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Editorial
Skepticism Trumps Optimism for Grand Avenue Plan
Perhaps no potential Downtown Los Angeles project is being watched closer than the Grand Avenue plan. Area stakeholders, politicians, business people and would-be future residents are all keeping a keen eye on the $3 billion development that would forever change the face of Bunker Hill.
That explains why a deep sense of discomfort is rippling throughout the community about the most recent postponement of the plan's groundbreaking, the third delay in the last seven months. Last week, Los Angeles Downtown News reported that developer Related Cos. now says the project will officially begin this summer - no date has been specified - and still meet its first phase opening of 2011.
Related appears to have been candid about the progress of the project, but the good intentions and outreach of the developer have come to seem empty. Now we need action.
The issue is at least public perception - and maybe a great deal more - when a groundbreaking for such a vast undertaking is postponed three times. Beyond perception, there are serious questions about the underlying causes of the delays.
Is it that Related is not strong enough to attract financing for the project? Or is it that such a vast development, with giant plazas instead of intimate streetscapes, is no longer what the market wants? Has the Grand Avenue plan become a bad or unworkable idea? Is it an untenable idea for big government to work with big development? Or is it that the market is fickle and unpredictable and a good idea just needs to bide its time as necessary elements (okay, let's just call it money) fall into place? Manna from the heavens, perhaps?
The nation's tumbling economy and the slowing housing market only add fuel to a fire that seems to have been burning somewhat undetected for a protracted period of time.
At this point, much of the public's fears have been realized. Worse, there is skepticism that shovels will ever dig into the earth.
The scope of the Grand Avenue plan is staggering: It would ultimately create 2,600 housing units, nearly 450,000 square feet of retail, a five-star hotel and other amenities. Also figuring in to the equation is the public's role. The city and county governments have been partners in the project for many years, working on issues such as land acquisition (sold at deeply discounted prices by both the County and the City) and plans for the $50 million civic park that would stretch from Bunker Hill to City Hall.
Thus, where some developers' troubles might affect only their own bank accounts, in this case any delays impact the taxpayers.
Adding to the mix are the massive budget and the known difficulties of transforming Frank Gehry's swirling designs into steel and concrete edifices.
Related President Bill Witte stated that the equity for phase one is in place and that what comes next is a construction loan. "The issues in today's markets are not construction loans per se, but rather the equity that underpins them. As far as we are concerned, we have the necessary financing in place," he told Downtown News.
Is that really the case? Or is it gobbledygook for "we ain't got the money"?
Perhaps the lenders are right that the equity isn't there, that there is simply not enough value to justify a loan. Perhaps elements of the project are ill-conceived.
The evidence would suggest that is so. There are cranes elsewhere Downtown, many of them. Other developers are obtaining construction loans. Yes, this effort is bigger than all of them except for L.A. Live, but L.A. Live has momentum created by the involvement of billionaire Phil Anschutz. There is no parallel momentum for the Grand Avenue plan.
Like many in Downtown Los Angeles, we want the Grand Avenue project to break ground and see it steamroll forward. Change is always difficult, and there is still hope that this plan, with its shimmering towers, would improve Bunker Hill and help transform it into a vibrant community. We take no joy in seeing it delayed and hearing the questions burst to the surface. But better to ask those questions, and demand satisfactory answers, than rest on uncertain financial hopes and community dreams.
Witte also said that the groundbreaking "is more of a symbolic event" than anything else, and that it has little to do with the project's timeline.
He is right, but maybe not in the way he intended. While groundbreakings on large projects are events orchestrated for TV cameras, in this case three postponements send the opposite symbolic message.
Right now, the Grand Avenue project needs something that will boost public confidence. Related's ostensible openness and Witte's willingness to speak must find a new voice, one that recognizes the bog in which the public thinks the project is stuck. If there is a truth beyond the damaged public perception, they need to find a way to communicate it. What they are doing now isn't working.
The public demands a further explanation of the situation at hand, even if it's not the answer we want to hear.
page 4, 1/28/2008
© Los Angeles Downtown News. Reprinting items retrieved from the archives are for personal use only. They may not be reproduced or retransmitted without permission of the Los Angeles Downtown News. If you would like to re-distribute anything from the Los Angeles Downtown News Archives, please call our permissions department at (213) 481-1448.
