LOS ANGELES | Downtown Project Rundown 6.0

[citywatch]

Here's a good recent view of the broadway station of the new connector line. The stations on bunker hill, at 2nd & broadway & at 1st St & Central....due to probably covid & labor & supply line issues....have taken longer to be completed. Now it's important that the mta & other officials keep the system clean & safe. When the line is extended further west on Wilshire Blvd, that will be even bigger & more important matter. If govt agencies can't do that, billions of $$ will go down the drain.

https://youtu.be/naV8udYrHdw?t=186

[Easy]

Originally Posted by 202_Cyclist

What a ridiculous article. This person is complaining that housing and mixed-use development is going to replace some of the 260 acres of parking if the gondola connecting Union Station to Dodger Stadium is built.

A $300-million (minimum) gondola to Dodger Stadium? Why is Frank McCourt really pushing this?

Bill Shaikin
LA Times
Apr. 30, 2023

https://www.latimes.com/sports/story...-frank-mccourt

I don't know. The gondola costs $300 million and will be free for most riders. It doesn't appear to make financial sense without something else being developed on the parking lots. I also wonder what that could be.

[zonedgreg]

You would be stupid not to build massive mixed-use towers there on the edges of the dodger stadium cliffs looking south. Looking at the new Beaudry tower from Brookfield, they're stuffing about 700 units per acre on their site. If you do something less at like 500 units per acre, that cliff area is about 30 acres or so.. so you could get like 15,000 housing units if you want.

There's no way they would build that much as the traffic impacts would be greater than what the Gondola would help mitigate, but imagine like 10 towers on the edge of those cliffs overlooking the entire southland.

[scania]

I love skyscrapers and all…but it would be really pretty if they just built houses up there like the Hollywood Hills. It could be the Ravine Hills.

[citywatch]

Dtla has been at this rodeo before, but it's disappointing it's occurring all over again 20-40 yrs since its bad ol days. If LA city hall were at least managed by mainly proactive public figures & employees instead of largely reactive ones, that would help & make news like this less worrisome...

caroline brehman/Shutterstock

A major Los Angeles office owner operated by Brookfield Asset Management is struggling to make mortgage payments as vacancies and rising interest rates disrupt the city’s commercial real-estate market. The company, known as Brookfield DTLA Fund Office Trust Investor Inc., owns six Los Angeles office buildings and a retail center. Five of the office buildings face the risk of foreclosure, according to its public filings, and at least two of its mortgages are in default.

Brookfield DTLA’s circumstances also reflect rising vacancies in Los Angeles, one of the country’s biggest office markets. Around 30% of office space in downtown Los Angeles was available for lease at the end of 2022, according to brokerage Colliers, the highest figure of any major U.S. office market. The city’s central business district is struggling partly because of its long commuting distance to many residential areas and because of rising fear of crime, said Dylan Burzinski, an analyst at real estate analytics firm Green Street.

this person on local news must be referring to the article above. But her segment focuses on ongoing negative news affecting the largest city to LA's north. Ppl managing dtla, from city officials, businesses, landowners to various residents had better be alert & protective. If the city of cable cars & the golden gate can be hurt, dtla is no less vulnerable.

https://youtu.be/l65kuckLpeA?t=73

[headcheckjj]

Drove by and saw a FOR SALE sign on the lot where this was to be built:

https://la.urbanize.city/post/downto...tower-proposal

So, I guess that project is dead?

[HeySparky]

Originally Posted by headcheckjj

Drove by and saw a FOR SALE sign on the lot where this was to be built:

https://la.urbanize.city/post/downto...tower-proposal

So, I guess that project is dead?

I would assume all future Relevant projects are dead. Their funding was through EB-5 visa program meaning it was from Chinese investors, which is a pool of funding that no longer exists. I also noticed they have vacated their office at 1605 N Cahuenga Blvd, which is currently listed as available. And now with ULA nobody will be buying any of these large scale projects—so don't expect a new developer to jump in either.

https://www.latimes.com/business/sto...ancing-dispute

https://la.eater.com/2023/2/15/23600...demark-lawsuit

[citywatch]

In order for new projs to get off the ground, they need investment money. Just as most homeowners could never buy their house without financing from a bank or mortgage company, the same thing applies to new devlpt, whether highrise or lowrise office projs, residential towers, retail spaces.

• Video Link

Projs like the Colburn school's expansion at 2nd St & Olive...already hurt by LA city's engineering dept....or the new museums going up in Expo Park are certainly affected by supply line issues, problems with contractors, lack of suitable employees. I wonder how the Angel's landing proj proposed for 4th St & Hill will weather the storm? I'm guessing the apt tower originally planned across the street from it by Equity Residential was likely cancelled because of a lack of enough investment sources.

[headcheckjj]

Well, in some good news, Brookfield is getting a good restaurant tenant at the new Beaudry tower:

https://la.eater.com/2023/5/3/237098...s-news-beaudry

[scania]

Originally Posted by headcheckjj

Well, in some good news, Brookfield is getting a good restaurant tenant at the new Beaudry tower:

https://la.eater.com/2023/5/3/237098...s-news-beaudry

This will be another welcome addition to DTLA. 10 years ago, you really didn’t hear people around LA saying let’s go downtown to have dinner. Boy how things have changed…you hear people saying all the time let’s downtown, Silverlake, West Hollywood, etc. to have dinner. DTLA was never in that conversation. It is now though, and it’s great for the community.

