Two rundown 1920s-era buildings in Long Beach will be converted to a medical office complex as the city's historic downtown notches another addition to its budding revival along North Pine Avenue.
The $60-million development will provide offices for Molina Healthcare Inc., a Long Beach medical services provider expected to grow in the next few years by serving more clients through the federal Affordable Care Act, also known as Obamacare.
Anchoring the development that will cover a city block is the former headquarters of the Long Beach Press-Telegram. The complex where the daily newspaper was once produced and printed dates from 1926. The Press-Telegram sold the property in 2005 and moved to rented offices south of Ocean Boulevard.
Also part of the project by local developer Millworks is the Meeker-Baker building, a vacant two-story retail and office building completed in 1924 at Pine and 7th Street.
Both historic buildings will be renovated, said Michelle Molina, managing partner of Millworks. Plans call for preservation of original design features, including the Press-Telegram's exterior sign and marble floors in the lobby. The Meeker-Baker building's facade will be saved.
Today, the buildings are at the heart of a major redevelopment effort in the state's seventh-largest city, with a population of about 470,000. Long Beach adopted new zoning regulations last year in an effort to speed development in the historic downtown north of 3rd Street, Molina said. Some new housing and shops have been built near the Molinas' property as new development edges into the city's historic core.
"We are hoping it will become a little art enclave and technology district," she said. "Right now property values and rents are low."
Renovation of the Press Telegram building is set for completion this summer, and the Meeker-Baker building is to open in fall 2014. The project will also include about 100,000 square feet of new construction on the site to increase Molina Healthcare's total office space to 200,000 square feet for 1,000 employees.
The company went public in 2003, and in 2010 it was the largest Latino-owned company in the U.S. in terms of revenue, according to Hispanic Business magazine. It has nearly 5,400 employees companywide. The firm's headquarters will remain at two 14-story towers the company bought in 2011 for $81 million in downtown Long Beach between Ocean Boulevard and Shoreline Drive, across the street from the Long Beach World Trade Center.
The company was founded in 1980 by physician C. David Molina, and is run by Molina family members, including the founder's two sons: Chief Executive J. Mario Molina and Chief Financial Officer John Molina.
In 2005, John Molina and his wife, Michelle, invested in a planned project to turn the Press-Telegram building into "workforce" housing, she said. The housing development foundered during the economic downturn and the Molinas ended up in control of the property, she said.
Their development company, Millworks, will rent the space to Molina Healthcare for about $6.5 million a year, according to the healthcare company's 2012 annual report.
Downtown L.A. site is for sale
A vast parcel of empty land in downtown Los Angeles — just east of the Harbor Freeway and eyed by developers for years — has hit the market and could command as much as $140 million from a buyer.
It was intended for one of the biggest, most dramatic proposed developments of the 1980s commercial real estate boom. Known as Metropolis, the 6.3-acre tract lies between the thriving Staples Center-L.A. Live entertainment complex and the downtown financial district.
Currently used as a parking lot, the property already has the city's preliminary approval for construction of 1.65 million square feet of hotels, multifamily housing, offices and stores.
The parcel was assembled in the late 1980s by developers who promised a "city within a city" on the block bordered by the Harbor Freeway and Francisco, 8th and 9th streets.
Famed New York architect Michael Graves won an international design competition and created an elaborate — but inward looking — design for Metropolis in his signature post-modern style, said Patrick Spillane, president of IDS Real Estate Group.
It never came to pass. Spillane's Los Angeles company and a pension fund bought the property in 2005 with the intention of building a 33-story condominium tower, but the housing downturn a few years later scotched those plans, he said.
No price for the property has been set, but downtown land recently traded for nearly $500 a square foot, which could translate to as much as $140 million for the Metropolis land.
Urban planning tastes have changed since Graves envisioned Metropolis as a cluster of towers surrounding a central courtyard. Developers now would probably try to extend the burgeoning entertainment and hotel district north of L.A. Live into the space, said real estate broker Laurie Lustig-Bower of CBRE Group Inc., who represents the sellers.
Along with development, it might become a pedestrian-oriented corridor connecting the downtown office district with the recreation and convention center, she said. "Developers have the chance to literally brand the downtown skyline with this site."