Grand Avenue Retail: Why Should We Care Now?

By Eric Richardson
Published: Tuesday, April 25, 2006, at 11:23AM

Grand Avenue Presentation Eric Richardson

Yesterday at the Grand Avenue Project event one of the people I saw was Times reporter Cara Mia DiMassa. We said hi and then she excused herself to figure out what she was going to write for today's paper. What she and co-byliner Roger Vincent ended up with was this story on how the Grand Avenue Project hasn't yet signed up big retailers.

Or at least that's how the story's titled -- "Retailers Not Sold on Grand Avenue" -- and how it's been picked up in the blogs. I don't see it, though.

Bill Witte of Related Cos., Grand Avenue's developer, said Monday that he understands the Grand Avenue project faces challenges but believes it ultimately will succeed.

The developers said they hope to be able to announce some of the project's key retail tenants, including the boutique hotel and several restaurants, within three or four months.

Witte called preliminary interest in the project "remarkable" but also struck a cautious tone.

"This is not easy," he said. "When you are pioneering, it is never easy."

I have no problem looking at this as a non-issue for the Grand Avenue Project. Heck, their buildings won't open for several years. Retail is always slow, but when they're opening the doors in 2009 I think they'll have a nicely stocked tenant list.

That said, the slow speed of retail is a much more interesting issue for the rest of Downtown, where spaces are already available.

From the article:

Over the last year, downtown business groups have aggressively tried to persuade popular stores in places like Pasadena and Hollywood to open branches in the city center.

Despite tours and demographic presentations, many well-known chains, including In-N-Out Burger, Trader Joe's and Barnes & Noble, have so far said no to the area.

"The chains aren't interested yet," said Warren Cooley, project director of the Historic Downtown Retail Project, a city-funded endeavor to attract businesses downtown. "There's not enough population and critical mass. There are still challenges. The homeless issue on the street is a concern when real estate investigators from big chains look. That's sometimes something that concerns them."

I would tend to think that if you asked Cooley he would say that far more important to retailers than the homeless issue is that of critical mass, and just as importantly that of convincing retailers that there's more to be made by going outside their normal store model.

Take a premium fast-food chain like In-N-Out for a minute. Their market model involves staying open late and having a packed drive-through. If I'm in corporate and looking at Downtown, I'm looking at Figueroa to see the USC population to the south and the post-Staples driving crowd to the north. At this time I'm not looking to move into a walk-in only location in the Financial District or Historic Core. The numbers just aren't there.

The big chains aren't risk-takers or early-adopters. They can buy their way in when the time's right for them, but they're not looking to stick their noses out.

Far more important is to convince the local entrepeneur that Downtown is really going to happen. They're the ones that can understand and really make a move. And that's been largely the business that we've been seeing. I like that. Let these people get in on the ground floor. The chains can figure out their way in later.



Comments

1
Tim Quinn writes:

Part of the problem is that Los Angeles has skipped right over the gentrification process wherein risk takers with little to lose take up unrented store fronts to make little local businesses while the rents are rock bottom. Instead, developers want the big bucks and security of chain retail. So we have retail sitting empty (except for a few brave art galleries) and the momentum slowed or killed.

It is a good thing there are people like Julie Rico (Wienies, Red Spot) around to charm and bully their way in and start something fresh and independent despite the scaredy cats.

Grand will be great architecture, but probably a boring or expensive place to shop or eat. Thanks for the cool pictures.

Oh, I love that 'pioneer' line from Witte. Pioneers of previously lovely neighborhoods leveled for parking a generation ago. Los Angeles does have a history, it just happens to be invisible in many cases.

# on Apr.25.2006 AT 12:10 PM
2
David Kennedy writes:

Tim makes an excellent point. Retail space remains empty for too many projects because the rents required are too high. In the historic core, residential rents are high, so I presume the owner assumes retail should go for a premium, too. (I also see in the Financial District, there's plenty of empty retail space, too, for similiar reasons. I don't see why the owners of these buildings wouldn't offer cheap rents to entice local entrepreneurs. These businesses would generate more pedestrian traffic, which in turn would make their buildings more valuable. Once the viability of these locations have been proven, rents could respond to the market. Of course, this retail activity would make these properties more attractive to prospective tenants.

In Toronto, I heard about a conversion project in a historic district which initially offered very cheap rent with extended leases (i.e. five years) for this very reason. By the time the residential component opened, the district was well stocked with a variety of retail. Imagine if many of those funky businesses which now line Sunset in Silverlake were located in the historic core.

It has puzzled me for years when a building owner will sit and sit for years waiting for retail. I'd assume tenants paying cheap rent is better than empty storefronts. However, it looks like I'm mistaken.