[craigs]

Construction goes vertical for micro-unit development at 1411 S Flower Street in DTLA

Plans call for an eight-story building with 227 apartments

Steven Sharp
Urbanize Los Angeles
April 3, 2023

A year after commencing work just south of Metro's Pico Station, the frame of a new micro-unit apartment complex from Housing Diversity Corp. is now starting to take shape in Downtown Los Angeles.

The project, now rising at 1411 S. Flower Street, will consist of an eight-story building featuring 227 apartments upon completion. The property would consist entirely of studio units, with average size of 265 square feet.

Housing Diversity (HDC) entitled the project using Transit Oriented Communities incentives to permit a larger building than would normally be allowed by zoning rules. In exchange, the project will include 26 apartments set aside as affordable housing priced at the extremely low-income level.

Steinberg Hart is designing the contemporary podium-type building, which will feature an amenity deck at its roof level, as well as a ground-floor courtyard and a breezeway.

Though not planned as affordable housing, the building may in fact wind up offering lower-cost accommodations than other new Downtown developments. In February 2021, HDC chief executive officer Brad Padden told Urbanize that 1411 Flower Street is expected to cater to households earning between 80 and 120 percent of the area median income.

The Downtown projects are among a handful of Los Angeles-area developments for HDC, including new buildings planned or under construction in Koreatown and Hollywood. The company is already at work on a similar 137-unit complex a few blocks to the east at Grand Avenue.

[craigs]

A couple images:

[citywatch]

Gary Coronado / Los Angeles Times

The Los Angeles City Council approved two major zoning plans for downtown and Hollywood on Wednesday that, if successful, would bring as many as 135,000 new homes to those areas over the next 20 years.

Both planning documents, shaped in the wake of the COVID-19 pandemic, will offer new safeguards for staving off displacement, city officials said. Both feature new strategies for spurring the construction of affordable housing — apartment buildings where at least a portion of the units have rents below market rate. Those units would need to remain affordable for 99 years.

In Hollywood, developers of properties on some of the city’s busiest boulevards — such as Hollywood, Sunset and Cahuenga — will receive permission to build much larger buildings than otherwise allowed if they include a percentage of affordable units in their projects. In downtown, the council approved an “inclusionary” housing system, requiring that newly constructed residential projects include at least a percentage of affordable units. In many instances, developers would be allowed to make their projects larger as long as they incorporate a greater number of affordable units, planning officials said.

The inclusionary requirements would not apply in cases where office buildings or manufacturing space are converted into housing.

The council also opened the door to residential development in a portion of skid row bounded by 5th Street on the north, 7th Street on the south, San Pedro Street on the west and Central Avenue on the east. However, in that area, developers would still need to construct projects that are at least 80% affordable — a threshold that’s much higher than in other parts of downtown.

Wednesday’s vote delivered a major victory to the Garment Worker Center, which had been fighting for new regulations to ensure sewing factories and other apparel-related businesses are not pushed out by new development. That group, which belonged to a coalition that included Unite Here Local 11, the politically powerful hotel workers’ union, won new restrictions on residential development and new hotels in parts of the Fashion District.

Business groups warned that those changes would render up to 12,000 residential units in the DTLA 2040 plan economically unfeasible, at least for the foreseeable future. That, in turn, will make it more difficult for downtown to reach its target of 100,000 new units, said Anthony Rodriguez, executive director of the Fashion District Business Improvement District. “I’m just not sure how they’re going to go about finding developers that are interested in building new housing” in much of the Fashion District, he said.

De León said downtown is doing more to address the housing crisis than any other part of the city, in part by establishing an inclusionary zoning system. “We’re not just talking the talk about building inclusive communities, we’re actually walking the walk,” he said. “Because if we truly want to be a progressive city, we can’t just theorize or tweet about it. We actually have to do something about it that’s real and tangible.”

Council member Marqueece Harris-Dawson, who heads the council’s planning committee, also praised the plan’s focus on developing new apartments with restricted rent. “Somebody somewhere down the line is going to move into an affordable unit downtown that would not have appeared if we had not done this work,” he said. “The market would not have produced that.”

If devlprs of residential in dtla are now required to include subsidized units for all proposals, projs in the future similar to the 2 apt towers near the corner of 8th St & Fig may not pencil out as easily? The devlpr of the Beaudry apt tower is already struggling with debt & I wonder if Mitsui's 2nd apt proj west of Whole Foods may now take even longer to actually go forward? Or, as with Equity residential's apt proj at 4th St & Hill, Mitsui may cancel their proj entirely?

The long stalled oceanwide proj on Fig St is a reminder going back yrs that when capital dries up, an economy in general starts freezing up too.

