L.A.'s Big Convention Business Is Moving On : Tourism: Once ranked as a leading site for the lucrative convention industry, Los Angeles is taking a back seat to other cities, including nearby Anaheim.

Galperin is a Los Angeles-based free-lance writer who has covered the commercial real estate scene for several years

Los Angeles is losing out to other cities across the United States in the lucrative convention and tourism business. No longer is the city ranked as a top U.S. convention site, and Anaheim's more spacious facilities have more than four times as many national conventions booked through 1994 as Los Angeles.

The reasons are many. City officials, downtown landowners and convention organizers all agree that the major problems include an acute shortage of hotel rooms and continued delays in city plans to expand and upgrade the aging Convention Center.

Some already-booked L.A. conventions are looking to pull out of their commitments as they get word of all the foot-dragging that seems to be going on.

In 1985, the city issued $350 million in bonds to finance a Convention Center expansion that was to be done this year. That prediction was later changed to 1992, then 1993, and now there is talk of completion in perhaps 1994.

While the City Council in 1988 approved an original engineering estimate of $243 million, the lowest bid submitted this year was for $287 million. After plenty of debate over how to handle the escalating costs, the Convention Center Authority decided June 21 to award the construction to low bidders George Hyman Construction Co. of Baltimore and M. A. Mortensen Co. of Minnesota.

Now the City Council must approve a plan of finance that essentially allows the project to go over budget. The council is expected to take the issues up within the next two weeks.

Meanwhile, the 28 acres of land cleared over a year ago for a 350,000-square-foot exhibition hall stand idle.

Things aren't much better across the street on the east side of Figueroa Street at Pico Boulevard, site of the planned Pacific Basin Plaza hotel project.

The Community Redevelopment Agency, which is responsible for finding a developer for the project, spent more than nine months negotiating with Calmark Commercial Development Inc. The negotiations finally broke down this spring and on May 25, the CRA sent out a new request for proposals (RFP) to the five owners of the block bounded by Figueroa, Pico, Flower Street and 12th Street.

The 1.9 million square-foot hotel/office/retail complex is considered an important part of the Convention Center's expansion plans and city officials are anxious too see the projects 1,781 guest rooms become a reality.

Northview Corp., a subsidiary of Uri Sheinbaum's Calmark Holding Corp., filed for bankruptcy protection in March. His company still has an interest in the Pride Partnership, which is one of several owners of the proposed Pacific Basin hotel site. Other owners include the Waxman Family Trust, investor Chit Young, the City of Los Angeles and Ohbayashi America Corp. Ohbayashi controls more than two-thirds of the site and reports that its agreement to let Calmark negotiate on its behalf with the CRA has expired.

Ohbayashi is now shopping for a joint venture partner to help build Pacific Basin--preferably, executives say, an American company.

Despite its involvement in several U.S. projects, said executive vice president Kuni Aoto, "We have no expertise to develop by ourselves in the United States. We have to rely on other people." As for the company's search for a new partner, he said negotiations are "very sensitive . . . I still do not have any conclusion."

Ohbayashi is expected to pick a joint venture partner sometime in July. The CRA will then review Ohbayashi's development proposal plus any alternative proposals that may surface from other owners on the block.

Downtown L.A. First in Permits

Look for abundant construction activity this year in downtown Los Angeles, the Simi Valley, Rancho Cucamonga, Newhall and Irvine.

These areas posted the highest dollar amount in building permits issued in 1989 throughout the five-county megalopolis we call Los Angeles. Western Economic Research Co. Inc. of Van Nuys collected this building permit data by ZIP codes and L.A. Area Chamber of Commerce chief economist Jack Kyser organized the numbers into a report.

Among the findings: Downtown Los Angeles rated tops with a total of $445.4 million in recorded permits last year for commercial, residential and municipal development in ZIP codes 90015 and 90014. The total for six downtown ZIP codes posting significant new building permits in 1989 was $683.1 million compared to $326.9 million in 1988.

Simi Valley ZIP code 93064 was right behind downtown Los Angeles with $167.1 million in mostly residential and industrial construction planned. Rancho Cucamonga was next with $140.5 million in planned development within ZIP code zone 91730. Irvine ZIPs 92714, 92718 and 92715 are slated for a total of $272.2 million in mostly commercial construction activity and Anaheim is slated for another $178.2 million in mostly residential development within two ZIP code areas.

Turning back to Los Angeles County, it took less planned activity in 1989 to make the top of the list than the year before--indicating a slowdown in many areas. Newhall (91350) was number three on the L.A. County list with $131.6 million in planned construction activity in 1989 compared to $165.4 the year before.

Calabasas (91302) was fourth on the L.A. County list with $106.8 in development planned last year, almost all of it residential, compared to $247.8 million the year before.

Other areas worthy of note include Brentwood (90049) with $94.5 million in permitted construction, West L.A. (90025) which posted $89.7 million in planned projects, LAX (90045) with $74.9 million, Westwood (90024) with $73.8 million and El Segundo (90245) with $73.2 million.