# on Apr.25.2006 AT 12:46 PM
3
Eileen writes:

Tim Quinn writes: "Pioneers of previously lovely neighborhoods leveled for parking a generation ago."

"Lovely" is not a word I'd use to describe what used to occupy the land where the Grand Avenue development is to go up. "Seedy", "depressing" and "shanty-like", yes, "lovely", no.

# on Apr.25.2006 AT 06:37 PM
4
Tim Quinn writes:

uh, the buildings and neighborhood were fresh at one time, you know. I have seen pics of the late stages. The point was that the grand project is hardly pioneering on that soil, it has a long and colorful history that happens to be capped by fifty years as an ugly parking lot.

# on Apr.25.2006 AT 07:23 PM
5
Tim Quinn writes:

I will go on,

The corner where the new Gehry scraper is going used to be occupied by two very fine hotels, The Melrose and The Richelieu. They would have responded to restoration as well as destruction.

The residential bunker hill was victim of racist and political phobias rampant in mid century los angeles. red lined out of existence because it was a known melting-pot. The deterioration was aided and abetted by these racist policies out of fear that it could become a hotbed of communists and socialists. I didn't make this up . . .

I still look forward to the new project, Gehry is OK with me

# on Apr.25.2006 AT 07:37 PM
6
Don Garza writes:

Tim can you get more information to me on this that you brought up

thanlks

Don

# on Apr.25.2006 AT 10:43 PM
7
David Kennedy writes:

Thinking about this some more, of course, retailers are not sold on Grand Avenue because there is nothing yet to sell. It is still very early in the planning stage. I don't see how any retailer could make any decisions or commitments based upon the information which is available. Thus, the news story is not really news.

That said, I think it is extremely important that the developers be thinking through the issue of animating the space and retail is an important part of this. It can be assumed a certain amount of pedestrian traffic will be generated by existing activity along Grand: Music Center, Disney Hall, MOCA, Colbourne school, Cathedral (although these destinations tend to be drive-in/drive-out without spill along the street). The key urban design challenge is to create a space where people who live downtown will just go. For a quick meal. To take in a performance. Go for a stroll/walk the dog. Kill an hour. Have a drink. People watch. Whatever. Right now, that kind of activity is not happening on Grand Avenue. This project will be a failure as an urban destination, unless it seems perfectly normal, particularly for people who live downtown, to do any of the things listed above on the spur of the moment. So, yes, the question of retail is important. It is just highly premature at the moment. The L.A. Times "the sky is falling" angle is just typical bad news journalism.

One more important point, which I hope the developers are thinking hard about, is the location of this project. Remember, Bunker Hill is just that -- a hill. Furthermore, how convenient will it be for downtown residents to casually get there? I live at Broadway & Ninth. I won't be strolling over. Distance is one thing. But, that hill is another. Even if I lived at Broadway & Third (which I once did), while I wouldn't mind the walk nor the hike up the hill, I'm sure my parents would think twice. (They'd probably take a cab.) I hope the developers are looking at how the Grand Avenue project will connect to the downtown transit network: DASH, Red Line, Blue Line, Angels Flight (sure beats hiking up that hill). I recall there's a plan afoot to develop a trolley system downtown. I sure hope these guys are coodinating with that project. Or is their plan everyone is going to drive there and navigate some mega parking lot? If my family and I could walk a block or two and jump on some kind of decent transit option, for sure, we'll head on over. If not, remember, Grand Avenue won't the only game in town. We'll just stroll over to L.A. Live.

# on Apr.26.2006 AT 01:01 PM
8
David Kennedy writes:

Tim, I'm not sure about this comment.

"The residential bunker hill was victim of racist and political phobias rampant in mid century los angeles. red lined out of existence because it was a known melting-pot. The deterioration was aided and abetted by these racist policies out of fear that it could become a hotbed of communists and socialists. I didn't make this up . . ."

I thought the razing of the residential neighborhood on Bunker Hill was the result of the prevailing orthodoxies of urban planning and 'urban renewal' in the post-war period. These policies were the epitome of progressive thought at the time. Obviously, these ideas in urban planning are quite discredited now. Which is not to say L.A. wasn't a racist and xenophobic place then. I just think it is not accurate to chock up the razing of Bunker Hill to just racism.

# on Apr.27.2006 AT 12:11 PM
9
Eileen writes:

To claim Bunker Hill was torn down because of racism is ridiculous. Maybe such a policy was due to "phobia," or a "fear" of a jumble of mostly decrepit and primarily unimpressive properties, but that's about it.

Now if the city had instead ignored the ongoing decline of a community like Bunker Hill and said that people of some means and success should move to other, nicer parts of town, that would have been racist or whatever.

# on Apr.27.2006 AT 05:18 PM

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