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Nikkei Center Development Runs Out of Time

By Eric Richardson
Published: Tuesday, December 07, 2010, at 05:31PM
Mangrove Estate Eric Richardson [Flickr]

Negotiations over a 5.66-acre city-owned site on the edge of Little Tokyo have stalled, in part over the future of the rail line that runs on two of its sides.

Plans for a large mixed-use development on the edge of Little Tokyo are headed back to the drawing board, but that doesn't mean the developer is completely out of the picture.

City Council will vote Wednesday on a recommendation to end a negotiating agreement with Nikkei Center Partners, LLC, allowing it to resume the search for a developer able to make something happen on the 5.66-acre parcel at 1st and Alameda.

A partnership made up of the Little Tokyo Service Center (LTSC), Urban Partners and Kaji & Associates won the right to purchase the land in 2008 for $44 million, but negotiations caused the sale to drag out. LTSC and Urban Partners would later pull out of the partnership, leaving Kaji & Associates to continue talks alone.

The city's negotiators say now that a deal simply won't happen. "It is clear that the sale of the Property as proposed by the Developer will not occur," says a report signed by Chief Legislative Analyst Gerry Miller and City Administrative Officer Miguel Santana (PDF).

The report blames Metro's Regional Conector project for killing the deal, saying that the transit agency's declaration of the site as a "preferred alternative" for the Connector caused the developer to reject the city's offer and ask for a five-year extension of the negotiating deal.

While the delays that would be brought by the proposed construction of the rail line were a factor, Kaji principal Jon Kaji said Tuesday that the economy played a larger role.

"The current economy does not justify going forward" with the negotiated $44 million purchase, he told blogdowntown.

The Nikkei Center plans would have put 390 residential units, 80,000 square feet of retail, and 166,500 square feet of office space on the site.

"We're optimistic that whatever year the project moves forward, we still believe the mixed-use model makes sense," Kaji said.

He hopes that his company will still be involved in the development when that does happen. He hopes to create a public-private partnership with the city and Metro to see both the transit and development happen on the site.

Also on Wednesday, Council will vote to approve an Environmental Impact Report for the site, potentially speeding the process for whatever development does eventually take place. More specific plans would still need to go through the approval process.

According to Councilwoman Jan Perry's office, the city now intends to wait for Metro to solidify its plans before looking for a new development option.

Kaji is willing to wait. He pointed out that it has been 50 years since the city shrunk Little Tokyo by condemning the land used to built Parker Center. "If we have to wait another eight years to get control of the site, we'll do that."

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