First 2 Tenants Sign Lease for Stalled Library Tower Project
The developer of Library Tower, cornerstone of a long-delayed office complex that would provide nearly $50 million toward renovating and expanding the fire-damaged Central Library, has signed its first two tenants and plans to begin construction within the next several weeks.
Spokesmen for the accounting firm of Arthur Andersen & Co. and the law firm of Latham & Watkins have confirmed that the two companies have signed leases to occupy a total of about 20 floors in the planned 73-story tower on 5th Street between Flower Street and Grand Avenue.
Edward D. Fox Jr., a partner in developer Maguire Thomas Partners, said the leases enabled the company to obtain financing for the $350-million tower and should allow it to make its initial $26.9-million payment toward the library fund by the June 15 deadline set by the city.
Maguire Thomas received city approval for Library Tower--which would be Los Angeles’ tallest structure--in exchange for its promise to pay the Community Redevelopment Agency $32 million toward the renovation and expansion of the 60-year-old Central Library at 630 West 5th St.
Other Firms Interested
Fox said the company will release a statement regarding the two leases today. He added that Maguire Thomas is talking with several other firms interested in leasing space in the project, but declined to identify them.
However, Tom Sanger, a spokesman for Pacific Lighting Corp., confirmed that his company is “seriously negotiating” to take up nine floors of office space in Library Tower. An agreement between Maguire Thomas and Pacific Lighting would mean that the tower is 40% preleased, a benchmark level that real estate professionals believe guarantees a project’s success.
The Library Tower would be one of two office buildings the developer hopes to build across the street from the library’s main entrance.
Construction of the second building, which would provide the library fund with an additional $17 million, is not expected to begin for at least two years.
Negotiations with prospective tenants for Library Tower had hit several snags, forcing Maguire Thomas to ask the city to extend the deadline for its initial payment to the library fund three times. Its last request, made five months ago, had some city officials worried that the entire project might have to be scuttled and the library’s renovation plan down-sized.
Don Spivack, senior project manager for the CRA, said he is now “very optimistic” that escrow on the tower site will close and the city will receive the $26.9 million by the June 15 deadline.
“If all goes well, we’ll probably see excavation (for the expansion of the library site) begin by the end of the year, and actual construction would begin by the fall of next year,” Spivack said. Barring further snags, the construction and remodeling work would be finished in 1991.
The plan would include a refurbished and enlarged library; the two new office towers; a new park on the west lawn of the library grounds and a mammoth outdoor stairway rising in front of the library that would link the modern high-rises on Bunker Hill with the rest of downtown below.
The plan, originally approved in 1985, has been complicated by the $22-million arson fire that damaged much of the building and destroyed 375,000 books in April of last year.
The entire project is expected to cost about $141 million, Spivack said. About $50 million would be provided by Maguire Thomas, and another $12 million to $20 million could be generated by negotiating a deal in which the city would sell the library to a developer, but would continue occupying the space by means of a long-term lease.
The tax revenue the two Maguire Thomas buildings would generate would allow the city to issue about $69 million in tax-exempt revenue bonds, Spivack said. Any shortfall could be offset by the City Council or by private donors.
