DOWNTOWN LOS ANGELES - Developer David Houk is close to securing a new investor for his proposed $1.3 billion Park Fifth project, he said this week.

“We have agreements, but nothing has happened yet,” said Houk. “It’s in process.”

The potential partner, Gabriel Hertzberg of the Triangle International Oil Company, said that he plans to take over for Park Fifth’s financially troubled former capital partners, Africa-Israel Investments and the Brentwood-based investment company Namco Capital Group. Hertzberg also said that he would purchase the site and provide a construction loan for the project.

This would mark Hertzbergs’s first real estate development. He refused to disclose the loan amount, but said that it would amount to hundreds of millions of dollars.

“We own oil in the Middle East and have the funding to get this project,” he said. “I will probably be the owner of the whole thing.”

Hertzberg said he is in the process of transferring money to U.S. accounts and expects the deal to be finalized within a few weeks.

He added that plans for the fully entitled development, to rise on a parking lot at Olive and Fifth streets north of Pershing Square, have not changed.

Those plans call for a 76-story building that would be the tallest residential structure west of Chicago, a 44-story tower and a 15-story residential building. Altogether the project would contain 790 condominiums, a 212-room hotel, retail and restaurants.

The new interest does not mean that the development will come online any time soon. Hertzberg said that he would like to break ground within six months if the deal comes to fruition, but real estate observers say it could be years before the economy can support large-scale development projects hinged on selling high-end condominiums.

Construction, Hertzberg said, would take at least three years.

Houk put the project up for sale in the summer of 2009. He would remain involved in developing Park Fifth if Hertzberg comes on board in financing it.

For years, the proposed development was marked by a large sign on the site with the project’s name, a telephone number and the slogan “Downtown Is Looking Up.” Yet the sign was not maintained, and was splattered with large blotches of colorful paint. Houk had the sign painted over late last year.

Contact Anna Scott at anna@downtownnews.com.

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(7) comments

anonymous
anonymous

Finally! I think that can sum up what most people are thinking. I have been waiting for this project for over 2 years now ever since I first heard about it. This will advance and improve the LA skyline, create thousands of jobs over several years in both construction, management and other businesses around the site, along with further improving the residential scene in Downtown. I am glad this is moving forward and look forward to any new positive developments. Therefore, I applaud the efforts by both the developer and the new buyer. Thanks!

anonymous
anonymous

Wow. This is a huge surprise. We'll see if it actually happens and then plenty more hurdles after that...

anonymous
anonymous

I'd love to see this building come to fruition. It's beautiful and right next to a subway station, encouraging mass transit use.

anonymous
anonymous

Besha'ah Tova Umasal tov

anonymous
anonymous

I wish the best to Mr. David Houk and his new investor prospect, Mr. Gabriel Hertzberg. Among limited market absorption for a higher end product, the higher costs and more time required to secure all remaining entitlements, the newer competition with lower priced similar product, scarce availability for residential financing and lower returns on the investment, the remaining challenge will be the timing of the flow of funds being brought from abroad. We were close to funding the project but we experienced long delays (nearly 9 months) in accessing funds until the U.S. Treasury, the World Bank and other governmental regulatory entities, had cleared them. Apparently, Mr. Hertzberg has found a way to expedite (possibly via a special purpose entity) the clearing of foreign funds via these entities so that they may be used to fund the construction of Park Fifth. However, the market demand and financing challenges mentioned above will be more difficult to overcome. If built, there is no question that Park Fifth will strengthen and enhance the livability and aesthetic DNA of Downtown LA!

anonymous
anonymous

awesome news!glad to see that they didnt give up on a project this great. hopefully all plans go forward with this opportunity...downtown needs it.

Cabrini213
Cabrini213

Give it up already people. Nobody wants this and it shouldn't be built.

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