DOWNTOWN | Development News

[LosAngelesSportsFan]

future 888? are you talking about the embassy auditorium on grand and 9th? its being converted to a boutique hotel. unfortunately, the owner are the same as the the Clark hotel and they are working at a drunk snails pace

[pwright1]

Walked past the new Figaro's Bistro on Broadway today. Looks like its just
about ready to open.
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Also walked by the old Woolworths where Ross will be. The windows were all opened and the one of the front doors was wide opened. Of course I took a peek.
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The Broad is coming along. I was pretty excited when I saw it tonight.
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Earlier today I had lunch at the new Coco Laurent. I have to say my angus burger and fries were A++ and that ice tea was excellent.
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That's it for now.

[unmentioned]

That sidewalk seating is fantaaaastic

[pesto]

Very nice. These are another step toward creating a booming downtown. First get some security and safety, which attracts a few people. Then some facilities for the new arrivals (markets, the basics). Then the clubs, bar and cheap restaurants. Then the young middle class and shopping and restaurants for them. Then the employers, once it becomes a PLUS to work downtown, not a minus.

This is how a desirable neighborhood is built, not with mega-projects.

[klamedia]

Agreed. This is wonderful!

[Marco Polo]

Thanks for the photos pwright1 !!!

Downtown is gradually developing, so nice to see it coming along.

[soup or man]

Originally Posted by pesto

Very nice. These are another step toward creating a booming downtown. First get some security and safety, which attracts a few people. Then some facilities for the new arrivals (markets, the basics). Then the clubs, bar and cheap restaurants. Then the young middle class and shopping and restaurants for them. Then the employers, once it becomes a PLUS to work downtown, not a minus.

This is how a desirable neighborhood is built, not with mega-projects.

100% agree. And if you've noticed, this is how DTLA has been redeveloping over the past 5-7 years. 2013 I think will see a lot more residential projects being announced (be it a conversion in the Historic Core or a ground up in South Park).

[losangelino]

Prominent Developer Buying Macy’s Plaza

The Ratkovich Company has a deal in place to buy the faded mixed-used complex Macy's Plaza, which the firm would renovate.


by Ryan Vaillancourt, Staff Writer | 1 comment

DOWNTOWN LOS ANGELES - Prominent developer The Ratkovich Company is poised to acquire and launch a major renovation of Macy’s Plaza, the faded Seventh Street mall, office and hotel complex.

The firm is in escrow to purchase the brick-clad, fortress-like property that houses a Macy’s department store from owner Jamison Services, Inc. The pending sale and proposed renovation could signal a major change in Downtown’s retail landscape. Despite the Macy’s and other name brand retailers such as Victoria’s Secret and Bath & Body Works, the mall has never flourished.

The deal was verified by several sources familiar with the negotiations but who are not authorized to comment. Wayne Ratkovich, president and CEO of the Downtown-based development company, declined to speak about the transaction. Jamison Chief Executive Officer David Lee did not respond to requests for comment.

According to sources familiar with the deal, Ratkovich Co. has financing in place to buy the complex for an undisclosed price and plans to do a series of upgrades aimed at making the property a centerpiece of Downtown retail. The shopping center is a short walk from FIGat7th, where Brookfield Properties recently completed a $40 million renovation anchored by a Target.

The Macy’s Plaza structure, which opened in 1973, takes up the entire block bounded by Seventh, Eighth, Hope and Flower streets. It is known for towering walls of mostly windowless brick that close off the complex from pedestrians, as well as a dizzying parking complex with a spiraling ramp.

Ratkovich Co.’s proposed renovation would aim to better integrate the property with street life, including the busy pedestrian corridor of Seventh Street. One design option under consideration involves removing the glass atrium that covers the retail portion, rendering that part of the mall an outdoor shopping area.

Jamison bought the complex, which is also home to the 487-room Sheraton Los Angeles Downtown hotel and a 24-story, 700,000-square-foot office tower, in 2005. Since then the firm, which was founded by Lee and has a history of spending minimally on improvements in its Downtown properties, has done little to upgrade the facility.

Some Downtown business advocates hope that the investment in the property will help it become a more vibrant commercial attraction that could add to the retail momentum generated by Target and FIGat7th.

