Developer Alters Plans for Large Downtown Site

A developer who was planning to build a big produce market near downtown Los Angeles now hopes to court high-tech tenants instead.

The proposed Los Angeles Tech Campus would combine about 250,000 square feet of existing industrial space with about 1.3 million square feet of new space on 33 acres at Washington Boulevard and Santa Fe Street, according to T.C. Macker, a Grubb & Ellis broker who is marketing the project for developer Richard Meruelo.

Meruelo’s development was envisioned as a combination industrial park and produce center last summer when the Los Angeles City Council chose him as the developer for the site. His plans now emphasize telecommunications. Prospective tenants would include switching operations, data centers, Web-hosting companies, disaster recovery specialists or other tenants with high bandwidth requirements.

“We’re trying to get a tenant to kick off the project,” Macker said. The marketing team is pitching Meruelo’s project as one of the few spaces in Los Angeles where high-tech companies can get big chunks of space--100,000 square feet--on a single floor.

Meruelo became the prospective developer of the site after the city’s Office of Economic Development sought bids to develop the property, which the city has an option to purchase from the state.

The state once planned to build a prison on the site, but local opposition quashed that notion. The proposed telecom project would include 16.9 acres owned by the state, plus adjacent property owned by Meruelo, said Rocky Delgadillo, deputy mayor for economic development.

Meruelo and the city have yet to forge a formal development agreement for the property, but the city expects to acquire the land from the state and sell it to Meruelo, Delgadillo said. The city also might work out a joint-venture agreement through the Community Redevelopment Agency.

“We’re still in negotiations, so we don’t know all of the details yet,” Delgadillo said.

While the city is wary of big telecommunications switching stations taking over office buildings downtown, it would welcome them at a development like L.A. Tech Campus, Delgadillo said.

Meruelo owns several properties in downtown Los Angeles, including the 300,000-square-foot former Yaohan Plaza in Little Tokyo and a former S.E. Rykoff facility.

Once the city and Meruelo have a formal agreement, the existing industrial buildings could be renovated in about three months and new space could be built by the end of next year, Macker said.