CURATING A NEIGHBORHOOD
Downtown LA’s South Park will emerge as a new retail district
It’s rare enough for any developer — or group of developers and brokers — to plan an entirely new retail district almost literally from the ground up. It’s utterly unique to do so in one of the largest cities in the world.
Yet, that’s exactly what’s happening in Downtown Los Angeles’ South Park neighborhood. The 32-square-block district at the intersection of Interstate 10 and the 110 Freeway is providing developers a unique opportunity — a comparative abundance of former industrial land in the midst of an established and revitalized downtown area. The result is a plethora of residential, retail and entertainment projects that will create a sustainable neighborhood.
“South Park is the final frontier of downtown,” said Jessica Lall, executive director of the South Park Business Improvement District.
“The parking lots that made up a significant portion of the district ended up creating the ideal blank canvas for today’s development.” The BID was formed by local property owners in 2005 to help create a self-contained neighborhood by providing cleaning and safety services, as well as district identity, business support services and community enhancements.
“We’re not just working with developers and owners but also the brokers to make it holistic, not just project by project,” said Jessica Mandelbaum, director of retail and real estate of the South Park BID.
It’s the last phase of more than a decade of reinvestment from both the private and public sectors in Downtown Los Angeles. The downtown renaissance began with the 2000 opening of Staples Center, the 1999 adaptive reuse ordinance and pioneering development.
Now, with so much activity in the Entertainment District of South Park, developers are taking advantage of one of the best-situated neighborhoods in the city. Located south of the Financial District and adjacent to the Historic Core, Fashion and Flower Districts, the area is accessible by metro. A streetcar line also is proposed. South Park has the top three buildings by residential purchase price per square foot in downtown Los Angeles, with more than 5,000 residents, many of them in their 20s and 30s, who are upwardly mobile.
“People are not just living here. They’re moving here with their families with the intent to stay — part of the global trend of moving back to cities,” Lall said.
More than $3 billion have been invested in new development, including 3,000 new residences and 1,000 new hotel rooms under construction and in the planning stages. The district also is home to California Hospital Medical Center, with the University of Southern California nearby.
The next step is convenient shopping that will benefit not just this new residential neighborhood, but the area’s 10 million visitors annually.
“We really do need everything,” said Ed Sachse, executive managing director of Kennedy Wilson, Beverly Hills, California, which is leasing multiple properties in the district. “There’s so much growth in this area, and the community’s needs are broad and diverse.”
The BID — along with such brokerages as Kennedy Wilson and Avison Young as well as other developers and brokerages — is carefully leasing to retailers and restaurants at various price points, ranging from basic services such as drugstores and dry cleaners, to apparel and even luxury boutiques, given the lengthy transit time to Beverly Hills and Santa Monica. “These are people with cash to spend,” Lall said. “They need a place to shop.”
The retail is coming, typically on the ground floor of a residential or mixed-use development. More than two dozen projects are underway, with openings extending over the next three years and into 2020.
Beijing-based developer Oceanwide broke ground in March on its first project in North America, the $1 billion Oceanwide Plaza, a 49-story tower with residences, a five-star Roberto Cavalli boutique hotel and 166,000 sq. ft. of retail.
Jamison Services and Hankey Group are breaking ground on a neighboring two-tower, mixed-use condo project, with 50,000 sq. ft. of retail.
“What makes the sites even more compelling is the unique architecture and displays that the developers are bringing to the project,” said Derrick Moore, principal of Urban Retail Properties at Avison Young, Los Angeles. “This, in addition to the sports and entertainment assets, makes South Park a prime location for all types of retailers.”
San Francisco-based Trumark Urban has broken ground on Ten50, named for its location at 1050 South Grand Ave. near the Staples Center. The 22-story tower will house 151 condos and boast such amenities as barbecue grills, a yoga garden and one of the first drone landing pads in the United States, greatly appealing to the “up and coming demographic of South Park,” Lall said. The project also will include 5,000 sq. ft. of retail.
Shenzhen Hazens Real Estate Group, which recently purchased the Luxe City Center Hotel near both Staples Center and LA Live, will build a condo/hotel hybrid. These projects will join Hanover South Park and GID, which just opened the first of three projects in the heart of South Park with a combined total of 38,900 sq. ft. of commercial space.
Despite all the development, sustainability also is key; parklets and greenways are being developed into the overall plan. “The goal is to create a sustainable neighborhood, where people can walk to work,” Lall said. “We have the right developers building the right projects. Now we’re trying to get the right tenants.”
Chain Store Age and the South Park Business Improvement District are partnering on a DTLA retail tour, with a focus on South Park, this summer. If you are a retailer who would like more information about this event, here’s the link to ensure you receive your invitation: www.chainstoreage.com/los-angeles-event-registration-form.