“We are excited about the prospects of having Wayne Ratkovich reposition this important property,” said Carol Schatz, president and CEO of the Central City Association and the Downtown Center Business Improvement District. “He is a noted and well respected urban developer who will help to integrate this property with Seventh Street, Downtown’s major retail spine, and the rest of Downtown. We look forward to seeing Wayne’s vision for this mammoth project.”

Change Is Coming

There is precedent in the region for redesigning closed-in mall properties with an eye toward more pedestrian access and open space. Derrick Moore, a principal at real estate services firm Avison Young, said that a renovation of Macy’s Plaza could take a cue from The Macerich Company’s redevelopment in 2010 of Santa Monica Place.

Macerich oversaw a two-year, $265 million upgrade of the 30-year-old mall into an open-air shopping complex.

“Santa Monica Place also had your typical retail offerings that one would find in a mall, but what it changed was how the public interacts with that space,” Moore said.

This would mark another Downtown move for Ratkovich, who has a long history in the area. Ratkovich Co. has developed several Downtown properties including the Fashion Institute of Design and Merchandising campus and renovations of 800 Wilshire, the Fine Arts Building and the Oviatt Building.

In the early 1980s, Ratkovich bought and restored two Art Deco landmarks just west of Downtown, the Wiltern Theatre and the neighboring Pellisier Building. The firm also owns a massive mixed use complex in Alhambra called the Alhambra. According to Ratkovich Co.’s website, the complex’s office space was 30% occupied when the firm acquired it in 2005. New tenants include the USC Keck School of Medicine, Southwest Administrators, Tenet Healthcare and AT&T.

Lee, who has a reputation for not speaking to the media, is somewhat of a quiet tycoon in Los Angeles commercial real estate. Jamison Services owns or manages some 70 office buildings in the city, including four Downtown complexes. It is also in escrow to sell the Banco Popular Building at Fourth and Spring streets to developer Allen Gross, who is planning to convert it to apartments.

As for the nearly 700,000-square-foot office tower that rises on the northwest corner of Macy’s Plaza, Ratkovich Co.’s plan is to reposition it as a creative office property, sources said. Ratkovich would be following the lead of real estate companies such as Rising Realty Partners and Evoq Properties, which are increasingly targeting tenants from creative industries like technology, fashion and design.

The timeline for finalizing the Macy’s Plaza sale is uncertain, though sources familiar with the deal said Ratkovich hopes to close the transaction by May.

A representative of Macy’s, the anchor of the mall, declined to comment.

Contact Ryan Vaillancourt at ryan@downtownnews.com.

[LosAngelesSportsFan]

im eagerly awaiting more details. obviously, it cant be worse than what it is now, but i hope its a drastic change like santa monica place. downtown LA needs it

[pesto]

That is exciting news! You can easily picture re-doing the 7th St. side for more openness.

To me the big question is how much can be done on the other sides where traffic is much lighter (for now at least) and the "fortress" problem much worse. Even SM Place didn't go great on the sides not facing the 3rd St. Promenade.

I wonder if something radical like conversion of some parking to residential with a separate entrance would be possible.

[LosAngelesSportsFan]

Originally Posted by pesto

That is exciting news! You can easily picture re-doing the 7th St. side for more openness.

To me the big question is how much can be done on the other sides where traffic is much lighter (for now at least) and the "fortress" problem much worse. Even SM Place didn't go great on the sides not facing the 3rd St. Promenade.

I wonder if something radical like conversion of some parking to residential with a separate entrance would be possible.

not a bad idea regarding the parking...

the 8th street side is where a lot of action will be happening if they are smart.

[klamedia]

Can't be too radical with a 20 story hotel sitting on top of it all. Hope they open it up though.

[pesto]

Originally Posted by klamedia

Can't be too radical with a 20 story hotel sitting on top of it all. Hope they open it up though.

My recollection is that the parking has many levels and is entered by a vertigo-inducing spiral. This has got to change in any event or they will bomb as a place to go shopping.

Much of the tower is office and I would guess pretty empty, but you're probably right that it takes a lot more than I would think to change parking and/or office to residential.

[blackcat23]

I wonder how much they're willing to invest in this remodel.

