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Grand Avenue Project to Be Scaled Down - Los Angeles Downtown News - For Everything Downtown L.A.!: News

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Grand Avenue Project to Be Scaled Down

Developer Looks to Delay Gehry-Designed Towers, Again, and Proceed Instead With Single Apartment Building

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Posted: Wednesday, February 9, 2011 12:00 am | Updated: 12:30 pm, Mon Nov 25, 2013.

DOWNTOWN LOS ANGELES - Related Companies, the developer of the long delayed, $3 billion Grand Avenue mega project, is working on plans to fast track a scaled down residential tower originally tied to a later phase.

The firm had been facing a Feb. 15 deadline to break ground on the Frank Gehry-designed first phase of the project. On Monday, the Grand Avenue Authority, a joint city county panel overseeing the project, is slated to consider a two-year extension that Related has been seeking since August.

But as Related looks to buy more time for phase one, which would add two luxury residential towers with a boutique hotel and 250,000 square feet of retail, it is actively working on plans for an apartment tower on a different parcel.

“We are working on a proposal for the Grand Avenue Committee and joint powers authority ultimately to consider that we believe would be financeable and feasible in today’s climate,” said Bill Witte, president of Related California.

The tower would rise on what is currently a surface parking lot on lower Grand Avenue, south of Gen. Thaddeus Kosciuszko Way and the planned Broad Art Foundation museum. The site, known as parcel “M,” is owned by the Community Redevelopment Agency. The phase one parcel, immediately east of Disney Hall, is owned by Los Angeles County.

The site was environmentally cleared for two condo towers of up to 35 stories. But Related, which is working with the CRA on schematic designs for the tower, now envisions a shorter apartment tower, likely between 20 and 23 stories, Witte said. Twenty percent of the units would be reserved for affordable housing.

Councilwoman Jan Perry, who sits on the five-member Grand Avenue Authority, said she is in favor of the proposed tower if it proves financially feasible.

While demand in the condo market doesn’t support the cost of new construction, current economics may support a purely rental project, said Witte. He pointed to 717 Olympic and the Watermarke Tower in South Park as examples of recent new rental projects that have worked in Downtown.

There remains no concrete timeline or budget for the new proposal. The new tower, which does not yet have an architect, would still require financing. Related is expected to submit schematic designs for the tower to the CRA this month.

Same Waiting Game

Related’s request for a two-year extension to break ground on phase one — which occupies the county owned parcel “Q” — is just the latest in a long string of delays. The firm was supposed to break ground in 2007, then 2008 and then in Feb. 2009, when the Grand Avenue Authority granted a two-year extension that expires Feb. 15. The firm has openly discussed the need for another two-year extension since last summer.

The delays have come at a price for Related. Witte said the firm has so far sunk more than $100 million into the project, including $56 million to fund the Civic Park — the only aspect of phase one that is under construction (it’s expected to be completed in May 2012). Other costs include fees to Gehry and other designers.

The company has so far accrued about $6 million in penalties with the joint powers authority for not meeting its timeline. The first two-year extension came with a $250,000 per quarter fee for not breaking ground. Under terms of the proposed extension through Feb. 2013, the $250,000 quarterly accrued costs would cease. Instead, Related would pledge $1 million to the authority upon groundbreaking. In total, the firm would be on the hook for $7 million in fees if the extension is approved and phase one breaks ground by February 2013, Witte said.

The proposed extension comes with a key caveat: If the authority can show that another large scale, $500 million mixed use project in the state has secured financing, Related will have only six months to break ground on phase one or lose its development rights.

Meanwhile, the county parcels across from Disney Hall — including the plot immediately east of the phase one site, which is tabbed for phase three — are operating as surface parking lots.

Some critics of The Grand, including Los Angeles County Supervisor Michael Antonovich, have called for scrapping the plan all together. Antonovich has repeatedly viewed Related’s extensions as needlessly tying up valuable county land. Antonovich, however, does not have a vote on the five-member joint powers authority.

His colleague on the board, First District Supervisor Gloria Molina, whose district includes Downtown, is likely to support the extension.

“Why go forward with Related? The answer is simple,” said Gerry Hertzberg, Molina’s policy director and a member of the Grand Avenue Committee, which advises the authority. “They’ve operated in good faith, and the market is very flat for large scale projects…we don’t exactly have other developers knocking on our door.”

Master Plans

Perry said she has not yet decided how to vote on Related’s extension request. She said she first wants to hear from the authority’s legal advisors on Monday about the implications for the city-owned, phase two parcels if phase one gets another extension.

There is, however, clear precedent for changing phase two without affecting phase one. The first major change to phase two came when the authority approved Related’s swapping of land originally tabbed for retail development for Eli Broad’s $100 million contemporary art museum.

The CRA plans to invest $52 million in a parking facility under the museum, as well as a public plaza just south of the museum and wider sidewalks along Grand Avenue. The plaza would sit on a platform above Gen. Thaddeus Kosciuszko Way, making it level with upper Grand Avenue and the museum’s ground floor.

As the CRA boosts its investment in the Grand Avenue improvements, and parcel “M” gets on the fast track, the balance of the joint powers authority is, at least for the moment, leaning toward the city.

Hertzberg said there is no competition between the county and city’s interests on the authority. But Perry said that the difficult market conditions have caused both sides to look more closely at their respective assets.

“My concern extends to the fact that we’re under one umbrella in the authority and I think each one of us, the city and county respectively, would like to exercise control over their own asset in the most advantageous way in terms of getting it developed that didn’t exist there before,” Perry said. “So I think that is the ever present tension on the board.”

Contact Ryan Vaillancourt at

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1 comment:

  • anonymous posted at 6:44 am on Thu, Feb 10, 2011.

    anonymous Posts: 0

    If the CRA believes in the future of Downtown LA, why don't they simply donate the $52 Million on fast-tracking that street car, which is supposed to serve this New Museum. There are Thousands of Parking withing a block of the site already, yet the Streetcar is struggling to find funding.....??