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Developers Say Downtown Market Still Strong, Despite Recent Troubles

By Eric Richardson
Published: Tuesday, June 17, 2008, at 05:06PM
Downtown Housing Forum Eric Richardson [Flickr]

The Housing Forum panel: Tom Cody (South Group), Tyson Sayles (Kor), Paul Solomon (Linear City), moderator Tom Gilmore (Gilmore & Associates), Ted Tanner (AEG), Mark Tarczynski (CB Richard Ellis) and Bill Witte (Related).

At today's 10th Annual CCA Downtown Housing Forum, developers made the case that Downtown is still a great place to be developing residential properties. Developer Tom Gilmore moderated a panel that featured five other developers and one broker.

Common to each presentation was a pride in how far Downtown has come over the past ten years, and a confidence that it would see continued growth in the years to come.

Gilmore kicked things off with a slideshow featuring a list of Downtown landmarks not here a decade ago. Pausing on his first shot, showing the Ralphs at 9th and Flower, Gilmore asked how he could possibly not start with the "most important place on earth -- Pete's Cafe." He then went on to mention Disney Hall, Staples and SCI-Arc, all of which have opened since the first CCA forum.

The camaraderie between the developers illustrated one of the other common presentation themes. Tom Cody of South Group told the crowd that in Downtown, "everybody's pulling the same oar." He said that the developers gathered on stage were similar in that they "are all focused on place-making and community building."

All expressed confidence in the Downtown market. Mark Tarczynski of CB Richard Ellis noted that each increase in gas prices made the incentive to live closer to work even greater. With Downtown's working population around 500,000, that creates a huge market of increasingly motivated potential buyers and renters.

Ted Tanner of AEG gave an update on construction at LA Live, noting that almost 2/3 of the units in the Residences at the Ritz Carlton are now sold. The average price on those units is roughly $1200 per square foot. The company expects to have move-ins in the first quarter of 2010.

Several developers noted that the buying climate has changed. Buyers are no longer willing to purchase units that haven't yet been built, and are preferring to wait and be convinced by finished units.

No project has faced more skepticism than the The Grand, the Related Companies' multi-phase development across from Disney Hall. Bill Witte of Related told how several years ago people would ask him if AEG was going to get its LA Live project completed. He told them then that AEG wouldn't stop. Witte was similarly firm on The Grand. "We haven't stopped, and we will get this deal done."

Paul Solomon of Linear City skewed away from real estate talk to make a plea for the preservation of the Sixth Street Viaduct. The historic span has a chemical condition known as Alkali-Silica Reaction, and options under consideration include demolition and replacement. Solomon advocated that the bridge be saved and turned into a pedestrian and cycling span, similar to New York's High Line. The diversion prompted moderator Gilmore to quip that bridge talk showed how little worry Solomon had about the residential market.

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