Developers Gamble on Spring Fever : Former Stock Exchange Slated for Nightclub, Restaurant, Offices
Betting on the futures:
It’s still happening in Downtown Los Angeles, on Spring Street, heart of the city’s financial district until the late ‘60s, when major banks and brokerage houses moved to new high-rises five blocks west.
Since 1976, when the 1903 Hellman Building at 4th and Spring streets was renovated by Banco Popular de Puerto Rico, brave property owners and tenants have spent millions, with the Community Redevelopment Agency’s help, to breathe new life into the seedy stretch from 4th to 7th streets, which is on the National Register of Historic Places.
The latest pioneers in this pork-bellies-type gamble are Brian L. Potashnik and his Direct Capital Corp., which is buying--appropriately enough--the 618 S. Spring St. building that housed the Pacific Stock Exchange for 56 years, until it moved last February to the Beaudry Center II building just west of the Harbor Freeway.
“We’ll close escrow within the next couple of weeks. We have all the plans and permits. We’ve executed a lease with the nightclub, and we have a lease commitment (for offices) from some attorneys,” Potashnik said. Martin Eli Weil, a well-known local architect who was once chief restoration architect for the government of Canada, has been hired as restoration architect and design coordinator.
Clyde Wallichs, who for years ran his Wallichs Music & Entertainment Co. and the famous Wallichs Music City in Hollywood, is chairman of the board of the Clubs Network International Inc., operator of the nightclub; Mike Reeve, who has helped finance concerts since 1977 and owned several Family Fun Fair (pinball and other arcade games) stores for a couple of years, is president and chief executive officer. Jim Rissmiller, for many years Southern California’s leading concert promoter, will be a consultant for booking talent.
New York-Style Club
Reeve described the club, which he expects to open in February, as “the first New York-style nightclub in L. A.” It is being designed by Gilbert Konqui of JLH Enterprises to have live performances, video and disco. Konqui has designed more than 40 nightclubs in North America, including Zazoo’s in Phoenix and Fizz in Houston. Syd Mead, an artistic director who put together sets for the movies “Star Wars,” “2010” and others, is working on the club’s atmospheric design. Mario’s Construction, which recently renovated the Amtrak station in Fullerton, is general contractor, and Edward H. Lucero of Studio Five Architects will implement Konqui’s concepts, Wallichs said.
The club will be, Reeve said, “very stylish, where movie and rock stars will go, and the affluent will want to be seen.” Mostly, though, he hopes that the club will appeal to the downtown business crowd, and Wallichs is planning a 4 p.m. buffet to lure office workers on their way home from work. As for music, Wallichs said, it will be “groups that appeal to 25- to 40-year-old people.”
“L. A. has the largest concert market in the world,” Reeve said, “and that’s why we decided to get into this business.”
He and Wallichs plan to spend $1 million renovating the old trading floor, which has a four-story or 45-foot-high ceiling, and they are calling their facility “The L. A. Stock Exchange Club.”
Potashnik put the cost of the building at $4.6 million. Its 11 stories and basement have a total of 60,000 square feet of leasable space with the club occupying 14,000 and the attorneys about 3,000 square feet.
“I’d lease space in the office tower at $1 a foot, and that includes generous tenant improvements,” Potashnik said. Lease rates along Spring Street generally range from 60 cents to $1.10 per square foot per month, or $7.20 to $13.20 per square foot per year, in contrast with $25 to $30 per square foot per year for the first five years for office space in downtown’s prime financial area to the west.
‘Lion Ready to Jump’
Ed Rosenthal of New Downtown Realty, who is leasing the empty office space, 7,000-square-foot restaurant space and 11,000-square-foot ground floor of the former stock-exchange building, likened the building to “a lion ready to jump.”
“The stock exchange took up the whole building, so it (the structure) is inactive now,” he said, “but it will become a well-known building again.”
Until members of the Stock Exchange clamored to move out of the area because of the street’s deterioration and crime, the granite-and-bronze building with walls of polished Sienna travertine and ceilings decorated in gold leaf was known as one of L.A.’s finest office buildings. Ironically, ground-breaking for the lavish structure was held one week before the stock-market crash of 1929.
The building was designed by Samuel E. Lunden with John and Donald Parkinson, who designed several other buildings on Spring Street, as consulting architects.
