More Pieces Falling Into Place for Downtown Revitalization

For years, civic leaders have talked about the comeback of downtown Los Angeles, pointing proudly to such new landmarks as Staples Center, Disney Hall and the Cathedral of Our Lady of the Angels. But to many, the real proof that the city’s core may finally be on the rebound is a Ralphs supermarket.

The grocery chain is making plans to open a store at 9th and Flower streets -- part of a massive, 7.2-acre residential and retail project under construction near Staples Center. The developer of the site, Hollywood-based CIM Group, said the supermarket should be opening its doors within two years.

“We’re connecting the pieces downtown and creating a community,” said Avi Shemesh, a founding partner of CIM, which was a major force behind the revitalization of both Old Pasadena and Santa Monica’s Third Street Promenade.

The project is seen as a pivotal link in the renovation of downtown L.A., helping bridge the gap between the financial district and Staples Center. It will cover parts of three blocks and include 1,171 apartments and condominiums slated to be built over the next several years at a cost of about $220 million.

The first portion of the four-phase, three-year project already is underway with the revamping of four abandoned Flower Street office buildings designed by some of Los Angeles’ best-known architects. The Gas Company Lofts, as they will be known, will house 251 apartments and street-level stores in a complex of buildings dating back to 1925 that once served as the headquarters of Southern California Gas Co. They are scheduled to be completed next fall.

But the most remarkable thing about the project, in many eyes, is the luring of a supermarket to the urban center.

“Critical to attracting families and others is the presence of normal consumer services,” said Donald Spivack, deputy administrator of the Los Angeles Community Redevelopment Agency. Having a Ralphs “will be a key element in achieving the goal of creating a 24-hour, mixed-use community downtown.”

Today, directors of the CRA are expected to approve the environmental impact report for the entire project, along with a development agreement for the supermarket. If the City Council follows with final approvals, construction of the Ralphs will begin in July, according to CIM.

The Albertsons grocery chain also vied for the location. But Shemesh said CIM chose Ralphs because the company “was there from the beginning and we knew they would execute.”

Ralphs spokesman Terry O’Neil acknowledged that a deal to open a downtown store is near. “We believe downtown is in dire need of a modern full-service supermarket,” he said.

The pending agreement to bring a supermarket to downtown culminates at least a dozen years of public and private efforts, Spivack said. At the same time, the CRA has been working to create housing and pedestrian activity in the district, known as South Park.

CIM’s residential blueprint revolves around the original gas company building -- a 13-story tower designed in the Romanesque Revival style by John Parkinson and Donald B. Parkinson, a father-son team of Los Angeles architects who created such landmarks as City Hall, Union Station and the Bullocks-Wilshire department store.

Workers converting the structure are preserving 75-year-old details that include a mother-of-pearl mosaic in the lobby and brass elevators. “The building has this wonderful quality,” said Santa Monica architect Wade Killefer, whose firm is handling the conversion to housing. “The key is to not screw it up.”

The task extends to reusing the best elements of the three interconnected additions that Southern California Gas made in 1941, 1952 and 1959. Among them was a Streamline Moderne style building dreamed up by Robert V. Derrah, who also designed the nautical-themed Coca Cola plant in Los Angeles and the Crossroads of the World retail complex in Hollywood.

Another well-known Los Angeles architect, Albert C. Martin & Associates, designed the last addition in the Corporate International style. Martin also worked on City Hall and other landmarks, including the May Co. store on Wilshire Boulevard.

Twenty percent of the apartments in the CIM development will be offered at reduced rent to low-income tenants. Half of those will be for households with an adjusted income that does not exceed 80% of the county’s annual median, now estimated at $55,100 for a family of four. The other half will be for households whose income does not exceed 50% of the county median.

Financing for the project is set to come from a $180-million urban real estate initiative, which was set up for CIM by pension funds CalPERS and CalSTRS.

Downtown’s residential housing market has accelerated sharply in the last few years with conversions of historic office buildings, as well as new construction. But residents have complained of a shortage of amenities that most city dwellers take for granted. Perhaps the biggest gripe has been the absence of a grocery store.

Supermarkets operate on narrow margins in a highly competitive industry and aren’t able to pay much rent, said Dean Schwanke, an analyst at the Urban Land Institute in Washington. It’s often difficult for developers to build large grocery stores in urban settings that require costly parking structures.

Putting housing above a store makes sense for another reason, too: No apartment dweller, Schwanke said, “wants to rent on the ground level.”

But retailers do. Merchants slated to be part of the CIM project include Blockbuster, the International House of Pancakes and other stores intended to appeal to people who live and work in the neighborhood.

Said Shaul Kuba, another CIM partner: “It’s a community shopping center in an urban center without the sea of parking in front of it.”

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CIM development project

50,000 square feet of supermarket space

77,500 square feet of street level retail space

1,171 total loft/condo units

Estimated cost: $219 million

Time frame: 2003-2005

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Anschutz project

7,000-seat theater

1,200-room hotel

Estimated cost: Nearly a billion dollars

Time frame: Uncertain