Pike Project Development in Long Beach Put on Hold
A shaky real estate market and the nation’s stagnating economy have forced developers of a $1-billion “city within a city” on the Long Beach oceanfront to postpone this summer’s long-awaited groundbreaking for at least a year.
According to the original schedule, the bulldozers would have been out in full force on the Pike project, but prominent Los Angeles developer Wayne Ratkovich said this week that the recession has spawned the “most severe credit crunch in decades” and financing for the project has dried up.
“I wish I could tell you that it was all coming together and in a couple of weeks we’ll be there, but we won’t be,” he said. “It is not coming together as fast as anyone would like to see it. For the last year or so all of us were perhaps a little more optimistic than we should have been.”
Ratkovich, whose company has made a name for itself renovating historic buildings in Los Angeles, was quick to add that the “project is not dead, it just will be postponed until next year at the earliest.”
The proposed 13-acre mix of townhomes, tony shops, restaurants and high-rises is the largest and most expensive private development ever approved by the Long Beach City Council. The delay of the project, once hailed by city leaders as the key to the revival of the struggling downtown business district, was grim news but not unexpected. The recession, combined with the plummeting real estate market and defense cutbacks, has taken a heavy toll on the seaside city. Most recently, Long Beach lost its bid for a $3-billion Disney theme park, its largest developer declared bankruptcy and the Walt Disney Co. announced it will stop operating the Queen Mary and Spruce Goose tourist attractions.
“It’s just the reality of the times,” said Long Beach Planning Director Robert Paternoster. “There’s nothing we can do about it, but just stick by (the developers). We are going to have to go through the bad times in order to get to the good.”
City Councilman Evan Anderson Braude agreed the economy simply will not support the project at the moment.
“There are a whole lot of projects being put on hold now,” he said. “A lot of people are tight and worried about how the future is going to play out. When it comes to the Pike project, I feel badly for what’s happened. I hope a year is all they need, but frankly I’m not so sure.”
To be built on the site of the old Pike amusement park just south of Ocean Boulevard between Magnolia and Pine avenues, the project originally included high-rise office buildings, a hotel, a promenade of swank shops and restaurants and 1,250 apartments or condominiums.
After it was approved in 1989, its size sparked a legal battle between the developers and environmentalists who contended that the city approved the project without regard to its impact on traffic and air quality. The developers, Pike Properties Associates, a venture of the Ratkovich Co. and Enterprise Development West, eventually won the right to begin construction. By that time, two years had passed and the real estate market was in trouble, so the developers scratched plans for a high-rise hotel and office buildings in the first phase of construction and moved up construction of condominiums.
This year, the developers were to seek city approval to begin building 310 condominiums as well as 15,000 square feet of retail space. Pike Properties Associates plans to build the entire project in four stages, each tailored to the prevailing market conditions. The first phase, Ratkovich said, will cost about $65 million and will target people who want to live on the coast but generally can’t afford it. The average price of each unit will be less than $225,000, he said.
Ratkovich said that before construction can begin the nation’s economy must improve, the real estate market must level out and banks and life insurance companies must start investing in real estate again.
“We are going to continue to hope 1993 is our year,” he said. “We are not going to write this project off yet.”
Stalled Project The Pike project, a $1-billion village of townhomes, shops, restaurants and high-rises, is on hold because the developers are unable to get financing. Here is the site for the 13-acre project.
