DOWNTOWN LOS ANGELES - A Fashion District property owner is in the very early stage of planning a transformation of 10 acres of mostly unused produce warehouses into a $1 billion hub of housing, office space, hotel rooms and a college campus.

The proposal to reinvent the 1909 produce mart known as City Market is in its infancy, project organizers say. It would require an environmental impact report and, at the earliest, an initial phase of the project could break ground in mid-2014, said Peter Fleming, president and CEO of City Market of Los Angeles.

The project site comprises the blocks bounded by Ninth, San Pedro, San Julian and 12th streets. The plan calls for a campus anchored by a college-level institution that focuses on fashion, architecture, design, culinary arts or another creative industry, Fleming said. It would also include 945 housing units, 210 hotel rooms, 225,000 square feet of retail and 295,000 square feet of creative office space. The plan was first reported by the Los Angeles Times.

“We looked at the area and tried to assess some needs and think that we can help the entire city by providing goods and services and amenities to the local community and citywide,” Fleming said.

City Market officials have been meeting with Downtown and Fashion District stakeholders in recent months to share plans. Among the early supporters is the Fashion District Business Improvement District, said Kent Smith, the BID’s executive director.

Currently, City Market is somewhat of a dead zone in the heart of the otherwise busy district. It also is between two of the area’s most important commercial anchors in the San Pedro Wholesale Mart and Santee Alley.

“It sits in the most vibrant part of the district and we’re in desperate need of the infill,” Smith said. “It’s a missing piece of our body. It’s not just a missing tooth.”

Fleming said he plans to initiate the environmental review process in the coming days. While Fleming intends to secure entitlements from the city to develop the entire 10-acre site before any construction begins, the project would likely rise in phases over as much as 20 years.

Still, he said, a first phase could break ground as soon as mid-2014. During the entitlement process, project organizers will also begin engineering and design work for a 150-unit residential phase. That way, once approvals are in hand, construction could begin on that portion, Fleming said.

Dying Fruit

The corporation that owns City Market has controlled the site since it opened in 1909. It functioned as a produce wholesale district until 2009, when business withered under new food safety and distribution standards. Instead of investing in facility upgrades, City Market officials opted to look toward a better use for the land, Fleming said.

According to a study compiled by land-use giant AECOM for the Fashion District BID, the area may be able to support a mixed-use development like City Market. That 2011 report found that the area could immediately hold at least 75 hotel rooms to house travelers who visit the district for the wholesale fashion business. The study also estimated support for up to 1,340 additional housing units over the next 30 years. There are currently 725 market-rate residences in the Fashion District, according to the AECOM study.

The educational component is seen primarily as an asset that would populate the area, helping to support neighborhood retail much like SCI-Arc has spurred growth in the Arts District. Still, Fleming said officials do not have a particular school in mind.

“We’re going to go in search of the right institution,” he said. “We feel that there are many that would like to have a presence here.”

The preliminary stage of the effort means there are many unanswered questions, including how the landowners would finance the project. While officials plan to handle the initial 150-unit residential phase in-house, the remainder of the site could be done in partnership with a veteran developer. The group will also consider divvying up the 10-acre property into smaller parcels, then grant long-term ground leases to developers.

“It’ll be entitled with a 20-year development agreement so we can respond to the market differently,” Fleming said.

City Market’s plan to tackle a massive development in phases is part of what could be a new trend in post-recession mega-projects. Grand Avenue project developer Related recently canned its $2 billion plan approved in 2007 for a major mixed-use complex across from Walt Disney Concert Hall. Instead, it is proposing a scaled-back development with housing, hotel rooms and retail that would be done in phases, according to market demands.

Contact Ryan Vaillancourt at