Areas with less activity than expected include Lancaster/Palmdale, Long Beach and South Orange County. As it has for years, South Central Los Angeles remains inactive.

Most permitted projects, reported Kyser, get built within about two years of approval.

SALES: USC Converts May Co. Structures to Garages USC has acquired three May Co. warehouses on 4.4 acres south of downtown Los Angeles, and the university plans to convert the structures into a 2,000-car parking facility.

USC is paying $15.5 million for the property, which has been valued in excess of $29 million. May Co., in turn, will get a hefty tax deduction for the difference and recognition as the biggest corporate donor to the institution's six-year fund-raising campaign.

The warehouses--six stories high and totaling 1.1 million square feet--are located just east of the Harbor Freeway along Jefferson Boulevard. The need for campus parking has grown acute in recent years and the university projects a total of 4,000 current parking spaces will be lost over the next 20 years to make way for more campus construction.

The new USC Parking Center is less than two blocks from USC and less than a block away from USC Plaza, a large hotel and office project being planned by USC's Real Estate Development Corp.

Ken Ruby Construction Co. of Los Angeles and Turner Development Co. of Montclair have acquired 35 acres in Montclair and plan to begin construction in July on the $42.4-million Turner Montclair Center, a mixed-use, multi-tenant business park.

SDC Development of Newport Beach has acquired 31 acres in Ontario from Los Angeles-based BKY Investments Inc. and plans to build a $40-million business park just off the Pomona (60) Freeway. The project will include 156,000 square feet of industrial space and 206,000 square feet of showroom space, anchored by a 40,000-square-foot Levitz Furniture Store.

The Koll Co. of Newport Beach and Ohbayashi America Corp. have purchased 297 acres of land for $32 million from Union Pacific Realty in the Mira Loma section of Riverside County; a new business park is planned. The two developers are already cooperating on the $200-million 550 South Hope building project in downtown Los Angeles.

Nearby, Boise Cascade Corp. has purchased 27 acres in the 190-acre Empire Business Center from developer Mira Loma Ventures. Plans call for construction of a 200,000-square-foot facility at the site.

Golden West Ontario Associates has purchased 577,000 square feet of industrial space comprising the Etiwanda Distribution Center for $11.4 million. One of the two buildings involved in the deal is completed and leased. A second building is set for completion in September.

TCW Realty Advisors has bought 11812 San Vicente Blvd. in Brentwood for more than $20 million from Coral Plaza Ltd. The 68,000-square-foot building is 88% occupied but has a ground-floor bank branch standing empty. Brokers involved in the deal include Auerbach Financial Ltd., the Klabin Co., Lowe Associates and Jack Shanfeld Ltd.

Real estate broker Fred Sands has acquired the Wilbur Medical Plaza in Tarzana for $9 million from the Resolution Trust Corp. The three-story, 52,264 office building is located at 5620 Wilbur Ave.

LEASES: Law Firm Renews at South Coast Plaza Law firm Rutan & Tucker renewed its lease for five floors of office space at South Coast Plaza Town Center's Central Bank Tower in a deal worth an aggregate of $25 million. Since locating at South Coast Plaza in 1981, the firm has doubled in size and will now fill 90,000 square feet.

HOT ZIP CODES FOR NEW CONSTRUCTION

Postal ZIP codes with over $50 million in building permits issued for major projects in 1989.

LOS ANGELES COUNTY

ZIP Code Area Name Permit Value (millions) *90015 Downtown Los Angeles $243.9 *90014 Downtown Los Angeles 201.5 *91350 Newhall 131.6 *91302 Calabasas 106.8 90071 Downtown Los Angeles 100.8 *90049 Brentwood (L.A.) 94.5 *90025 West Los Angeles (L.A.) 89.7 *90045 LAX (L.A.) 74.9 *90024 Westwood (L.A.) 73.8 *90245 El Segundo 73.2 91340 San Fernando 71.8 *90017 Downtown Los Angeles 65.3 90404 Santa Monica 62.2 91436 Encino (L.A.) 60.6 *91744 Industry/La Puente 58.1 91304 Canoga Park 57.9 90805 Long Beach 57.3 *90036 L.A. (Miracle Mile) 56.1 91504 Burbank 52.8 90005 L.A. (Mid-Wilshire) 50.4 *91505 Burbank 50.3

ORANGE COUNTY *92714 Irvine 118.9 928** Anaheim 111.1 *92686 Yorba Linda 99.6 *92718 Irvine 79.5 *92715 Irvine 73.8 9280* Anaheim 67.1 *92621 Brea 56.1

RIVERSIDE COUNTY 91719 Corona 70.1 *92390 Temecula 52.9

SAN BERNARDINO COUNTY *91730 Rancho Cucamonga 140.5 *92335 Fontana 97.9 *91761 Ontario 78.5

VENTURA COUNTY *93064 Simi Valley 167.1

ZIP code with 0000* denotes exact ZIP code not able to be assigned.

* on 1988 list.

SOURCE: "Major Building Projects in Southern California--1989," Los Angeles Area Chamber of Commerce & Western Economic Research Co. Inc.

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