That explains why a deep sense of discomfort is rippling throughout the community about the most recent postponement of the plan's groundbreaking, the third delay in the last seven months. Last week, Los Angeles Downtown News reported that developer Related Cos. now says the project will officially begin this summer - no date has been specified - and still meet its first phase opening of 2011.
Related appears to have been candid about the progress of the project, but the good intentions and outreach of the developer have come to seem empty. Now we need action.
The issue is at least public perception - and maybe a great deal more - when a groundbreaking for such a vast undertaking is postponed three times. Beyond perception, there are serious questions about the underlying causes of the delays.
Is it that Related is not strong enough to attract financing for the project? Or is it that such a vast development, with giant plazas instead of intimate streetscapes, is no longer what the market wants? Has the Grand Avenue plan become a bad or unworkable idea? Is it an untenable idea for big government to work with big development? Or is it that the market is fickle and unpredictable and a good idea just needs to bide its time as necessary elements (okay, let's just call it money) fall into place? Manna from the heavens, perhaps?
The nation's tumbling economy and the slowing housing market only add fuel to a fire that seems to have been burning somewhat undetected for a protracted period of time.
At this point, much of the public's fears have been realized. Worse, there is skepticism that shovels will ever dig into the earth.
The scope of the Grand Avenue plan is staggering: It would ultimately create 2,600 housing units, nearly 450,000 square feet of retail, a five-star hotel and other amenities. Also figuring in to the equation is the public's role. The city and county governments have been partners in the project for many years, working on issues such as land acquisition (sold at deeply discounted prices by both the County and the City) and plans for the $50 million civic park that would stretch from Bunker Hill to City Hall.
Thus, where some developers' troubles might affect only their own bank accounts, in this case any delays impact the taxpayers.
Adding to the mix are the massive budget and the known difficulties of transforming Frank Gehry's swirling designs into steel and concrete edifices.
Related President Bill Witte stated that the equity for phase one is in place and that what comes next is a construction loan. "The issues in today's markets are not construction loans per se, but rather the equity that underpins them. As far as we are concerned, we have the necessary financing in place," he told Downtown News.
Is that really the case? Or is it gobbledygook for "we ain't got the money"?
Perhaps the lenders are right that the equity isn't there, that there is simply not enough value to justify a loan. Perhaps elements of the project are ill-conceived.
The evidence would suggest that is so. There are cranes elsewhere Downtown, many of them. Other developers are obtaining construction loans. Yes, this effort is bigger than all of them except for L.A. Live, but L.A. Live has momentum created by the involvement of billionaire Phil Anschutz. There is no parallel momentum for the Grand Avenue plan.
Like many in Downtown Los Angeles, we want the Grand Avenue project to break ground and see it steamroll forward. Change is always difficult, and there is still hope that this plan, with its shimmering towers, would improve Bunker Hill and help transform it into a vibrant community. We take no joy in seeing it delayed and hearing the questions burst to the surface. But better to ask those questions, and demand satisfactory answers, than rest on uncertain financial hopes and community dreams.
Witte also said that the groundbreaking "is more of a symbolic event" than anything else, and that it has little to do with the project's timeline.
He is right, but maybe not in the way he intended. While groundbreakings on large projects are events orchestrated for TV cameras, in this case three postponements send the opposite symbolic message.
Right now, the Grand Avenue project needs something that will boost public confidence. Related's ostensible openness and Witte's willingness to speak must find a new voice, one that recognizes the bog in which the public thinks the project is stuck. If there is a truth beyond the damaged public perception, they need to find a way to communicate it. What they are doing now isn't working.
The public demands a further explanation of the situation at hand, even if it's not the answer we want to hear.
page 4, 1/28/2008
© Los Angeles Downtown News. Reprinting items retrieved from the archives are for personal use only. They may not be reproduced or retransmitted without permission of the Los Angeles Downtown News. If you would like to re-distribute anything from the Los Angeles Downtown News Archives, please call our permissions department at (213) 481-1448.
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