“Lunden, who is 89 years old now, is working with us as a consultant,” Reeve said.
Reeve envisions the building renovation and club opening as providing a turning point for Spring Street, “because we will bring in the type of people the street needs.”
Slow Turnaround
The same has been said of the proposed state office building on Spring Street between 3rd and 4th streets and every other project completed in the area for the past 10 years.
The turnaround for Spring Street has been slow in coming.
Some businesses are boarded up. Many offices are vacant. Most of the run-down buildings are owned by absentee landlords described by Richard C. Schnell of Cushman Realty as “speculators who bought in the mid- to late-’70s and had no plans except to buy low and sell high.”
There is graffiti on the walls, derelicts on the sidewalks and drunks in the doorways.
As for serious crime, Sgt. Roger Jackson of the Los Angeles Police Department’s Central Division said, “It’s like a swap meet for drug users on a daily basis.” And with narcotics use, other kinds of crimes, especially car robberies and purse snatches, have occurred, most often at night.
“Most people have sense to stay out of the area after dark,” Jackson said. Yet this is when most people would frequent the L. A. Stock Exchange Club.
Theatre Center Renovated
It is also when people go to the Los Angeles Theatre Center, which opened in a renovated and expanded bank building at 514 S. Spring St. last fall. Said Jackson:
“They have a parking lot that has a security watch, but when parking spills over into the streets, there are some car rip-offs, because these (theatergoers) park just like they do in Palm Springs. They leave their cars unlocked.”
Just off the parking lot, due north, men who live on Skid Row shoot heroin and cocaine on a regular basis, Jackson added.
Wallichs isn’t worried. “We’ll have proper security and adequate parking: 270 spaces for valet parking 30 feet from our front door and 400 parking spaces behind the building with security guards and good lighting.”
Rosenthal of New Downtown Realty noted that “one of the worst hotels” on Main Street (just east of Spring Street) in Skid Row was recently demolished, “and the redevelopment agency is putting a parking structure in its place. Another parking structure is being built behind the former First Interstate Bank building at 6th and Main streets.” That building was purchased in 1985 by a New York-based investment group headed by Phillips S. Sassower and Leonard Glickman for about $23 million, and it was renovated and modernized as an office building.
Glickman, chairman of the Mayor’s Task Force for Central City East and president of the Spring Street Assn. of property owners, agreed that there is “a certain amount of lawlessness and permissiveness in the area,” but he noted that both groups he heads are addressing the problem. One way: “We are working with the city attorney’s office to curb the proliferation of liquor licenses in the area so they are not as highly concentrated.”
‘An Exception’
No liquor license for the nightclub in the former stock-exchange building? “Oh, no, that’s an exception,” he said. “That makes sense, but another liquor store doesn’t.”
Glickman’s building at 6th and Main streets isn’t the only building in the area that has been renovated. During the past few years, other old office buildings have been turned into apartments and condominiums, senior-citizen housing and a furnishings mart.
That building, the Design Center of Los Angeles at 433 S. Spring St., formerly the headquarters of Title Insurance & Trust Co., just celebrated its fifth anniversary, and though its owners--architect Ragnar Qvale and his brother, Kjell--wish Spring Street would improve faster than it has, they are philosophical.
Mollie Qvale, who handles public relations for her husband’s building, said, “We’ve succeeded in spite of the street scene.” The Design Center has parking in its building along with showrooms for designers and their clients and an art gallery and penthouse restaurant, open to the public. “So we’re self-contained,” Ragnar Qvale noted.
So self-contained, in fact, that the Design Center has already drawn some of the clientele the L. A. Stock Exchange Club is hoping to get.
Celebrity Clientele
“We had such excitement one day,” Mollie Qvale said, “when Sylvester Stallone came in and bought five pieces in the ceramic room of our art gallery. We’ve also had the Gabor sisters at the gallery and George Hamilton’s mother.”
In the restaurant, there are snapshots posted of visiting celebrities. Among them: Carol Burnett, Walter Matthau, Jack Lemmon, Robert Mitchum.
“And Lana Turner was also here,” Greta Haupt, the restaurant’s hostess, said. “She had been shopping with a designer, but she didn’t want a picture taken.”