[zonedgreg]

Yes you're right that they may be a little tougher to pencil as your weighted average rent decreases. This may cause the developer to increase the rent on the market rate units even further. However, it's almost guaranteed 100% occupancy for the affordable units so there is added security there from the lender's standpoint - and you can value engineer the shit out of those affordable units from an FF&E perspective. Additionally, parking minimums have been eliminated in DTLA now so for the affordable units the developer might build much less parking which obviously increases ROI. Parking garage costs, especially underground, can be anywhere from 20-30% of the project's construction costs - lowering that significantly will help bring rents down and make more projects pencil.

Additionally, any projects that are already in the process to get permits are grandfathered into previous zoning code development parameters. If the developer like Mitsui with their 8th Grand and Hope project wants to take advantage of new zoning laws, they must resubmit their project. Mitsui has owned the DTLA land at their development sites for a long, long time - I think since the 80s in the case of their 8th and Fig development. They seem like they're in DTLA for the long run and will get the job done with regards to their new development at 8th Grand and Hope.

lastly, I'm pretty sure the Oceanwide project is all condos - they're not going to be affected by for-rent apartment zoning law changes. They also stalled not because of a freeze in debt markets here in US but because a few years ago Beijing stopped domestic capital outflows from Chinese developers to international markets. That's one of the few reasons, in addition to the Huizar scandal, that many of those chinese developers' projects in the 2010s never got built.

[craigs]

Originally Posted by zonedgreg

Yes you're right that they may be a little tougher to pencil as your weighted average rent decreases. This may cause the developer to increase the rent on the market rate units even further. However, it's almost guaranteed 100% occupancy for the affordable units so there is added security there from the lender's standpoint - and you can value engineer the shit out of those affordable units from an FF&E perspective. Additionally, parking minimums have been eliminated in DTLA now so for the affordable units the developer might build much less parking which obviously increases ROI. Parking garage costs, especially underground, can be anywhere from 20-30% of the project's construction costs - lowering that significantly will help bring rents down and make more projects pencil.

Additionally, any projects that are already in the process to get permits are grandfathered into previous zoning code development parameters. If the developer like Mitsui with their 8th Grand and Hope project wants to take advantage of new zoning laws, they must resubmit their project. Mitsui has owned the DTLA land at their development sites for a long, long time - I think since the 80s in the case of their 8th and Fig development. They seem like they're in DTLA for the long run and will get the job done with regards to their new development at 8th Grand and Hope.

lastly, I'm pretty sure the Oceanwide project is all condos - they're not going to be affected by for-rent apartment zoning law changes. They also stalled not because of a freeze in debt markets here in US but because a few years ago Beijing stopped domestic capital outflows from Chinese developers to international markets. That's one of the few reasons, in addition to the Huizar scandal, that many of those chinese developers' projects in the 2010s never got built.

Good post, thanks for bringing up these important points.

[Quixote]

Originally Posted by craigs

A couple images:

I will take 1,000 of these all crammed next to each other over 100 skyscrapers.

[craigs]

source

[colemonkee]

Went to an event at the Convention Center last night and walked over to El Cholo for dinner. Once it opens, the Oceanwide project is going to do so much to invigorate that area when there's not an event at Staples. And the full motion digital screens now lining Figueroa really are quite impressive in person.

[citywatch]

Originally Posted by Quixote

I will take 1,000 of these all crammed next to each other over 100 skyscrapers.

Unlike a NYC or hong kong, etc, a city like this isn't famous for skyscrapers. But in terms of prestige & attractiveness it swamps highrise canyons. But to each his own....however, when ppl complain that a new proj in dtla isn't taller or seem apathetic about shorter projs that are at least removing deadzones, I go, 'huh?!'

https://a.travel-assets.com/findyours-php/viewfinder/images/res70/506000/506659-eiffel-tower.jpg

^ btw, cities similar to that, going back to the late 1800s or early 1900s, have never had the mess that LA's DWP installed all over the city, including parts of dtla. Such as 9th St between the offramp of the fwy & Fig St. Really, LA? And if the ppl of the city...at city hall & elsewhere, can't also take care of crime, homelessness, graffiti & dirty streets full of tents & the smell of piss, they must want their town to commit urban suicide.

Originally Posted by colemonkee

And the full motion digital screens now lining Figueroa really are quite impressive in person.

I recall when that stretch of Fig was totally desolate, not ready for prime time, tourists, daytrippers & visitors to the convention ctr back then formed their impression of dtla on such areas, which made me wince.

However, SF to the north, which has always had a reputation as a place where ppl leave their heart in, is showing that if a city allows the basics to fall apart, built in advantages of climate, landscape & scenery get lost in the shuffle. SF has also had things like BART going back for over 40-50 yrs, while LA is still extending the subway down wilshire blvd. But if LA's mta can't keep transit safe & clean, that won't matter in the long run.

[craigs]

An article in today's Los Angeles Times on statewide housing construction in 2022 had a couple of interesting statistics.

First, California constructed 123,350 new housing units last year, the highest number in 15 years, and more than 20,000 of those were ADUs.

Second, "Los Angeles" (I think this means LA County, not the city proper) constructed 12,074 new multifamily units in 2022, which accounted for 62% of net housing growth (in the county). A quick calculation shows that means that LA County constructed 19,474 new housing units last year.