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Shopping Centers Today -> September 2003
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FIRM STRIVES TO RESTORE L.A.’S DOWNTOWN APPEAL
BY IAN RITTER
Los Angeles dwellers fled the city for the suburbs after World War II to escape congestion, but one developer is banking on their need to flee right back to the downtown.
Since May, Fifth Street Funding has been at work on an $18 million plan to renovate and convert the historical downtown Mercantile Arcade Building, a retail atrium flanked by two towers, turning vacant offices into apartments.
“The freeways have gotten too jammed,” said architect David Denton, who is designing the project, which is bordered by South Spring Street, South Broadway, and Fifth and Sixth streets. “People want to be able to walk to work.”
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The Spanish Renaissance Revival building, built in 1924, consists of two 12-story structures connected on the ground floor by the atrium. The offices began emptying out as far back as the 1960s and have been vacant for the past two decades. The retail space beneath the atrium, however, has survived, resembling a bazaar tenanted by local sellers of toys, luggage and other items. That space accounts for about 30,000 square feet of the 220,000-square-foot building.
“Over time, they will probably be overturned to national tenants,” said Denton, who gave no specific names.
The attraction for prospective retail tenants will be the 142 one- and two-bedroom luxury rental apartments to be built on both sides of the retail area, he says, plus the affluent employees from the nearby financial district.
Fifth Street Funding is renaming the structure The Arcade Building. The work is scheduled for completion in July 2004.
This isn’t the company’s only project in the area. It owns three historical theaters in the neighborhood, for which it is considering a number of possibilities, including the addition of retail.
Fifth Street Funding could draw “important retail” and help the area “reclaim its glory,” says Carol E. Schatz, president and CEO of Los Angeles’ Downtown Center Business Improvement District. “It recognizes the historic quality of the theaters and buildings connected to them.”
But first there must be residential tenants, says Jodi Meade, SCSM, a retail investment specialist in the downtown Los Angeles office of CB Richard Ellis. “Retail goes where the people are.”
Meanwhile, there are other developers also trying to lure people back to the downtown, Meade notes. Los AngelesÐbased CIM Group broke ground in May on a $250 million mixed-use project a mile west of the Arcade Building that will have 1,200 residential units and over 100,000 square feet of retail, including a Ralphs supermarket.
Are we about to see a flight from the suburbs back into the downtown?
“Anything you do here is a challenge, but I don’t think anything’s out of the realm of possibility,” Meade said. “It’s going to be a slow metamorphosis, but developers are trying to push this.”
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