One Santa Fe - New Projects
One Santa Fe

DOWNTOWN LOS ANGELES - Seven years after it was first proposed, a massive project that will change the look of the eastern edge of the Arts District, and deliver more than 400 apartments, is finally underway.

Officials announced on Monday that site preparation work has begun for the $160 million One Santa Fe. The move was propelled by the securing of financing from Canyon-Johnson Urban Fund Investments.

Canyon-Johnson, a partnership between Canyon Capital Realty Advisors and Earvin "Magic" Johnson's Magic Johnson Enterprises, joins the development team consisting of Beverly Hills-based The McGregor Company, Polis Builders, which includes longtime Downtown player Nick Patsaouras, and Goldman Sachs Urban Investment Group.

"We're very excited to be building it," said Bill McGregor, owner and president of The McGregor Company. "Construction is commencing immediately starting with site development work, and then in three to five months continuing with building excavation."

A formal groundbreaking ceremony, which is typical with large projects even after preliminary work begins, has not been set. However, McGregor said completion of the fully funded project is expected by the end of 2014.

The project is slated for a four-acre portion of a 32-acre plot that is currently a Metro lot used for the maintenance and storage of rail cars. The property is bounded by Santa Fe Avenue, the First and Fourth streets bridges and Metrolink service tracks adjacent to the Los Angeles River.

"One Santa Fe more than any other project will be the catalyst that turns the Arts District, which is already an outstanding area, into an even more outstanding area," McGregor added.

One Santa Fe is being financed through sources including the development partners, tax-exempt bonds issued by the California Housing Finance Agency, a loan from the city Housing Department and tax credits.

Under a 78-year ground lease with Metro, which owns the land, the developers will build a six-story building with 438 apartments and 78,000 square feet of retail and commercial space, including a 15,000-square-foot grocery store. McGregor said the developers are in touch with several markets, but would not offer details.

The project just east of the Southern California Institute of Architecture would include a 47,400-square-foot plaza facing Santa Fe Avenue and 802 underground parking spaces. Twenty percent of the units would be aimed at low-income renters and a 3,000-square-foot space would be set aside for rent-free use by one or more community arts organizations.

SCI-Arc Ties

In April, the project received a $4 million loan to subsidize the affordable units from the Community Redevelopment Agency. However, due to the pending elimination of all redevelopment agencies in the state, McGregor said those funds will no longer be utilized. Still, he said, the affordable component remains unchanged.

McGregor said the developers will work with SCI-Arc to facilitate housing for students at One Santa Fe. A connection between the school and the project would provide a long-term tenant and commercial base. The school, which has about 500 students, recently completed a $23.1 million purchase of its campus.

The project will push the Arts District forward, said Ninth District City Councilwoman Jan Perry.

"It's a transformative project with a unique architectural design that will introduce hopefully new opportunities for employment and for students," said Perry. "I think it brings much needed neighborhood retail in an area that doesn't have very much, so people will be able to walk and to shop in their immediate community."

Well-known architect Michael Maltzan is handling the designs. His renderings reveal a pair of long, rectangular buildings along Santa Fe Avenue. The structures would include glass-walled retail and a series of gardens and pedestrian space.

Metro will lease 35,000 square feet of the commercial space. The transit agency is also considering a future direct connection from the property to a new station for the Red Line, according to Canyon-Johnson officials.

One Santa Fe has been in the works since 2005, when it was called Santa Fe Yards; at the time it was a $65 million project. In 2007, Goldman Sachs came aboard and the project was renamed. The development was approved by the City Council in February 2008.

The amount of Canyon-Johnson's investment was not revealed. It marks the second recent move into the Arts District for the company. Last year it acquired 940 E. 2nd Street, a 38-unit condominium complex. Residents began moving in last month.

"We're happy to be partnered with Bill and his team and Goldman Sachs Urban Investment Group," said Quincy Allen, managing director at Canyon-Johnson. "It was really a herculean task to get multiple layers of investors to the table."

Contact Richard Guzman at richard@downtownnews.com.

©Los Angeles Downtown News.