Urban Pioneers Sink Their Roots in L. A.’s Downtown : New Housing in Heart of City Appeals to Many

The artists who live in downtown Los Angeles’ northeast industrial district have been predicting for years that as soon as word got out that something hip was happening in their reconstituted neighborhood, the yuppies would buy up all their funky lofts and spoil the fun.

Well, the yuppies are moving downtown, but they are not interested in bursting the gates of the artists’ Bohemia. Just like the artists, however, the yuppies are being hailed as pioneers, except their covered wagons come fully equipped--with swimming pools, tennis courts and panoramic views.

The yuppies are pioneering downtown living in condominiums on Spring Street and in South Park and, to a lesser extent, in apartments on Bunker Hill.

The Premiere Towers condos at 621 S. Spring St. are populated primarily by yuppies, as are the Skyline condos at 9th and Hope streets in South Park, and the Vista Montoya condos at 1425 W. 12th St. And the next wave of housing projects being planned for downtown seem to have been designed with the yuppies in mind--with one- and two-bedroom apartments with moderate rents that would fit nicely into a young urban professional’s budget.

Popularizing Idea

Still, the idea of living downtown is by no means massively popular, and the market for housing has not yet taken hold. But most experts on the downtown market agree that the yuppies are the ones who can popularize the idea of living downtown, simply by becoming the first ones to make the move.

The Skyline, with 126 of its 200 units sold, stands virtually alone in South Park, and the residents there had some anxious moments when the Community Redevelopment Agency began seriously rethinking plans for development of a residential neighborhood in the area. The residents are greatly relieved now that the agency has decided to proceed with at least two more housing projects totaling about 600 units in South Park.

The fate and direction of the rest of the planned South Park community rests on the results of a recently completed Urban Land Institute study of the housing market.

Pioneering Experience

Premiere Towers is the only market-area housing project on Spring Street, and living there may well be more of a pioneering experience than living in the Skyline. To date, 77 of the 120 units at Premiere have been sold.

Meanwhile, Bunker Hill, with the Promenade condos, the Promenade Towers apartments and the Bunker Hill Towers, is the closest downtown comes to a definable neighborhood, aside from the ethnic neighborhoods of Little Tokyo and Chinatown.

John Maguire, director of housing for the CRA, believes that expansion of the downtown housing market depends a great deal on the retired couples, the “empty nesters” (working couples with grown children) and the yuppies already living there. He is counting on their presence to make the area seem safe and attractive for others.

“We have a mix of people who have bought here,” said Jan Neiman, real estate broker at Premiere Towers, “but mostly I’d say our customers have been young professionals just starting out. The average age is probably about 30, and they are just getting started up the business ladder.”

‘Transitional Home’

“Predominately, we are looking at young single people, or two single people who could live together in a roommate situation,” said Mark Bornstein, vice president of marketing and sales for Goldrich, Kest & Associates, developers of the Promenade Towers apartments, which recently opened its leasing office.

“These apartments would be a wonderful transitional home for a young single person who works downtown but who hasn’t settled down yet. They would also be a good base for a young couple that hasn’t started on a family yet.”

To date, 150 of the 489 Promenade Tower units are occupied and about half are leased, according to Bornstein.

Yuppies and the downtown housing market are ideally suited for one another, according to Chris Leinberger, president of Robert Charles Lesser & Co., which conducted a survey of the downtown housing market for Goldrich, Kest.

Downtown appeals to young people because “it is a pioneering situation right now,” Leinberger said, “and younger people are more willing to be pioneers and put their money into something that will pay off in the long run.”

‘Suburbs Too Boring’

Yuppies are also drawn to the urban life style, and downtown is “virtually the only urban environment in Southern California that people can live in right now,” Leinberger said. “The suburbs are viewed as just too boring for most young people.”

Finally, yuppies are professionals and, according to Leinberger, downtown is the center of Southern California’s professional work force.

Financially, the yuppies and downtown are well matched also. As Eric Egaas, 26, who lives in Premiere Towers, said, “The price was definitely right.” Premiere Towers condos sell for about $100,000 for a one-bedroom unit and $130,000 for two bedrooms.

The Community Redevelopment Agency provided a $12-million construction loan for the project, and also offers “soft” second mortgages on all the units, meaning that if a prospective buyer cannot obtain a loan covering the full cost of the condo, the CRA will provide a loan for the balance. The financing terms are better than most any deal a buyer could strike on the open market.

‘Soft’ Second Mortgages

Premiere Towers requires only a 5% down payment with graduated interest rates beginning at 7.95% for the first year to 10.95% for the fourth year and thereafter. The market rate now is about 12%.

“Without the CRA’s ‘soft’ seconds, the average person who would be able to buy here would have to be earning $38,000 and be squeaky clean--no bills, no outstanding credit. But the ‘soft’ seconds make our units available to someone earning about $33,000,” Neiman said.

The Skyline condos and Promenade are more expensive (Skyline units sell for between $170,000 and $278,000), but both projects benefit from CRA assistance as well. (At Promenade, 15% of the units are subsidized by government grants, making them available to low- and moderate-income renters. The monthly rents for those units are $490 for one bedroom and $760 for two.)

The attractive financing of the units downtown is not the only reason the yuppies have made the move. Like most everybody else, they disdain commuting. Living downtown eliminates commuting for those who work downtown, and nearly all of the area’s residents do. The yuppies walk to work now.

