At the End of the Line, a New Beginning for Historic Site

The lights are going on again at the Pacific Electric Building in Los Angeles, the former home of Henry E. Huntington’s storied trolley line that served Southern California for more than half a century with its signature red cars made of wood and steel.

The massive brick building at 6th and Main streets has been mostly dark since 1989, when its former owner, Southern Pacific Transportation Co., moved out. Beverly Hills-based developer ICO Investment Group has embarked on an estimated $20-million renovation to create 314 apartments out of offices that evoke a film-noir vision of another era, with their mosaic-tiled hallways, glass doors and transoms.

The makeover, which will take about a year, comes at a time when several other developers are rushing to turn old Los Angeles office buildings into lofts. More than 1,000 units are under construction downtown, and most of them are in historic buildings, according to the Downtown Center Business Improvement District. An additional 5,800 units are proposed or in various stages of planning.

Skeptics in the real estate industry question whether there will be enough tenants to fill that many units in the next few years.

But a developer of three completed historic office renovations said more residents would make downtown more desirable -- and profitable for landlords and shopkeepers.

“I’m really looking forward to the critical mass these guys bring,” said Tom Gilmore of Gilmore Associates, who rents lofts in the San Fernando, Continental and Hellman buildings. “Occasionally people wonder how deep this market is. They don’t realize that every person you bring down here generates two more people six months later,” thanks to word of mouth.

The belief that a housing boom is underway is behind ICO’s decision to redevelop its building after holding it for more than a decade.

“We feel that the time is right for downtown Los Angeles to be a 24-hour city,” said ICO President Alexander Moradi, whose family bought the property from Southern Pacific in 1989.

In the late 1980s, the neighborhood was widely considered part of skid row, an image the historic district has been struggling to shake. Tenants of nearby buildings complain of drug dealing on their sidewalks and vagrants who use the streets and alleys as restrooms.

“We need assistance with the homeless,” said developer Jeremy Davey, who is renovating the 92-year-old Higgins Building at 2nd and Main streets. “It’s going to make residency for the near term an interesting challenge.”

Built well before the invention of air conditioning and reliable artificial lighting, the Pacific Electric is just the kind of old building developers like to convert. The floors are small compared with the wide, boxy high-rises that sprung up after World War II. Windows are wide and tall, affording plenty of natural light. It has a rooftop terrace suitable for a garden and substantial space for parking in the former streetcar terminal.

Monthly rents at the Pacific Electric will start at about $1.50 a foot. That’s par for downtown’s luxury apartment market, where rents average $1,600 a month for a two-bedroom unit. That’s a little more than in Burbank and about the same as Hermosa and Redondo beaches, according to Marcus & Millichap, an apartment broker.

To help address security issues, Pacific Electric apartments will have a doorman and 24-hour security, Moradi said.

When it opened in 1905, the nine-story building towered over the mostly residential neighborhood south of the city’s business district.

With nearly 500,000 square feet spread over an entire block, it was the largest building in Los Angeles. Huntington, a real estate developer, bought and expanded a railway as part of his strategy to promote the sale and development of large tracts of land in Southern California.

The Huntington Building, as it was then known, was his headquarters and terminus of the electric trolley line that once had more than 1,000 miles of track.

He rented out most of the office space and turned the top two floors into new quarters for the Jonathan Club, an exclusive men’s social club formed in 1895 for Republican supporters of William McKinley.

Club facilities included a top-floor ballroom, theater, billiard room, card room, gymnasium, tap room, dining hall, breakfast room, smoking room, library and conversation room. Huntington, the club’s president, maintained a private suite.

In 1910, Huntington sold his train line to Southern Pacific Railroad, which also took over the building. Ridership declined steadily starting in the 1930s, and the last car left the Main Street terminal in 1950. The trolley line operated from another downtown terminal until 1961.

The Moradi family, which operates ICO, has rented the property to several movie producers through the years. It has appeared in such films as “Traffic,” “Spider-Man” and “L.A. Confidential,” Moradi said.

A few retailers have continued to operate at street level, including Cole’s P.E. Buffet, which has been serving sandwiches and pouring drinks since 1908.

Cole’s and other retailers will stay on the ground floor, said project architect Barbara Flammang of Killefer Flammang Architects. The lobby was renovated after World War II and has a distinctive flair even though it’s not the original design.

“We’re going to keep it in the 1949 Deco style,” Flammang said. “It’s very cool the way it is.”

Like most developers of historic properties, Moradi is taking advantage of local and federal tax incentive programs that encourage their preservation.

To qualify for state housing funds, he will set aside 20% of his units for tenants whose annual incomes fall below 50% of the county median of $44,100 for a two-person family.

“It’s a complicated way to finance a project,” said Amy Anderson of the Los Angeles Conservancy, an advocacy group for historic preservation. “But lenders aren’t necessarily dropping from the sky” to fund building conversions in old Los Angeles.

Eager developers, however, do seem to be arriving by parachute monthly. Owners of at least 30 historic buildings have announced plans for housing conversions or are in various stages of development.

Among them is the Subway Terminal Building, a 1926 edifice on Hill Street that once served Red Cars heading west.

“Right now there is not the support or infrastructure to allow new tenants to feel completely at home,” said Davey, chief executive of Albion Pacific Property Resources, which is developing the Higgins Building. “That’s the biggest gamble for a developer. But eventually downtown will be a city within a city, vibrant with new life.”