Rental Units Are Proposed for Downtown
Encouraged by a string of new real estate projects downtown, a Los Angeles developer is trying to turn a dilapidated and mostly vacant stretch of 4th Street into 250 apartments that would command market rates.
Tom Gilmore of Gilmore Associates has received a financing commitment from lender Finova Capital and agreed to pay $7.5 million for two turn-of-the-century structures, including the 500,000-square-foot Farmers & Merchant’s bank complex on 4th Street and the San Fernando Building at 400 S. Main St. The purchases are expected to close in the middle of this month. Gilmore also has struck a partnership with the owner of the adjacent Continental Building, which will be included as a phase of the project. He expects to spend $22 million renovating all of the buildings.
Beginning in August, Gilmore says he will gut the San Fernando building and convert it to 98 one- and two-bedroom apartments and lofts ranging from 600 to 1,700 square feet. The units, which would rent monthly for about $1 a square foot, would be ready for occupancy beginning December 1999.
Gilmore says he expects to receive permanent financing from the Department of Housing and Urban Development for the project, tentatively dubbed the Old Bank District, although he has not yet lined up financing for construction.
The ambitious project would be the first new market-rate rental housing built downtown since the early 1990s, when Museum Tower was opened on Bunker Hill, analysts say, and a big gamble, considering the 700,000-square-foot complex’s location near downtown’s skid row.
“It would be attractive for artists because of its high ceilings and window space, but I think it’s a tremendous stretch,” says Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. He describes the location as desolate and says the lack of such nearby amenities as a grocery store could make it a tough sell for many professionals.
Gilmore says he thinks the project will draw artists, students and state employees who work in the Ronald Reagan building and the nearly renovated Junipero Serra building just blocks away. He also plans to expand a parking garage already on site, and lease 60,000 square feet in the bottom floor to retailers and inexpensive restaurants.
The Old Bank District is one of several housing projects that have been proposed for downtown recently as such developments as Staples Center draw attention to the area, according to Don Spivack, deputy administrator of the Community Redevelopment Agency. Other apartments are planned just west of the Harbor Freeway near the arena and in the Subway Terminal building on Hill Street.
“Occupancies are quite high and land prices have come down, which makes it easier to look at housing,” Spivack says. “I think this [project] has the bulk and scale to transform the area all on its own.”
