You may have heard of the nearly $2 Billion Downtown CRA mixed use project called, LA LIVE. (A Ritz Carlton Condo/Hotel, Marriott Hotel, PF Changs, Movie Theaters, Specialty Retail and open space. [If you are a rich billionaire visiting from Asia, you will love investing in this area! If you are a business or organization planning a convention near the convention center, well you better try Vegas, this will price the city right out of the ballpark!]
Plus a few other minor issues I am concerned about: Like the fact that there is no wat the City can be serious about thinking they can build another Universal City Walk Type project near Staples Center. They might be able to get some of it approved and built, but this is "pie-in-the-sky" fantasy land talk.
So just when you think there isn't enough demand for more five start hotels, luxury condos (instead of a range of affordable, middle and upper level residential housing for workers in the area), you forgot to factor in the fact that there is another OVER $2 billion five star hotel, luxury condo, specialy retail, restaurant and open space project to compete with the minimal demand. It's called...drumroll please...because it really deserves a prodigious, magestic, regal, fantastic, tribute of an introduction...
ELI BROAD & CORPORATE WELFARE FUNDSUCKERS INC'S...GRAND AVENUE PROJECT!!!
THE SAVIOR OF THE CITY, REGION AND WORLD!!! We are just lucky to have it. (Or at least have the approval to start spending the money!) Wikipedia on Grand Ave Project
I'm sure you will be reading much more about the overall details of the project (specifics of what it includes, business plan, comments from experts and community leaders, and the whole enchilada. Because how could you not? It's the biggest, most interspicably intertwined project in City, State or US History. Because you have the CRA, City Council, County -- AND, a private developer, Related Co. (working with CALPER, the pension money people who fund MacFarlane, who work with Related) ALL coming together for this one massive project, that has part of the details, sort of worked out...and they'll figure out the rest as they go along. (A $2 billion dollar starting point of a "wink and a handshake" to allow everyone to start spending and making the money!)
The city can barely agree on filling a pothole, but this “most complicated project ever” requires the CRA, County, City Council and Related Co. (the developer) to all agree.
They already had to go back and add over $100 million for construction due to rising construction costs (and those are only going to continue to rise, in part due to cement shortages due to massive construction around the globe).
OH MY GOODNESS...IT SAYS, “The critical goal of this Project from it’s inception has been to create the civic park for all Angelinos to enjoy." You mean to tell me creating of a park we already have is THE critical goal? Man, nice priorities. I guess skid row is less important than creating a park. This critically needed park is described as festivals, concerts, markets, but most importantly and most critically, “passive recreation.”
It will provide an “oasis” for residents, workers and tourists. How about an AD HOC committee addressing, “The critical need to create an oasis for passive recreation.”
“The reinvention of a much underutilized and inaccessible open space is one of the most significant community benefits that will result from the project.” (If you want to do that, you don’t have to spend $2 billion and give away the farm, I mean city. Meanwhile, if that’s one of the most significant benefits, I am not impressed.)
Shade, dining and entertainment are also noted benefits. (Shade, I’ll say…see EIR report. And if there is ONE thing this city is lacking, it’s dining and entertainment. I’m not at all concerned about the demand for this project!)
The plan is proud to describe the amenities as BOTIQUE RESTARAUNTS AND SPECIALY SHOPS. That ain’t public benefit, y’all…
Second and third phases will be implemented as market conditions warrant. YIKES! What if they don’t. NOW WE’RE STUCK WITH A GIANT VERSION OF THE CHILDRENS MUSEUM BUT WAY WORSE!
Did I see the original start date was set for Dec '06, but had to be pushed back nearly a year, to Oct '07 -- and is subject to further extention and delays throughout the three phases? GOOD! That should allow plenty of time for construction costs to continue to skyrocket.
Part of the problem why the date was pushed back already is over the slight problem that the project is so complicated, they already can't agree on things/hammer out phase one details (see page 12); and they need more time to get the entitlements. (I’m building a new football stadium for Councilmember Parks, I just have to work out those details, too.)
Regarding the County office building that may, or may not, have to be demolished and rebuilt itself (so they are waiting to see what happens there, even though they are going ahead with the park) -- status went from “not been specifically addressed” to “County may exercise option and notify related. (Notify them that they are screwed, and need to demolish and rebuild, I guess.)
