One of the most sought-after real estate parcels in downtown Los Angeles is a carwash — and it's been sold for an estimated $25 million.
Purchased for $525,000 in 1980, the Downtown Car Wash across the street from L.A. Live was bought by a local developer who plans to build a high-rise hotel-and-residential complex at the busy crossroads of Olympic Boulevard and Figueroa Street.
During the carwash's more than three decades of operation, its surrounding neighborhood has undergone a dramatic transformation that has left the sprawling one-story business looking out of place, like a go-cart among sleek race cars.
The intersection was once on the edge of the city's business center, but it is now in a key link between the booming new neighborhood around Staples Center known as South Park and the financial district.
"This is a Los Angeles real estate trophy," said buyer Ben Neman, a longtime downtown landlord, "and we want to make it a much better trophy."
In addition to constant car traffic rolling through the busy intersection, thousands of people trudge by the carwash on most days heading to and from basketball games, concerts and conventions.
"It's like the corner of Main Street and Main Street," said real estate broker Rod Delson of NAI Capital, who arranged the sale.
Neman bought the property from Robert Bush, who built the carwash in 1980, Delson said. Bush could not be reached for comment.
The price was not disclosed, but Bush was asking $25 million for the 36,300-square-foot lot that holds the carwash, two restaurants and a ticket-selling business. Experts familiar with the downtown market say that the owner had been approached for years to sell the carwash and finally agreed. They said he came close to getting his asking price.
Bush paid $525,000 for the land in 1980, the Los Angeles County Assessor's Office said. It was reassessed at $953,000 after the carwash was built. It was most recently assessed at $2.4 million.
Although many drivers will no doubt be sorry to see the carwash disappear, the president of the Los Angeles Downtown Center Business Improvement District is not among them.
"That was always my example of why we still needed eminent domain," Carol Schatz said. "We have created a new city center, and we don't need a carwash smack dab in the middle of it."
What should be there?
"Hotel, hotel, hotel," Schatz said. "Anything but a carwash."
Downtown has a hotel shortage, according to city officials hoping to attract more business to Los Angeles Convention Center just south of Staples Center.
Neman said he is in the early stages of planning what to do with the site, but that he envisions a hotel and perhaps luxury condominiums in a tall structure with shops and restaurants at street level. He hopes to build about 500,000 square feet.
Planning will take at least two years, Neman said, during which the carwash will remain open.
On Thursday afternoon, about 15 people crowded the faux wooden tables with orange seats at Fernando's Taco Inn restaurant inside the carwash building, where diners can watch cars make their way down the automated wash line.
Tim Ahern, a 64-year-old radio engineer who works at L.A. Live, comes to Fernando's a couple of times a month for lunch, he said. Word of plans for a new hotel didn't surprise the Culver City resident.
"They are killing each other to get land to build the hotels," he said while eating a quesadilla.
Matias Perez, 44, has operated his MP Shoe Repair & Shine inside the carwash for 24 years and remembers what the neighborhood was like before Staples Center and L.A. Live arrived starting in 1999.
"Everything used to be parking lots, prostitution and drugs," he said as he shined a pair of black dress shoes. "But now it's changing."
Neman and his affiliated companies own more than 5 million square feet of commercial real estate downtown, he said. He helped develop the Medallion, an extensive apartment and retail complex at 4th and Main streets in the Old Bank District.
Family pride is on the line now at Olympic and Figueroa, Neman's nephew Simon Neman said.
"Right now it's probably the most iconic corner downtown," he said. "We want to build something that is going to last."
The Nemans outmaneuvered would-be buyers, including the owners of the Figueroa Hotel next door, said downtown real estate broker Adam Tischer of Colliers International, who was not involved in the deal.
The hotel now charges advertisers $80,000 a month to advertise on the building's vast walls overlooking L.A. Live, Tischer said. A new tower on the carwash site could, he said, obscure the view of ads, such as the Apple iPhone advertisement there now.
"The only group that will be sorry to learn of this sale will be owners of dirty cars," he said, "and the owners of the Figueroa Hotel."