Group is backed for Little Tokyo land sale

As a multicultural wave of new investors and residents begins to reshape Little Tokyo, many community leaders are hailing a Los Angeles city recommendation to sell the last large undeveloped land parcel in the area to a development team led by Japanese Americans.

The competition for the land at 1st and Alameda streets is seen as a critical test of the Japanese American community’s ability to strongly influence the future development of its cultural core, the neighborhood its immigrant pioneers first settled a century ago.

In recent months, several signature properties have been sold to non-Japanese owners, including the former New Otani Hotel, Japanese Village Plaza and Little Tokyo Shopping Center. Growing numbers of non-Japanese residents in the new condo and apartment buildings nearby, along with a spate of frozen yogurt, pasta, sandwich and other non-Japanese shops, are also diversifying the historic Japanese American ethnic enclave.

The changes have brought the area new vitality but have also sparked anxiety among some Little Tokyo leaders and raised the stakes for control of the 4.5-acre parcel, know as the Mangrove site.

The selection panel of city and community members is expected to issue its report as early as this week outlining why it chose the Nikkei Center team, led by the Little Tokyo Service Center, Kaji & Associates, Urban Partners and others, to buy the Mangrove site. The City Council must approve the recommendation.

“Not to take anything away from the other contenders, but the Little Tokyo Service Center and other partners have been longtime members in the community whom we’ve worked with and whom we assume will have great accountability,” said Chris Aihara, chair of the Little Tokyo Community Council.

The council, made up of about 100 area businesses, nonprofit agencies, religious institutions and residents, endorsed the proposal by the Nikkei Center last year.

The team has proposed a mixed-use project of housing, office space and retail that would showcase Japan’s fashionable modern face of anime, fashion, design and high-tech electronics. A media court with giant outdoor screens, similar to those in Shinjuku and other hip Tokyo neighborhoods, is also envisioned.

Embracing a global definition of “Nikkei” -- a word that connotes both Japanese heritage and the Japanese economy -- developers hope to recruit the sizable ethnic Japanese communities in Mexico, Brazil and elsewhere in Latin America to open shops or businesses in the center, according to Jon Kaji of Kaji & Associates, a South Bay consulting firm and Nikkei Center partner.

All told, the team is proposing 390 rental units, including affordable housing, a six-story office tower, 80,000 square feet of retail space and 1,300 parking spaces. A new Gold Line light rail station under construction directly in front of the project at 1st and Alameda streets will add foot traffic to boost business, Kaji said.

Other contenders for the Mangrove property were a group led by Concerto Development and the Portland, Ore.-based firm Williams & Dame, and a team headed by developer Niemann Properties.

Lapchih Fan, a Concerto Development principal, said his group was disappointed by the selection panel’s decision but would not be able to evaluate it until the report is issued. Fan said his team had not appealed the decision. But the group sent a letter to the city’s chief legislative analyst, Gerry F. Miller, asking that Concerto and Niemann also be allowed to present their proposals to the City Council if the Nikkei Center team changed its design, purchase price or other elements to adjust to the declining real-estate market.

But Kaji said his team had no intention of scaling back its proposal, adding that it was crafted with the changing market in mind. Project members said they offered more than $40 million for the site.

If the City Council approves the Nikkei Center selection this summer, it would be the first success in a decade of failures by Japanese Americans to acquire major Little Tokyo properties.

Bill Watanabe, executive director of the Little Tokyo Service Center, said his social service agency unsuccessfully approached the Japanese corporate owners of sites on 2nd Street and Central Avenue and on 2nd and San Pedro streets before the sites were sold to non-Japanese owners. One owner put an Office Depot on his site; a residential and retail project by the Related Cos. is being developed on the other.

Kaji unsuccessfully bid for the Little Tokyo Shopping Center on 3rd and Alameda, which was sold to non-Japanese owners in May. The new owners have said through their real estate broker that they might convert it into a mainstream mall or a Korean themed center with a Korean market, herbal spa and electronics store.

And the sales last year of the outdoor Japanese Village Plaza and the New Otani Hotel -- since renamed the Kyoto Grand Hotel and Gardens -- occurred with little, if any, community input. The new owners have retained the properties’ Japanese themes so far.

With the Mangrove recommendation in hand, Little Tokyo community members say their string of setbacks might finally be over.

“This is a huge endorsement,” Kaji said of the selection panel’s decision. “For the first time, a local Japanese American-led development group has seized the initiative to determine the future of our community.”

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