I hope LACER pension money isn’t being invested into this project, because MacFarlane works with Related Co (the project developers) elsewhere in the city.
And if actually HAD any pension money to invest, I would put in a stipulation that none of it may be invested in this risky, speculative, un-necessary project, with only detail for one (of three phases) worked out, and no guarantee that the project has enough funding to even be completed. (And all kinds of loopholes that allow developers to "filp" the project to new operators, once any part (office, housing, retail) is completed -- AND allows developers to scale back on the number of affordable housing units required.
Why pension money is risky investment: The City is tied in to the success or failure of this project with the private developers (Related) for the term of the 99 year lease. If construction costs over-run, the City gets hit, if we can’t find someone to build the five star Mandarin Hotel (and there is concern that we may not find someone willing to build more luxury hotel accommodations in the area, the city takes a hit. (See Bonneventure) If retail revenues and occupancy rates do not generate to the levels promised, the city takes a hit (because what we gave was based on what we expected to take in).
What if the project never even gets completed? With only phase one agreed to, and even that has not been executed, who’s to say people can’t drop out, default, or what if City money doesn’t come through?
ALSO, look how Related was selected as the developer by the Grand Authority (summary, page 3) Wonder what interests those selected to sit on the board (who selected the NY based company) had.
I also see in the summary that the project was approved for Related to be the developer, then substituted Related, with a spin-off company (GALA, Grand Ave LA) as developer, which is Related; plus CIUP (the CALPER pension people). [OH NO...CALPER IS THE PENSION FUND PEOPLE WHO INVEST IN MACFARLANE. PENSION FUND ALERT, Y'ALL!!! PENSION FUND ALERT!!! It says, “This was essentially the formal approval of the initial team selected. (Really, well what “un-essentials” were left out. (The City and ZD seem to differ on what is essential, and what isn’t.)
The "speculated" project cost already went up from $1.8 billion to $2.5, they haven't even started yet, and construction ain’t getting any cheaper.
The City is supposed to run municipal services for the City and help keep it ticking. Not use City funds (general and possibly pension) to invest in a forced, private project with no real benefit to the community, decided by a select few.
They say affordable housing is part of it, but the money they are using was allocated for this anyway. So we aren’t getting any extra affordable housing – we’re just letting them develop it.
It says, “permit change in net revenue sharing formula IF PORTIONS OF THE PROJECT ARE NOT DEVELOPED.
Developer can transfer it’s interests hotel, condos, office, retail to another operator once completed and enter into a direct ground lease with the new operator. The highest price speculate and “flip” in human history.
Funding plans include “potential” parking revenues -- and CRA Bunker Hill tax increment funds TO THE EXTENT AVAILABLE. (And if no parking revenue, since it is only “potential” and if the tax funds are not EXTENSIVE enough, then what…Is Eli Broad gonna panhandle for the money like everyone else in the area?)
ALERT ALERT: If developer does not receive CRA tax increment money for the agreed upon affordable housing (like, if they don’t have it) – they may reduce the amount of affordable housing units. Watch them not have it, and then we don't get the affordable part -- only the un-affordable part…(Price is Right ‘loser’ deflated sound effect…Whomp, whomp, whomp, whomp…whoooooooomp.)
During the term of the ground lease, they cannot convert the affordable housing to condos. But after the lease expires, kick out all the affordable residents and convert em to billion dollar condos. (Man does someone hope they have to break the lease, cause them it won’t be the term no more, y’all and they can get started with the luxury condo conversions.)
The affordable housing covenant only remains in effect for a minimum of 45 years for owners and 55 years for renters, so that means you can forget the covenant as soon as the minimum is up.
I bet people in the rest of the city won’t be too happy about the early notification and first opportunity to apply if you are a “local” worker. Plus 30% of workers are required to be local. If I lived in the valley and wanted work on the project, I would move into the area for preferential hiring. Therefore, taking residents and workers out of the other areas, and hurting their economy.
Anyway, sounds like a rock-solid plan and puts the most valuable land in the City to the best possible use, for actual community benefit, it looks like to me. If Downtown is having the types of problems that causes skid row to continue to thrive...I think this is the perfect solution!
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