Mid-Wilshire Making a Comeback
It was once one of Los Angeles’ grandest streets, with its posh department stores, fine restaurants and swanky corporate addresses. But then the stretch of Wilshire Boulevard fell hard as crime surged and businesses fled in the 1980s.
Nearly a decade later, the one-mile commercial district between Hoover Avenue and Wilton Place, now known as Wilshire Center, is stirring again. Office buildings that had been drained of a third of their tenants are starting to fill. Shop windows are stretched with banner signs of new retailers.
The signs aren’t lettered just in English, but also in Korean.
The former home of U.S. politicians and Fortune 500 companies has become Main Street for an increasingly powerful group of South Korean immigrants, who in recent years have managed to grow their businesses and invest in real estate despite a crushing financial crisis in their former homeland.
The question now facing the district is whether the immigrant-led recovery can move to the next level. A small group of property owners, real estate brokers and architects are campaigning to lure mainstream businesses back to Wilshire Center, to prove that corporate America and immigrant businesses can work side by side. But others believe Korean investment has enough steam to keep remaking the historically rich commercial strip that divides Koreatown in half.
Recently, Dr. David Lee, a San Fernando internist, bought three more high-profile buildings, including John Hancock Tower at 3600 Wilshire for $26 million and the 3660 Wilshire office building for $14 million . The purchases bring the value of his partnerships’ holdings in the strip to more than $200 million, or more than 2.5 million square feet, all bought in the last five years.
“The Korean emergence has been tremendous,” says Michael Dunn, executive vice president of real estate brokerage Charles Dunn Co. “They’ve had their own rough going, but clearly in the past three or four years they’ve certainly sustained and improved the area.”
Similar neighborhood turnarounds are being played out in major cities across the country as second and third generations of immigrants produce entrepreneurs powerful enough to transform entire commercial areas, especially urban districts corporate America has left behind, such as Japantown in Seattle and Flushing, Queens in New York. “As these places get older, they begin to be unfashionable and people aren’t willing to spend high amounts of rent on them,” says Alexander Garvin, urban planning professor at Yale University and author of “American Cities: What Works and What Doesn’t.”
As smaller immigrant businesses move in, Garvin says, their presence helps hold down crime and keeps these out-of-favor properties on tax rolls. “They [immigrants] see that society is abandoning something that is valuable,” Garvin said.
Since 1990, Korean investors have snapped up about half the buildings along Wilshire Center--more than 3.5 million square feet of space. And real estate brokers estimate that Korean companies, once unable to afford or reluctant to rent office space on Wilshire Boulevard, now account for more than 40% of the tenants in that area’s stately but faded office towers.
The Korean influence is stamped on some of Wilshire Boulevard’s largest buildings. Once emblazoned with the names of such Wall Street stalwarts as IBM, Texaco and Arco, high-rises there now hold names of Korean-American-owned banks including Wilshire State Bank, California Korea Bank and Hanmi Bank.
National food service chains Coco’s Restaurant & Bakery and Pasqua moved out too. They were replaced by smaller Korean businesses catering to a mix of ethnicities. Furosato, for instance, serves Korean and Japanese food. The site of the famous Brown Derby restaurant, a hat-shaped hangout for businessmen and movie stars, was long ago converted to a peach and turquoise two-story mini-mall. Its “derby” crown has been painted silver and serves as the domed roof for the Cafe Namu Hana.
Indeed, the area’s popular night spots cater mostly to young Korean-American twentysomethings. One such spot is Palm Tree LA, a bar in the former I. Magnin building that boasts “cosmic bowling, “ performed under a black light with fluorescent balls and pins.
There’s even been talk of moving an annual Korean culture parade to Wilshire from Olympic Boulevard, long considered the backbone of Koreatown.
However, not all of the community’s leaders think that Korean- and Korean-American-owned businesses are growing fast enough to turn around the once-glorious office district. Many, even some in Koreatown’s business community, say the huge corporations that left earlier this decade must return before the district will thrive again.