Short Commute

Tony Blomert, who has lived downtown for two year, believes that he other young adults “are probably more active socially” than their counterparts living in the San Fernando Valley.” Blomert, a Skyline resident, described himself as a young urban professional, but vehemently objected to being called a yuppie. The time saved not having to commute is not the only reason that Blomert likes living downtown. Something much more insidious is at work, Blomert said.

“In the Valley, you have kind of a mind-set that you don’t have when you live downtown,” he said. “When you live in the Valley, the thought of going into Century City or even over the hill to Hollywood is like going to ‘the city.’ It’s a major undertaking. Downtown, you just feel more at the center of things.”

Blomert “believes in the revitalization of downtown and in the vision that it can become a 24-hour community with an almost Manhattanish atmosphere” but he doesn’t necessarily like everything that comes with that level of urbanization. For instance, he misses the large trees and green lawns he would see on bike rides through Woodland Hills. He doesn’t bicycle or walk through his new neighborhood.

Walks to Music Center

“Also, living in a high-rise, when you’ve grown up in a typical Southern California ranch-style house, you kind of feel like you’re living in a hotel,” Blomert said. “You get in the elevator, it takes you to your floor, and you walk down a long, quiet hallway, and there’s nobody there.”

Egaas, who lives in the Premiere Towers, likes being able to walk to the Music Center and the restaurants downtown, and he likes the vibrancy of the area in general.

“At this point in my life, the suburbs aren’t very exciting to me. If I could afford to live anywhere right now, there is no way I’d live somewhere like the San Fernando Valley or Irvine or the San Gabriel Valley or even at the beach. That doesn’t interest me,” he said.

What does interest him are the old buildings downtown, their character and being able on warm clear nights to go up to the roof of his building and feel surrounded by the lights of the city skyline.

‘Excited About View’

“The view was one of the highlights of our apartment,” adds Bernard Kamine. The Kamines moved to the Westside when their Bunker Hill Towers apartment became too small for their growing family. But when they lived on Bunker Hill, “the people who would come to our apartment were always very excited about our view of the city. At night, you look out and you see all the lights of the buildings downtown. That’s a view you just don’t see in the Valley,” Kamine said.

Frank Sherwood, who represents another large contingent of downtown residents--the recently retired--says that he likes the “atmosphere” downtown.

“They are building everything up so much here. I like all the stores and shops and restaurants. It’s very convenient and exciting and vibrant at the same time,” he said.

Sherwood, who has lived in the San Fernando Valley and the Echo Park area, says the only real complaint is the lack of a nearby grocery store. “That’s a problem. We have to go all the way out to 3rd and Vermont to shop.”

Making Initial Move

There are small convenience stores in the area such as the one on the ground floor of Bunker Hill Towers but the “prices there are awfully high,” he said.

The people who live downtown, apparently, like it well enough. But then, John Maguire and the other people at the CRA expected that. The problem, they knew, would be persuading people to make that initial move.

“Once people are exposed to the area, they like it,” Maguire said. “That’s the way it is with the people who live there now. Just getting the message across that downtown isn’t unsafe, that there are plenty of things to do there, that’s what we have to do.”

The negative perception of downtown as a crime-ridden haven for derelicts or as a business center that has very little to offer after 5 p.m., has been one of the major impediments to establishing housing downtown.

Cost of Land

The most formidable obstacle, however, is the cost of land. Studies, such as the one conducted by the Lesser firm, have shown that, just among the people who work downtown, there is an annual demand for about 450 units of housing downtown. Make that 450 units of affordable housing. That’s the problem.

With land values downtown soaring above $150 per square foot, public subsidies are required even for building luxury housing, according to Maguire. Building low- or moderate-income housing can cost tens of thousands of dollars per unit in public subsidies.

“It’s important to have housing downtown, to make it a 24-hour community, because you have the existing infrastructure there, you have the buildings. To shut out the lights and roll up the sidewalks at 5 p.m. is a waste,” Maguire said. Besides, he added, every person who lives downtown and walks to work means one less car clogging the freeways during rush hour.

Leinberger agrees that constructing affordable housing is the key to establishing a residential community downtown, because “the upper end of the market, the ones who can afford the luxury units, tend to come last to a pioneering environment. At the low end of the market there is an overwhelming demand for housing downtown, but the market is very thin at the high end.”

Condominiums Sold Out

With development in the heart of downtown driving land values higher and higher, the answer to building affordable housing, according to Leinberger, is to “choose an off-location and build high-density, low-rise units.” The Vista Montoya project west of the Harbor Freeway and the Tokyo Villa condominiums in Little Tokyo, both of which sold out almost immediately, are prime examples of how well that strategy can work, Leinberger said.

The Tokyo Villa project serves as a model of success for the CRA as well. As one CRA official said, “Little Tokyo is an example of what can be done, of what we are trying to achieve in South Park and elsewhere downtown.”

That may take some doing. What sets Little Tokyo apart, according to Cooke Sunoo, CRA project manager for the area, is the great sense of community shared by the people there.

Little Tokyo, like Chinatown, has been an established residential community, a neighborhood, for most of this century. The people of Little Tokyo, in fact, were so attached to their neighborhood that they returned to it after having spent the war years in government interment camps during World War II.

Duplicating that kind of feeling is obviously going to take some work. “But that’s what we have to do,” Maguire said. “We have to provide people with a full range of shopping facilities, services and cultural facilities, on a neighborhood scale. We have to create the feeling that people are part of the South Park community, and not just make it seem like they live next door to a huge office building.”