By Andrew Khouri and Ben Poston
LOS ANGELES TIMES
An Orange County developer is proposing one of the most ambitious developments of the current real estate boom in downtown Los Angeles — a massive mixed-use complex with twin towers soaring 58 stories that would dramatically remake the largely low-rise Arts District.
The project by Irvine-based SunCal, at 6th and Alameda streets, would represent the migration of high-rises from Bunker Hill and South Park to downtown’s periphery as city officials push for more density to ease a housing shortage and encourage public transportation.
It would essentially add an entire new community on the edges of the Arts District, a neighborhood near the Los Angeles River that has been transformed from a gritty outpost, to an artistic hub, to an increasingly ritzy area that’s one of the hottest real estate markets in the country.
“Three words, in my opinion: It’s exciting; it’s bold; it’s innovative,” said Carol Schatz, president of the Central City Assn. business group, noting it could encourage more towers along an Alameda corridor dominated by warehouses.
The towers will probably face opposition by community members worried that it will change the neighborhood’s character.
“The height has not settled well with me, but as always, we’ll wait to hear from the community,” said area Councilman Jose Huizar, who added the rest of the project looks “spectacular” and fits the Arts District.
SunCal is proposing 1,736 residences, two hotels, shops and creative offices and a school on a lot now the site of two warehouses. About 430 of the residences would be condos, the rest apartments. There would also be 23,000 square feet of “art opportunity space” and two “major urban parks.”
SunCal purchased the 14.5-acre property for $130 million in March of last year. The developer, which specializes in master planned mixed-used communities including in Oxnard, in the San Francisco Bay Area and near Washington, D.C., is partnering on the Arts District development with a fund affiliated with Michael Dell, founder of Dell computers.
The project, known as 6AM, is several blocks from the Arts District’s heart, where lofts top $3,500 a month and people frequent high-end restaurants, breweries and galleries.
Instead, it’s proposed for a corner of the Arts District, a stretch of Alameda where there’s a steady flow of big-rigs that back up to loading docks at produce warehouses. Neighbors and visitors complain of grimy streets and bad air.
“The air is filthy,” said photographer Storm Foster, who lives in a loft in the area.
Hal Bastian, a development consultant, said SunCal feels comfortable proposing the development near Skid Row because of all the building downtown has experienced over the last two decades.
High-profile projects include Staples Center, L.A. Live, the Broad Museum, Disney Concert Hall and the tallest building on the West Coast, the Wilshire Grand, which is still under construction.
“We have been doing 22 years of foundation building, so this project can be built,” said Bastian, an admitted downtown booster.
Decades ago, few developers would have considered the Arts District suitable for investment, let alone two high-rise towers along Alameda.
Addicts shot up in the alleys. Artists leased empty warehouse space for dirt cheap. Many lived there illegally until the city passed an artist-in-residence ordinance in the early 1980s. Locals flocked to Al’s Bar, a neighborhood institution, to hear bands such as Nirvana, well before the group hit the big time.
Al’s closed in 2001 and in the last decade the area has seen heavy investment, mirroring the rest of downtown.
In July, Los Angeles developer Lowe Enterprises opened the Garey Building, which features 320 apartments, retail and restaurants off Santa Fe Avenue between 1st and 2nd streets.
In 2014, the massive, white One Santa Fe apartment building opened, earning the nickname “Empire State Building on its side” for its horizontal shape.
By the end of this year, a retail and office project called At Mateo is expected to finish construction and, according to its developer, “be activated from breakfast to nightcap, seven days a week.”
Now SunCal wants to go sky-high. On Friday the company’s chief executive, Bruce Elieff, and architect Pierre de Meuron of Herzog & de Meuron informally introduced 6AM to Los Angeles city officials, a SunCal spokesman said.
But whether the ambitious plan can be completed is another question.
No formal plans have been submitted to the city, and the proposal comes as developers race to file plans with the city, nervous over the Neighborhood Integrity Initiative, a March ballot measure that if passed would dramatically limit the ability to build more densely than for what land is currently zoned.
SunCal said the project would need a zoning change and a general plan amendment to build — the exact types of changes the ballot measure would crack down on.
SunCal’s proposal also comes amid growing concern over the level of development in downtown Los Angeles.
Though experts don’t foresee a crash as in 2008, there’s debate whether the top of the current cycle has been reached. Some lenders have grown wary of new projects and a handful of recently opened luxury apartments are offering concessions, such as free rent and free parking, to attract wealthy tenants.
In all, nearly 10,400 apartments and condos are under construction downtown, according to a July report from real estate firm Transwestern.
And SunCal, despite it substantive portfolio, has mistimed the development cycle before. In 2006, the firm beat out current GOP presidential candidate Donald Trump for a vacant lot at the border of Century City and Beverly Hills.
It planned a 45-story, wisp-thin tower of ultra-luxury condominiums designed by renowned Paris architect Jean Nouvel. But the real estate market soon crashed and SunCal, whose financier was Lehman Bros., lost control of the property after putting it into bankruptcy in 2008.
It similarly gave up marquee projects in Orange County, including the Marblehead development on a coastal bluff in San Clemente that is now under construction by another developer.
On Friday morning, Mike Parillo, an artist who has lived in a loft on nearby Factory Place since 2013, was out walking his dog, Jefe, on 6th Street near the proposed project.
In just three years, he has watched development in the Arts District explode while rising rents have forced many of his fellow artists out of the neighborhood.
He said the proposed project could dramatically change the aesthetic of the area.
“Sixty stories? That’s crazy,” Parillo said. “That seems out of place. It doesn’t even compute.”
Yet he acknowledged the development may just be the reality of an ever-changing L.A.
“It could be a natural progression depending on how things go in the next few years. It just seems like it’s going to be the Westside without the ocean view,” he said.
However, Bastian argued that the project is needed for the city as whole.
“We have a housing crisis, because it’s so difficult to build anything in this city,” he said. With 6AM, “we have an incredible opportunity for density.”