The commercial building boom in downtown Los Angeles in recent years mostly has been north of the 10 Freeway.
But to the south, “for too long, the area has been overlooked” by developers, L.A. City Councilman
That could be about to change.
A massive multi-use complex called Broadway Square Los Angeles, estimated to cost $1.2 billion, is poised to get underway in a two-block stretch of the neighborhood east of the 110 Freeway.
The project would include a hotel, shops and residences on a site now occupied by just one main building, the 12-story Reef/LA Mart, which houses home furnishing showrooms and includes events and creative office space.
The 9.7-acre project, formerly called SoLA Village and then the Reef Project, has been years in planning as it sought city approvals and dealt with lawsuits brought by community activists who complained that the project didn't have enough affordable housing for low-income residents in the area.
Last year, the approvals were obtained, and recently the lawsuits were settled, so now the site's owner is seeking to either find a partner to develop the property or to sell it off to another developer.
Either way, "we're very confident that this project will move forward as planned," Lakisha Hull, senior planning deputy for Price's office, said Thursday.
Yet once construction starts, it's unlikely to spark a massive building boom in the area similar to the one north of the 10 Freeway, said Rob McRitchie, senior vice president for capital markets at JLL, a commercial real estate firm.
"It could be a catalyst," McRitchie said. "People know about [the area] and it's on a lot of developers' radar. It's just that people are focused on other parts of the city right now."
Mike Condon Jr., executive managing director at Cushman & Wakefield, noted that much of the area is zoned for industrial use or low-density buildings, and getting that changed to accommodate more large-scale, mixed-use projects would be time-consuming and costly.
The project "will be very positive for the area, but I don't expect a big wave of large-scale development to follow simply because of the zoning issues," he said.
There has been some recent large-scale commercial development south of the 10 Freeway, but on the west side of the 110 Freeway, which also is in Price's 9th District.
USC Village, a $700-million project that includes student housing, shops and restaurants with such retailers as Target and Trader Joe's, opened in August.
Other projects planned or underway in the area include the $350-million Banc of California Stadium for professional soccer and “Star Wars” creator
Comparatively little real-estate development on a large scale has taken place east of the 110 and south of the 10, but the project still will be "a game-changer when it comes to doing development in our district," contended Hull of Price's office.
The 2.54-million-square-foot Broadway Square Los Angeles would cover the area between West Washington Boulevard and West 21st Street to the north and south, and between South Main and South Hill streets to the east and west.
Designed by architectural firm Gensler, it would include a 19-story hotel with 208 rooms and condominium towers of 35 stories and 32 stories that would have a combined 895 condos. The existing Reef/LA Mart building would be renovated and feature a rooftop restaurant.
Other shorter buildings would house 528 apartments and 21 "live-work" units for people who operate small businesses at their homes. There would be an eight-level parking structure, shops, more restaurants, a grocery store and significant open space.
It also has approval for 72,000 square feet of signage, including for continuous LED billboards, that would be visible from the 10 and 110 freeways.
The owner, a family business called PHR LA Mart and led by managing partner Ara Tavitian, first proposed the project in 2014.
The project is being marketed worldwide and the firm is now entertaining bids, which are due by Dec. 1, said Laurie Lustig-Bower, an executive vice president of CBRE Group Inc., which is representing the owner.
"The owner is open to different types of [ownership] structures," Lustig-Bower said. "It's going to change the skyline of downtown L.A."
The entitled property is being marketed without an asking price, she said, but it could be worth $500 million or more, according to a real estate source knowledgeable of downtown property values.
The announcement of the property's listing for sale follows a settlement that the owner reached with advocacy groups that had sought more affordable housing in the development.
The settlement's terms include roughly tripling the number of affordable units, to 70 from 25, according to a statement released Tuesday by Strategic Actions for a Just Economy (SAJE) and PolicyLink.
"This agreement is a step in the right direction toward providing much-needed affordable housing units," SAJE Executive Director Cynthia Strathmann said.
7:10 p.m., Oct. 5: This article was updated throughout with broker and other comments and additional project details.
7:35 p.m. Oct. 4: This article was updated with a comment from L.A. City Councilman Curren Price and information about an agreement the owner has reached with affordable housing advocates.