Revival Brings Retail to L.A.

Speakers at Tuesday's event at the Los Angeles Convention Center included developers, economists, academics and L.A. Mayor Antonio Villaraigosa, who pledged the city's cooperation in the development process. A recurring theme throughout the sessions was the relationship between housing and retail, with the speakers agreeing nearly universally that mixed-use developments are the wave of the future in both the nation's urban renaissance and in L.A.'s quest to reshape its Downtown.

"For someone who was born in Los Angeles, to see what is happening in Downtown is unbelievable," observed Steve Hopkins, president of Irvine-based Hopkins Real Estate Group, who moderated a panel on the topic of working successfully with the public sector in developing urban projects. The panelists represented development firms that are undertaking some of the most ambitious projects in downtown L.A. and Southern California, including Forest City Commercial Development, the Hollywood-based CIM Group and Anschutz Entertainment Group, owner of the Staples Center.

Carol Schatz, president of the Central City Association, pointed out that Downtown L.A. has already attracted dozens of restaurants, bars, specialty services and shops. Some of the bars and restaurants "are wildly successful" in areas that were dismal and deserted only a few years ago, Schatz pointed out. She explained that the restaurants and other businesses are doing well because they serve a growing population that is filling new apartment buildings, new condominium towers and a host of former office buildings that have been converted to residential use.

"These residents are demanding retail, and they are getting it," Schatz said. One of the most anticipated retail projects is a Ralphs supermarket that is now under way near 9th and Flower streets, Schatz noted. Principal Jeff Kreshek of the CIM Group, which is developing the Ralphs as part of a mixed-use project that includes condominiums over the grocery store, pointed out that the supermarket will be the first full-service grocery store to open in downtown Los Angeles in 103 years.

Tuesday's panelists agreed that the phenomenon bringing retail to L.A. is "retail following rooftops," except that in this case the rooftops are likely to be high-rise condos rather than the suburban homes usually associated with that expression. "We knew that if we could bring a critical mass of residents Downtown, they would drive the retail, and that's what happened," said Tom Gilmore, a partner in L.A.-based Gilmore Associates, who moderated one of Tuesday's panels.

Demand for downtown housing is such, Schatz said, that condominium projects are selling out within weeks, if not days, from the time they come on the market.

Whether that housing demand can be sustained is a matter of concern, according to panelist Raphael Bostic, director of the master of real estate development program at USC. With downtown condos typically selling for prices of $400,000 and up, and with prices rising, Bostic said he worries about whether the market is sustainable and whether housing will be available for residents of more modest means.

Housing for people of all income levels was one of the many topics that Villaraigosa touched on in his remarks to the ICSC audience. He said the city is committed to facilitating the development of housing, pointing out that it has funded a $100 million housing fund and is determined to establish an even larger fund.

The L.A. Mayor commended the developers for bringing new housing and retail services to Downtown, telling them that the city need such development because of the economic benefits it brings. "We're absolutely focused on mixed-use development," Villaraigosa said.