South Park long has been known for dilapidated warehouses and vacant and burned-out buildings, but the opening of the Staples Center in 1999 brought huge changes to the neighborhood.
The state of the art arena, and the Lakers success in winning championships, drew visitors who had previously never stepped foot there, leading to the establishment of new restaurants and bars catering to the growing crowds.
Even so, the largest private landowner in the neighborhood is not Anschutz Entertainment Group, which owns the arena though it’s poised to become so once it completes its development agreement with the city for the second phase of the project.
The $1 billion, 4-million-square-foot development is proposed to include a 7,000-seat state-of-the-art live theatre, a hotel, restaurant, residential and office space in the area around Staples Center. The city and the Community Redevelopment Agency still hold title to that property, totaling 73 acres.
For now, according to a survey conducted for the Business Journal by CB Richard Ellis Inc., the largest private landowner is a partnership of two relative newcomers, the Canyon-Johnson Urban Fund and New Pacific Realty Corp., which were drawn to the area by foot traffic and other improvements associated with the arena project.
In one monumental deal in the spring of 2003, Canyon-Johnson and New Pacific acquired 1.4 million square feet of what was then the Transamerica Complex, including the 567,000-square-foot Transamerica Tower, two other smaller buildings and a six-acre parcel.
Since then, the partnership has nearly filled the 32-story Tower, which was 50-percent vacant when it was bought. Its occupancy rate is over 90 percent, while the entire 322,000-square-foot Hill Building is leased to the California State Bar Association. The partnership also has sold the Broadway Building to the city of Los Angeles, which is housing its General Services Department there.
Canyon-Johnson is funding others to build residential projects in the area, including The Elleven, a three-phased condo project at 11th Street and Grand Avenue, built by the South Group, a partnership between Portland developers Williams & Dame Development Inc. and Gerdling/Elden Development Co. LLC.
“We don’t operate on that ‘build it and they will come’ mentality. We build it if they’re there,” said Bobby Turner, managing partner of Canyon-Johnson Urban Fund. He calls himself “still very bullish on the area,”
It’s not hard to see why Turner feels that way, especially now that the Anschutz group and the city appear to have worked out a financing plan for the second phase of the arena development, called L.A. Live, which may include $175 million in public financing for a 1,200-room Convention Center hotel.
Once that project is complete, Anschutz will own more than 10 times the 6.25 acres that Canyon-Johnson and New Pacific partnership now have.
The third-largest landowner in the neighborhood is City Centre Development Co., which owns about 6 acres near the Harbor (110) Freeway. The company plans a mixed-use development that will include close to 900 apartments, almost 50,000 square of retail, a 480-room hotel and about 900,000 square feet of office space. City Centre hopes to start construction next year.
