Property Management Duel a Family Feud? : Subsidiaries: Tishman Midwest’s move to Los Angeles sets the stage for head-to-head competition with Tishman West for business in California.

There’s now another company in town with the name Tishman--Tishman Midwest Management Corp. of Chicago and its subsidiary, Tishman Midwest Management & Leasing Co.

If you aren’t yet confused, remember that these entities are all separate from Tishman West Cos. of West Los Angeles; Tishman Realty and Construction of New York and Los Angeles, and Tishman Speyer Properties of New York. Each of these companies have offices in Los Angeles, not to mention a long list of subsidiaries.

They’ve all become friendly competitors of sorts here in Los Angeles and in other cities. None of them are related anymore, but they do share a common lineage: Polish immigrant Julius Tishman, who in the late 19th Century began building apartments in Manhattan.

Tishman Midwest was at one time a subsidiary of Tishman Management & Leasing Corp., along with Tishman West and Tishman East.

These companies too went their own ways, but they had something of an understanding that they would each keep to their own area of the country. Until now, that is, because Tishman Midwest is now competing head to head with Tishman West for property management business in Los Angeles and California.

In April, Tishman Midwest took over management for most of the commercial properties owned by Chicago-based VMS Realty Partners--one of the nation’s biggest and most troubled real estate syndicators.

In California, Tishman Midwest is managing about 10 buildings for VMS totaling about 10 million square feet. They include Century Park Center at 9911 W. Pico Blvd. near Century City, the so-called Bradley Buildings in Pasadena and several other projects in Northern California.

Tishman Midwest has set up headquarters at 9911 W. Pico and has hired a number of former VMS employees.

Meanwhile, Tishman West has been retained to manage about 22 VMS buildings in California totaling about 2.8 million square feet.

They include 10880 and 10960 Wilshire Blvd. in Westwood, plus a group of buildings that make up what’s known as the Buckeye portfolio--a collection of basically Class B and Class C buildings acquired from Buckeye several years ago by VMS.

Many of these properties are for sale, but finding a buyer for aging buildings in need of repair and/or asbestos abatement is no easy task.

VMS for months has been suffering from liquidity problems that have had a domino effect on its lenders and investors. Xerox Corp., for example, which owns 25% of VMS through Xerox Credit Corp., had to take a $400 million write-off in the first quarter of this year because of financial troubles at VMS.

In the last year, top management has been shaken up and out several times. The three partners for which VMS was named--Robert A. Van Kampen, Peter R. Morris and Joel A. Stone--have all been feeling the pressure.

VMS directors have also found themselves vulnerable to lawsuits brought by investors in the syndicator’s five publicly traded real estate investment trust (REIT) funds and three master limited partnerships (MLPs).

These include VMS Mortgage Investment Fund, VMS Strategic Land Trust, VMS Strategic Land Fund II, VMS Hotel Investment Fund, VMS Short Term Income Trust and VMS Mortgage Investors L.P.(I, II & III).

The primary reason for most of this financial mess can be found in the federal tax code, say VMS executives. Deals put together in the late 1970s and early 1980s as tax shelters no longer made any sense after the Tax Reform Act of 1986.

VMS raised about $2.6 billion in equity from 110,000 investors in its public funds and about 100 limited partnerships between 1981 and 1989. With the help of lenders, VMS controls assets valued at about $9 billion.

“The tax laws ended the syndication business,” observed Tom Spear, formerly a vice president with VMS in Los Angeles and now a senior vice president at Tishman Midwest. “Everyone involved in syndication took a huge bath.”

Some VMS investors and analysts also blame mismanagement and extravagance for big financial losses. Either way, VMS can point to plenty of equally troubled colleagues in the real estate business.

Now as VMS and its investors struggle to regroup and salvage what’s left, its properties are in the hands of outside managers such as Tishman West and Tishman Midwest.

“We’re very friendly competitors,” claimed Spear. There is no reason, he said, why both companies can’t do well in Southern California.

On July 1, Tishman Midwest assumed management of a $100-million retail center portfolio owned by a group of Asian investors. Spear and his colleagues are planning more additions to their business roster soon. Tishman West, of course, has plans to do the same.

Giant shopping center developer Melvin Simon & Associates Inc. of Indianapolis plans to cut its local staff to deal with the slowdown in commercial real estate.

The company has about 26 employees in Los Angeles; by the end of this year, that number may be cut by between one-third and one-half. Some employees are being transferred back to the home office, while others are being given as long as six months to find other employment.

“It’s no secret to anybody what’s going on in the industry,” said Linda Sonnonstine, manager of public relations for Simon in West L.A. “We’re going to play it day by day and see what happens.”

No plans are in the works for any cuts in Indianapolis, reported Sonnonstine and Barry Lindsey, senior vice president. “It’s really a redeployment,” he said.

Also unchanged are plans for four large-scale developments by the company on the West Coast. Those include Marina Place in Culver City, the Hollywood Promenade, Lloyd Center in Portland and the Forum Shops at Caesars Palace in Las Vegas.

DEVELOPMENTS Westwood Projects Add Retail Space Construction activity at two projects on the corner of Westwood and Pico boulevards in Westwood will add another 135,000 square feet of retail space and 1,150 parking spaces to the neighborhood by next summer.

Sydney, Australia-based Westfield Inc. is adding 105,000 square feet to its 675,000-square-foot Westside Pavilion, along with 1,000 new parking spaces. A bridge across Westwood Boulevard will link the existing Pavilion with an addition at the southwest corner of Westwood and Pico.

And, at the northeast corner of the same intersection, brothers Michael and Elliot Lewis of West Los Angeles-based the Lewis Trust started construction in early July on The Westside Center, a 30,000-square-foot retail center with 50,000 square feet of parking for 150 cars. Unlike other small-scale retail centers, this project hides its parking behind and above the stores, rather than in front of them.

Both projects are designed by the Jerde Partnership.

Two new high-rise condominium projects are being planned in Long Beach--both designed by the Landau Partnership Inc. of Santa Monica.

Century West Development Inc. of Santa Monica is planning the $110-million Ocean Promenade--a 35-floor residential tower at Pine Avenue and Ocean Boulevard--formerly site of the 1916 Jergins Trust Building.

The new 450,000-square-foot project has been designed to function as a modern building while appearing to be a classic structure of the 1920s, complete with a mansard roof and gables. Units are expected to sell for between $200,000 and $1.2 million.

Construction work is set to commence in the spring and completion is expected in 1993. Century West recently finished the 95,000-square-foot Palisades Promenade in Santa Monica; its mainstay, however, is building apartment buildings at the rate of about 25 a year--mostly in West Los Angeles.

Beachfront Tower L.P. and its managing general partner, Chartwell First Atlantic Management Group of New York are planning their own Long Beach condo project, Beachfront Towers. The $36-million project is set to include 156 units selling for between $300,000 and $1 million.

The 15-story, 275,000-square-foot structure is to be located at 1500 E. Ocean Blvd. and features unobstructed water views. The architects have designed the building to suggest a ship, with a fan-shaped fountain at the entrance and a helicopter pad that creates the image of a captain’s bridge.

Ahmanson Commercial Development Co. late last month celebrated the opening of the first of two buildings in its $100-million Pasadena Towers office project at Colorado Boulevard and Lake Avenue.

The nine-story, 206,000-square-foot Tower I building was 65% preleased to tenants such as Continental Lawyers Title Co., Tokio Marine Management Inc. and Ford Motor Credit Co.

Construction is under way on a twin tower at the site.