That cluster fuck of a parking garage can't really be fixed since it literally sits on top of the department store. It doesn't sound like they're planning on tearing it down, based on this bit from Brigham's blog:

And what will happen to Macy’s? Apparently they are staying put. According to a tip sent in last night, a rep from Macy’s recently disclosed information regarding a “multi-million dollar upgrade” that includes a new “tourist visitor center” concept called Visit Macy’s USA that are only at select properties in New York, San Francisco, Chicago, and Philadelphia. It will be interesting to see how Macy’s can be upgraded to “flagship status” without tearing down the existing structure and starting over.

If this turns out to be true, it's a gigantic step for retail in downtown Los Angeles.

[Dale]

Hey guys, good chance that I may be moving to LA. My sister is already there and seems the city would be a good fit for my business. And it's especially exciting to see how moving there coincides with a rising wave of exciting developments downtown and in the metro!

[pesto]

Dale: good luck! Unfortunately, it seems like there is plenty of available office space DT (I just saw that the US Bank Tower is going into bankruptcy restructuring with very high vacancy rates).

I wouldn't be surprised to see Macy's Plaza get rid of the offices altogether since the recent elections really hurt the potential for new investment in businesses, and DT was not the strongest office market to begin with. It will be interesting to see if the retail that is already there can be expanded. If not, hotel and residential seem to be the only real choices.

[Dale]

Originally Posted by pesto

Dale: good luck! Unfortunately, it seems like there is plenty of available office space DT (I just saw that the US Bank Tower is going into bankruptcy restructuring with very high vacancy rates).

I wouldn't be surprised to see Macy's Plaza get rid of the offices altogether since the recent elections really hurt the potential for new investment in businesses, and DT was not the strongest office market to begin with. It will be interesting to see if the retail that is already there can be expanded. If not, hotel and residential seem to be the only real choices.

Thanks! And I did read where there may be extenuating circumstances regarding US Bank. What I'd like to know is how other iconic towers are faring.

[blackcat23]

Originally Posted by Dale

Thanks! And I did read where there may be extenuating circumstances regarding US Bank. What I'd like to know is how other iconic towers are faring.

Since you mentioned it, I decided to compute the vacancy for the other downtown buildings owned by MPG Office Trust.

Based on the data provided, the combined vacancy for the KPMG and Wells Fargo Towers is only 5%. Pretty good, especially considering the economic circumstances.

Besides that, the rest of their properties are struggling.

One California Plaza: 40%
Gas Company Tower: 30%
777 Tower: 18%

The US Bank tower, as the Wall Street Journal mentioned, is 42% empty.

[Dale]

Originally Posted by blackcat23

Since you mentioned it, I decided to compute the vacancy for the other downtown buildings owned by MPG Office Trust.

Based on the data provided, the combined vacancy for the KPMG and Wells Fargo Towers is only 5%. Pretty good, especially considering the economic circumstances.

Besides that, the rest of their properties are struggling.

One California Plaza: 40%
Gas Company Tower: 30%
777 Tower: 18%

The US Bank tower, as the Wall Street Journal mentioned, is 42% empty.

What is CBD vacancy overall ? Are you as concerned as Citywatch that Wilshire Grand will have great difficulty reeling in office tenants ?

[LosAngelesSportsFan]

Originally Posted by pesto

Dale: good luck! Unfortunately, it seems like there is plenty of available office space DT (I just saw that the US Bank Tower is going into bankruptcy restructuring with very high vacancy rates).

I wouldn't be surprised to see Macy's Plaza get rid of the offices altogether since the recent elections really hurt the potential for new investment in businesses, and DT was not the strongest office market to begin with. It will be interesting to see if the retail that is already there can be expanded. If not, hotel and residential seem to be the only real choices.

This may be the funniest post ever. you are so transparent.

anyways,

Dale, im a commercial Realtor and much of my business is in downtown LA. From personal experience and from conversing with fellow Realtors and building managers, we are seeing a lot of new activity in downtown in the last few months. Interest is way up and the shift is towards creatives business and office space. The area vacancy rate is roughly 17 - 19% but the main drags are the MPG properties as were shown above. They do a horrible job of marketing their buildings and honestly, its a shame. The downtown market is very interesting as it provides such varying options, from historic rehabs to trophy buildings.