Revisions Coming on Grand Avenue Plan

Development firm Related has officially stepped away from the original vision for the Grand Avenue plan, which included two towers designed by architect Frank Gehry. This Gehry design was approved in February 2008. 

DOWNTOWN LOS ANGELES - The real estate development firm Related’s long-delayed plan to build a $2 billion Frank Gehry-designed hotel, housing and retail complex on Grand Avenue has been off the table for several years. Now, a new proposal is finally coming into focus.

Related faces a Feb. 15 deadline to break ground on the site across from Walt Disney Concert Hall known as parcel Q. The firm will instead ask for a third extension on that deadline, said Bill Witte, president of Related California, which in 2007 won the development rights for the project.

The Grand Avenue Authority, a city-county panel that oversees the property, has already granted Related two-year extensions in 2009 and 2011. This time, however, instead of simply asking for more time to wait out the sour economy, Witte said Related will suggest building on the property in phases.

The credit markets will not underwrite the kind of massive mixed-use project that was approved in 2007, Witte said. So the company will propose moving forward first with a residential tower on a portion of the site, likely near Second Street and Grand Avenue. The rest of the property would be developed in later stages, adding different uses according to evolving demand, Witte said.

“There would be some flexibility built in to accommodate the market so that we can actually accomplish over time the objectives we originally sought, which was a vertically integrated mix of uses on this site,” Witte said.

Related’s plan for the residential tower is in the early stage and remains fluid. Witte said the structure would be comparable to its project that broke ground on Jan. 10 a half-block south on Grand Avenue, next to the under-construction Broad art museum. The $120 million, 271-unit, 19-story apartment building will have 20% of the residences set aside as affordable housing. All of the residential projects in the Grand Avenue development must contain the 20% affordability component, per Related’s deal with the city and county.

The parcel Q tower could go taller than 19 stories, Witte said, and the firm is considering a hybrid building that would blend condominiums on the upper floors with apartments in the rest of the structure.

Gehry’s connection to the Grand Avenue development also remains uncertain. Gehry was hired to design the parcel Q project, but his contract with Related expired years ago. Witte said Related has not re-entered talks with the architect who designed the iconic Walt Disney Concert Hall.

The revised approach to parcel Q is subject to the approval of the Grand Avenue Authority, which is scheduled to meet on Jan. 28. The board has the right to ask for changes or simply deny a deadline extension to Related, a move that would essentially sever ties with the developer. That scenario appears unlikely.

County Supervisor Gloria Molina, who chairs the authority, recently told Los Angeles Downtown News that she wants to continue the partnership with Related, which had already spent $56 million on Grand Park before starting work on the parcel M tower. Unlike previous deadline extensions, however, Molina said she will expect Related to offer some kind of proposal to move forward with a feasible alternative for parcel Q.

That’s exactly what Related believes it has.

Ninth District Councilwoman Jan Perry, who was replaced on the Grand Avenue Authority by 14th District Councilman José Huizar after redistricting, said a phased approach for parcel Q seems sensible.

“Nobody could have predicted the worldwide recession” that hobbled the original Grand Avenue plan, Perry said.

The new approach, she said, is “far more realistic because, when the window of opportunity in the real estate market opens, they will be in a better position to respond to market forces and finally get those parcels developed.”

In 2009 and 2011, when Related secured its extensions, detractors including Supervisor Mike Antonovich suggested ending the relationship with the developer and rethinking the entire Grand Avenue project vision. Related and its supporters have countered that it was not alone in its failure to finance and build a mega-project conceived toward the end of the real estate boom.

In 2007, the Grand Avenue project was among a handful of mega developments planned in Downtown. They included IDS Real Estate Group’s Metropolis, David Houk’s Park Fifth and the Moinian Group’s L.A. Central. Like parcel Q, all three of those sites remain parking lots.

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