The Asian financial crisis has dampened Koreatown growth as subsidiaries of Korean-based companies and other companies trading with South Korea have closed their doors or cut back operations, says Harrison Kim, executive director of the Korean-American Chamber of Commerce.
Working to Keep the Area Diverse
Kim’s group has been cooperating with other business associations, including the Wilshire Center Business Improvement District, in an attempt to get non-Korean businesses to set up shop. Many chamber members have agreed to a series of concessions, such as not referring to Wilshire Boulevard as Koreatown, and limiting the use of Korean characters on signs. Kim encourages businesses to cater more to non-Korean customers. “We want to give the impression that we’re not moving in and pushing out other types of communities,” he says.
New Seoul Travel Agency now advertises South American and Mexican airliners in their window, as well as such Pacific Rim carriers as Asiana and Korean Air. To cater to the estimated 600,000 primarily Latino residents in the surrounding neighborhoods, some restaurants now serve Mexican food as well as noodles, Korean barbecue and fish. Gary Russell, director of the business improvement district, hesitates to even acknowledge the contributions of Korean-American businesses, for fear of alienating other ethnic groups, such as Armenians and Latinos, who also operate businesses in the area.
“This is a multicultural, international community,” Russell says. “We want to focus on small businesses and being inclusive.”
Russell and other property owners started the business improvement district four years ago in an attempt to spruce up Mid-Wilshire’s image, which had been pictured on television as a flaming battleground during the 1992 riots. Escalating crime soured many businesses on the location.
Their first step was to try to eliminate the name “Mid-Wilshire” and the stigma attached to it. Enlisting Mayor Richard Riordan’s help, they rechristened the district Wilshire Center and posted signs on Wilshire Boulevard. Then, through property assessments, the improvement district spent nearly $6 million to plant saplings in the medians and put giant concrete planters of begonias along the sidewalks. A daytime police patrol was hired to cruise the streets and glossy brochures were printed, touting the area as the business “hub” of Los Angeles.
“We turned this place around and put it back on the map as a viable place for business,” Russell says. Viable, yes, real estate brokers agree, with its cleaner, safer streets. But still unattractive to large mainstream companies, given its aging buildings, lack of fine dining and distance from major freeways.
No Longer the Hub of Los Angeles
Mid-Wilshire’s decline actually started in the early 1980s. Executives began moving their firms to newer buildings downtown, or to Century City to be closer to their Westside homes. The 1992 riots, the 1994 Northridge earthquake and damage caused by Metro Rail construction in the early to mid-1990s fueled the exodus.
But most landlords and shop owners say the most devastating blow was the Los Angeles Unified School District’s 1990 announcement that it planned to develop a high school at the site of the Ambassador Hotel, which had been shuttered five years before. “That threw a lot of panic into the bigger companies,” says John Kim, a vice president with Lee’s Jamison Properties. “They didn’t want to be next to a bunch of 14-, 15- and 16-year-old students.”
The school district shelved its plans in 1994 , and the land was transferred to a series of development partnerships. But plans for redeveloping the massive property are still in early stages.
By the early 1990s, most of the area’s tony restaurants had closed, and more often than not there was glass scattered on the curbs from car break-ins. The number of panhandlers roaming the sidewalks kept growing.
As companies fled, so did customers for George B. Harb’s suit and tailoring shop in the historic Gaylord apartment building across from the Ambassador Hotel. Harb had moved into the area when it was filled with such Fortune 500 powerhouses as IBM and Traveler’s Insurance, and marketing firms such as Grey Advertising. Executives dined and drank at the Ambassador’s Cocoanut Grove, the Brown Derby and Perrino’s restaurant.
“My clients said, ‘George I don’t want to fight my way from the parking lot to the store.”’ Three years ago, Harb shuttered G.B. Harb & Son and moved to Beverly Hills. He still owns the Gaylord building.
By then, real estate brokers say, the only groups who still considered the area the “hub” of Los Angeles were a growing group of second-generation Korean-American professionals used to doing business and dining in the area.
