Fashion City a Tough Deal to Stitch Together : Development: It’s taking longer than backers expected to get garment manufacturers to agree to move to proposed Hawthorne complex.
Developers say it is taking longer than expected to line up tenants for a $150-million complex in Hawthorne that would house one of the nation’s largest concentrations of garment wholesalers under one roof.
But the backers of Fashion City remain confident about the development, which would include a 700,000-square-foot mirrored glass building where garment wholesalers would sell their wares to wholesale buyers each year.
“It’s going to take longer then everyone thought,” said Bob Comstock, whose Manhattan Beach firm is developing the project. The delay, he said, results from “the long process of getting people signed up.”
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Comstock, The Seeley Co. in Torrance and the South Bay Assn. of Chambers of Commerce hope to lure about 700 tenants from downtown Los Angeles’ 32-year-old California Mart. The private complex, better known as CalMart, houses most of Southern California’s garment wholesalers, who generate $8 billion in business annually.
Some CalMart tenants, upset with high lease rates and problems with crime and homelessness downtown, formed an association last year to consider moving. Since then, the Fashion City group has tried to woo the tenants by holding cocktail receptions and advertising in industry trade journal ads. The group has also taken trips to New York to persuade major manufacturers to relocate their representatives in downtown Los Angeles.
The project, however, would be built only if the overwhelming majority of CalMart tenants agree to move, said Alan Schwartz, president-elect of the South Bay chamber. He said the odds that the CalMart tenants would stay put have always been “better than 50-50.”
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So far, about 250 tenants who would occupy 260,000 square feet of Fashion City space have signed non-binding letters indicating that they intend to move if the project is built, Comstock said.
To satisfy lenders, Fashion City organizers had hoped by year’s end to get tenants to submit letters of intent to occupy 50% to 70% of the proposed complex’s square footage. So far, letters of intent have been signed for only 37% of the space, Schwartz said.
“It will probably be another six months before we get (50% to 70%),” said Schwartz, whose grandfather started Torrance’s first retail department store in 1917. “Getting people to commit even to a letter of intent takes time. But we are absolutely encouraged by what has happened.”
To make the South Bay project more attractive, Comstock plans to develop an adjacent entertainment and retail complex similar to Universal CityWalk. The complex, which would be open to the public, would include interactive video arcades and movie theaters, as well as attractions similar to Universal’s Back to the Future ride and Disneyland’s Star Tours, Comstock said.
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The theme for the attractions could be the fashion industry, just as CityWalk is linked to the movie and TV business.
“There seems to be a need for this type of entertainment component,” Schwartz said. “We want to draw as much attention to the apparel industry as the entertainment industry gets.”
Fashion City’s major competitor in luring the CalMart tenants has been the Water Garden, a Santa Monica development with ponds and a park-like setting. But its developer, the J.H. Snyder Co., has been unable to line up financing, leading a CalMart tenants group that once favored the site to look elsewhere.
“We feel that (Snyder) is not one inch closer than it was a year ago,” said women’s apparel wholesaler Jeff Krinsky, a director of the tenants group. “Every time the phone rings we hope it is the Water Garden getting financing. I’ve grown a beard waiting.”
Snyder did not return a call for comment.
The tenants group now is nearing a deal to move to an existing building, Krinsky said. He declined to identify it, but said he would announce the deal “very soon.”
For its part, CalMart is trying to spruce up its image, increasing security and cutting rental rates. CalMart also has helped create downtown programs to put the homeless back to work, said spokesman David Stamper. Occupancy in the 1.5-million-square-foot center at 9th and Main streets has risen in the past few months, he said.
All along, CalMart officials have doubted that tenants who sign letters of intent to move will follow through and sign leases.
“It’s a dance with mirrors to try to create a project,” Stamper said. “. . . Our thinking through all of this is, we just do our business better.”
