Completion of Grand Avenue project will be delayed

The developer of the massive Grand Avenue project said Monday that completion of the $3-billion redevelopment effort will be delayed until 2012 because of difficulty in obtaining construction loans amid the real estate downturn.

The Frank Gehry-designed high-rise project is seen as a linchpin in downtown Los Angeles’ revitalization, and the delay is the latest sign that the loft and condo craze in the civic center is slowing.

Grand Avenue was originally supposed to begin construction last fall, but that date has been pushed back several times. The project’s first phase – which includes a shopping center, a hotel and two residential towers – was once slated to be completed in 2009, but officials at Related Co. now say 2012 is more likely.

Bill Witte, head of Related California, said he now believes that construction will begin in the first quarter of 2009 and emphasized that the project is not in jeopardy. A fund controlled by Dubai’s royal family has invested $100 million in the project, and Related is close to naming another major equity partner (an earlier partner, Cal-PERS, pulled out, saying it was over-invested in the downtown real estate market).

But even with the equity, Related has yet to secure a construction loan.

“Nothing else has changed,” Witte said, adding that finalizing a construction loan is “not likely in this climate until the beginning of next year.”

cara.dimassa.latimes.com