Korean-American shopping center owners began hiring private security guards. And the members of various restaurant and grocery trade groups began meeting regularly with LAPD officials to report problems and discuss concerns.
Gradually, the area’s small-business owners--many of whom had initially been reluctant to meet with police because of a language barrier--had become more active than their non-Asian counterparts.
“In the last three years, we’ve seen violent crime go down an average of 30%,” says LAPD public affairs officer Jason Lee, who used to patrol the streets of Mid-Wilshire. And today, he says, there are three Korean-American board members on the board of LAPD’s Community-Police Advisory Board for the Wilshire area.
As business owners began to band together to make the streets safer, a handful of investors began to circle the area’s largest buildings in search of the next big bargain. The biggest investor has been Dr. David Lee, bankrolled by investors both here and abroad. Since 1994, Lee has purchased 15 buildings in Wilshire Center, including Equitable Plaza, John Hancock and Wilshire Park Place.
These purchases may have seemed risky five years ago, but with vacancy down to an average of 10% at his buildings, cash from rents now covers his debt payments. “In much of our buildings, we’ve been able to raise rents,” John Kim says.
Overall, office vacancy in the Mid-Wilshire area has dipped from a high of 34% in 1994 to about 25% now--still high, brokers say, but a marked improvement. This demand for space also has boosted rents, which had bottomed out at an average of 82 cents per square foot per month in 1993, to an average of $1.15 in the first quarter of 1999, according to Grubb & Ellis Co.
“The Wilshire market is going to take a little more time, but eventually there’s going to be a shortage of [office] supply,” says Michael M. Lee, managing director of Charles Dunn Co.
Others say the area’s recovery hinges on the Metro Rail extension to Hollywood, which is expected to open in May, and the planned redevelopment of the Ambassador Hotel property into a multilevel retail and entertainment center with restaurants, cinemas and large discount stores.
“I think the best thing that could happen to this area is if they had a great movie theater,” says LeVon Arabatlian of LeVon’s Hair Boutique in Equitable Plaza. “If they could accomplish that, more restaurants would go in and more people would come here.”
Arabatlian longs for the days in the mid-1980s when groups of women from IBM and other big companies used to go out at lunch to shop or get their hair and nails done. “It’s just not the same with the small businesses,” he says. “They don’t leave the office as much.”
Korean-American business officials claim new businesses are being formed at a rapid clip, and a handful of small entertainment companies such as Internet studios and production companies have moved in, lured by the cheap rents and central location.
Garvin compares the change in Mid-Wilshire to the evolution of the South of Market area in San Francisco more than a decade ago. “Areas like this are important, because they not only serve as incubators, but they prevent the deterioration of our cities.”
Already, the area’s handful of historic apartment buildings, like the Gaylord and the Talmadge, are full, landlords say. Tenants are no longer primarily Hancock Park doyennes who have given up taking care of large houses. Among the new residents are actors, producers and other industry types lured by the district’s proximity to Hollywood, its city views and its intricate architecture.
Harb says even the H.M.S Bounty, the gritty nautical-themed bar in the bottom of the Gaylord that used to attract a much older crowd, is starting to lure hipsters who come for its strong drinks and big-band jukebox.
“Thursday, Friday and Saturday you can’t even get in after 9:30,” Harb says. “It just boggles my mind.”
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Wilshire Renaissance
The stretch of Wilshire Boulevard between Hoover Street and Wilton Place holds a storied place in Los Angeles’ past as a business and recreational hub. Corprate American largely abandoned the district now known as Wilshire Center, but South Korean immigrants and other property owners plan to reinvigorate the famed boulevard. Here are some landmarks:
1. Wiltern Theatre
2. Wilshire Temple
3. Central Plaza office and retail complex
4. Wilshire Christian Church
5. Equitable Plaza high-rise
6. Brown Derby Plaza
7. Ambassador Hotel
8. Talmadge Apartments
9. Wilshire Galleria (formerly I. Maginin department store)
10. Southwestern University School of Law (formerly Bullock’s Wilshire)
