DOWNTOWN LOS ANGELES - Six years after developer Related Cos. won approval for a $2 billion mega-project on a series of publicly owned parcels on Bunker Hill, the firm is building the first private component of the Grand Avenue plan.
Today, the firm marked the groundbreaking of a $120 million apartment tower that will rise just south of the under construction Broad museum.
The site, known as parcel M, was originally slated to be developed in a secondary phase of the Grand Avenue project. Related also had far grander visions for the project in 2007. Parcel M was entitled for two towers of up to 35 stories. Instead, Related is erecting a single 19-story, 271-apartment tower. Twenty percent of the units will be subsidized affordable housing.
Despite the delay and the scaling back of the residential component, the groundbreaking marks a milestone for the firm, and for the city-county joint powers authority that controls the Grand Avenue project land.
As part of the development rights for the project that initially included two towers with a boutique hotel, luxury condos and 250,000 square feet of retail, Related was required to pay for and oversee development of the $56 million Grand Park — the 12-acre facility opened last summer.
Later, Related also agreed to transfer some of its development rights to Eli Broad for his contemporary art museum. Parcel M represents Related’s first opportunity to see a return on its investment on Grand Avenue.
Designed by Miami-based Arquitectonica, the parcel M tower, which does not yet have a name, will include two ground-floor restaurant spaces with outdoor seating. It will abut a public plaza next to the $100 million The Broad. The Related tower is expected to be completed in late 2014.
“For the first time you’ll have a seamless street front on upper Grand,” said Bill Witte, president of Related California.
While the Thursday groundbreaking was a celebratory event filled with smiling politicians, looming over the affair was the reality that Related still lacks a plan for the site across from Walt Disney Concert Hall, even as it faces a Feb. 15 deadline to break ground.
Of course, the firm will not meet that deadline. Instead, it is expected to request a third extension from the Grand Avenue Authority, the city-county body that oversees the complex development agreement.
After bypassing expected groundbreakings in 2007 and 2008 as the nation went into recession and the real estate market tumbled, Related secured a two-year extension in 2009 and another two-year reprieve in 2011. The Grand Avenue Authority, a five-member panel chaired by County Supervisor Gloria Molina, could opt to deny an extension beyond Feb. 15, which would essentially sever ties with Related. That, however, appears unlikely.
Molina said that despite the delays, Related has been a capable partner and she wants the firm to remain on board to develop the remaining Grand Avenue project parcels. But she also said that any extension will likely be tied to new expectations for a more realistic project on the original phase one site, which is currently a parking lot.
“Obviously it can’t be a meaningless extension, like ‘let’s just see and hope that the economy gets better,’” Molina said. “It has to be more meaningful from the standpoint of outcomes. We’re going to be asking those questions and trying to hold their feet to the fire.”
Fourteenth District Councilman José Huizar, who has replaced Ninth District Councilwoman Jan Perry on the Grand Avenue Authority, said he too favors an extension for Related.
The delays on phase one can be blamed on the economy, not Related, Huizar said.
Related’s primary obstacle in developing the proposed Frank Gehry-designed complex has been financing — a factor that the firm has said would hinder any developer. Its last deadline extension came with the condition that if a project of a similar budget elsewhere in the state secured financing, it would essentially nullify the deadline reprieve. Such a project was never identified.
Witte has indicated that its plans for the site across from Disney Hall, as with parcel M, will likely be scaled back from what was entitled. But he has been silent on what an alternative project might entail.
The next meeting of the Grand Avenue Authority is tentatively scheduled for 10 a.m. on Jan. 28 at the County Hall of Administration.
Contact Ryan Vaillancourt at email@example.com.