schedule next month, Witte said. Construction on the $50 million park is expected to begin in the fall, with the opening slated for 2010. The hotel and retail pavilion are scheduled to debut in early 2011, and the residential towers are anticipated to open that summer.
In the meantime, Ninth District Councilwoman Jan Perry, who has been closely involved in the plan's development, said that any speculation about the project potentially changing course is "premature." "I think most projects built in this city of this magnitude always experience bumps in the road," said Perry, who noted that Related paid for the park up front. "This is not a situation that is unusual."
Related will likely hold off on setting a specific date for the groundbreaking ceremony until demolition of the parking garage is complete, Witte said.
"Because this is such a protracted schedule, we want to be really into the ground-up construction before the groundbreaking," said Witte. He added, "If we start and there's a two-month delay, you'll all be calling again, asking what's going on.
"No matter what we do, we assume that we're going to get questions about the status of the project until we're finished."
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