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LOS ANGELES-Urban Pacific Builders of Long Beach has struck a deal with the Los Angeles Conservancy and will share tax benefits of the arrangement with buyers of Urban Pacific’s Pan American Lofts. In what the builder describes as “one of the first transactions of its kind,” Urban Pacific will grant an easement on the ornate five-story 1895 Beaux Arts facade to the Los Angeles Conservancy.

In return, Urban Pacific will receive tax benefits that it says it will share with buyers of the lofts, some of whom may be eligible for tax deductions of up to $80,000, according to Scott Choppin, CEO of Urban Pacific Group, parent company of Urban Pacific Builders. Choppin says that whether buyers qualify for the deduction is something for their individual tax advisers to determine.

The tax deal between Urban Pacific and the conservancy stems from the historic importance of the Pan American Lofts building. The developer and the conservancy worked together to preserve the building’s architecture as Urban Pacific was converting the former office building into lofts.

The Pan American Lofts, originally built as the Irvine Byrne Building and known more recently as the Giant Penny store, is at 249 S. Broadway, at the corner of Third Street. Besides its own heritage, which has earned it a place on the National Register of Historic Places, the building is close to some other Downtown landmarks, like the Million Dollar Theater, the Grand Central Market and the Bradbury Building.

According to Linda Dishman, executive director of the Los Angeles Conservancy, the tax arrangement that the group signed with Urban Pacific is part of the nonprofit conservancy’s effort to help developers take advantage of incentives to protect the city’s architectural heritage. Tax incentives are one way of doing that, although Dishman comments that, “It’s rare for developers to pass along the benefits to buyers.”

The Pan American and other buildings were in danger of being lost before developers began converting them to residential uses in what has become one of the biggest stories of the Downtown L.A. development scene. The 40 lofts range from 800 sf to 1,400 sf, including several penthouse units with their own internal mezzanines and private rooftop decks. Prices start in the $400,000 range.

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