Blows to businesses during the pandemic have deadened the streets of downtown Los Angeles and threaten long-term changes to office life, but builders are pressing ahead with major projects in the belief that the city still has a lot of room to grow as times get better.
An Arts District cold-storage plant dating to the `1890s would be replaced with housing, offices, a hotel and shops in a proposal unveiled Thursday by Denver developers. With a price tag between $1.5 billion and $2 billion, the complex would rank among the largest L.A. commercial real estate developments in recent memory.
Continuum Partners launched the city approval process for a 10-building project that includes a residential skyscraper at Central Avenue and 4th Street, a historically industrial neighborhood dotted with art galleries, apartments and buzzy restaurants that has become increasingly attractive to tech and entertainment companies including Apple TV, Sony and Warner Music.
Now is as good a time as any to plow ahead with ambitious development, said founder Mark Falcone of Continuum, which has done large-scale urban projects in Denver and Portland, Ore.
“You have to look past the market cycles that stall and sometimes slow down investment,” he said. “You have to be willing to look at the evolution of an area over decades.”
A rendering of the proposed Fourth & Central complex from Central Avenue.
(Studio One Eleven / Adjaye Associates)
In Falcone’s view, the Arts District that lies east of the original heart of Los Angeles has the potential to be one of the most vibrant urban neighborhoods in the country, with a mix of old and new buildings supported by rail and nourished by potential rejuvenation along the banks of the Los Angeles River. The proposed project would be Continuum’s fourth in the district.
Its status as the city’s original industrial zone works in developers’ favor, he said, because it has large parcels of property controlled by single owners who may swiftly decide to change the uses of their land.
Continuum has formed a partnership with Los Angeles Cold Storage Co., which opened in 1895 as an ice production and distribution plant. It shifted in the early 20th century to provide refrigerated warehousing to many of the produce markets, hotels and buildings in the region. Cold storage is still a thriving business in Southern California, boosted in part by the rise in online grocery shopping.
The Denver developer seeks to make over Los Angeles Cold Storage’s 7.6 acres for a project called Fourth & Central. It would be financed by private investment, Falcone said. Terms of Continuum’s partnership with L.A. Cold Storage were not disclosed.
“L.A. Cold Storage will find a new home at a more fitting location, and our current site will be a new home and community to thousands of Angelenos — that gives me a tremendous amount of pride,” said President Larry Rauch, who has operated the site for more than 50 years. “This property has given me and my family so much, and a new location will afford us the opportunity to expand and best serve our customers.”
A rendering of a courtyard at the proposed Fourth & Central project.
(Studio One Eleven / Adjaye Associates)
If approved by the city, Fourth & Central would include 10 buildings and feature a 42-story residential tower. The proposal calls for the complex to have 572 condominiums and 949 apartments, with 216 units set aside for residents with low incomes paying reduced rent. Some residential units will be live-work lofts.
There will be a 68-room hotel and offices for rent that Falcone hopes will appeal to firms in creative fields, which have been putting down stakes in the Arts District.
Among them are music streaming service Spotify and online coupon firm Honey, which has leased a refurbished Coca-Cola plant for its headquarters. Entertainment content creators Apple TV and Sony recently agreed to rent production space in what is now a beverage distribution center.
Fourth & Central is intended to feel like a small, walkable community with new buildings that acknowledge the industrial history of the area without appearing too precious in their design, architect Alan Pullman said. His Los Angeles firm Studio One Eleven is overseeing the master plan and designing buildings, but also brought in another architect to make the look of the complex more diverse.
“We want to create a neighborhood that feels like an organic part of the city that grew up over time,” he said, and avoid the design monotony often found in mega-developments. Two marquee buildings including the high-rise were designed by Ghanaian-British architect David Adjaye, best known as the lead designer of the National Museum of African American History & Culture in Washington.
There will be a public courtyard and pedestrian pathways meant to break the impermeable barrier that the cold-storage complex now creates in the neighborhood. It will have retail outlets such as banks and dry cleaners meant to serve the locals along with restaurants, bars and fashion or arts-oriented stores intended to create a greater downtown destination.
The planned office component is large, at 400,000 square feet, and appears ambitious at a time when many companies are dialing back their space needs and as more than 17% of Los Angeles County offices are unrented.
Continuum is betting that its offices will be more desirable to tenants than older office buildings in other parts of the city, Falcone said, with demand propelled by its nearness to a major rail station under construction in Little Tokyo and another being contemplated along the Los Angeles River near 6th Street.
Offices in the Arts District already command a rental price premium of 40% over downtown’s financial district, where many of the big buildings were built in the mid- to late 20th century, said real estate broker Mike Condon Jr. of Cushman & Wakefield.
The Arts District is attracting fashion, tech and entertainment businesses, along with supporting firms such as law offices that work with them. The presence of big names such as Sony, Apple and Warner may create “a halo effect,” he said, that could entice others to join them in the neighborhood.
The district is on the path to becoming “a major employment center” that will continue to attract new development, Falcone said. He hopes to start construction on Fourth & Central within two years and complete it in phases over the following five to seven years.