If all goes as planned, it will be transformed from a teeming ethnic enclave of restaurants and small businesses to an upscale destination with million dollar condos that will dramatically upgrade the community and redraw the L.A. skyline.

Over the next three years, the five-square-mile district will see at least 2,000 new luxury condominiums, mostly in towering high rises, and several shopping and entertainment complexes roughly clustered around Wilshire Boulevard between Western and Vermont avenues.

“Koreatown is going through a renaissance,” said Mark Hong of CB Richard Ellis, a commercial real estate broker of 18 years who has focused on the area.

Koreatown traces its origins back to the early 1970s when a Korean immigrant opened a small grocery on the corner of Olympic and Harvard boulevards and began importing food from South Korea. Today, the district is a sprawling neighborhood of Korean-owned restaurants and mom-and-pop shops along Olympic and its side streets and office buildings along Wilshire.

“We’re experiencing a fundamental shift in the expansion and the type of development taking place in Koreatown to something more upscale and cosmopolitan,” said Christopher Pak. He is the architect and managing partner for the $160 million Solair Wilshire condo development, which will stand 22 stories tall on the northeast corner of Wilshire and Western when it is completed late next year.

Across the street on Western, South Korea’s largest entertainment company will bring a multi-screen movie theater to showcase Korean and U.S. films with subtitles.

Both developments will be dwarfed by a 40-story residential skyscraper a few blocks down Wilshire on Hobart Boulevard, which is being built by South Korea’s top real estate developer, Shin Young Corp. That’s scheduled for completion at the end of next year, too.

On Wilshire and Vermont, demolition of office buildings began last week to make way for a $318 million two-tower residential project by Gerding Edlen Development. Across the street, there are plans for a new South Korean Consulate, a Korean American Museum and Korean Cultural Center, in a joint partnership between the city’s redevelopment agency and Koreatown developers.

Why now?

More than $1 billion is to be spent in the next three years redeveloping the largest Korean community in the world outside of Korea. The local boom is driven by foreign investment and an increasingly affluent immigrant population.

The 14 residential and commercial projects in the works are targeting mostly the Korean and Korean-American population. Several are being developed by national companies, such as Gerding Edlen, Forest City Enterprises Inc. and Urban Partners LLC. They are joined by Shin Young, which is building the $250 million residential skyscraper here and another in China.

These developers are benefiting from the swelling flow of real estate investment from South Korea that spiked when the Korean government lifted its overseas investment cap last May. Previously, individuals could invest up to $300,000 on foreign residential property. Now, they can spend up to $1 million on real estate overseas. As a result, Koreans reportedly could spend $4 billion worldwide on overseas condos and homes this year, up from $1.27 billion in 2005.