A 46-year-old building’s big renovation news ladowntownnews.com gas z factor

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Palo Alto-based Essex Property Trust purchased the Bunker Hill Towers, composed of two 19-story buildings, in 1998. Now it is spending $76 million on the biggest renovation in the property’s history. The upgrade of the 1969 complex is expected to finish in late 2017, when nearly all of the 456 apartments will have been reworked.

The budget breaks down to about $170,000 per apartment, with about a month and a half spent on each unit, said Adam Berry, Essex’s senior vice president of asset management. While the price tag is high, the renovation will allow the building to compete with some of the upscale rental complexes in Downtown.

“We’ll be in a nice position after the renovation, when you have ultra-luxury high-rises coming online and we’ll be able to offer similar views, amenities and finishes at what is a discount to those new structures,” Berry said. “We don’t want to compete with the new ultra-lux product, but we’ll have a nice niche on Bunker Hill.”

Refurbished Bunker Hill Towers units run from about $1,900 a month (for a 588-square-foot studio) to nearly $2,900 (an 1,116-square-foot two-bedroom residence), averaging about $3 a square foot. Essex is raising prices on rent-controlled units by about 3% and up to 10% on its 58 non-rent-controlled units (the exact percentages are calculated by the Los Angeles Housing and Community Investment Department).

The renovation actually began in late 2013. The lengthy timeline is partly because Essex is waiting for units to vacate before beginning improvements, Berry said. Most of the apartments — 398 residences — are rent-controlled, and the company is offering to temporarily relocate tenants to other apartments while the work takes place.

The project will include infrastructure upgrades, among them a new HVAC (heating/ventilating/air conditioning) system and new plumbing lines so that each apartment can have its own washer and dryer. All the windows will be replaced with more energy-efficient panes. On the exterior of the towers, Essex has proposed installing full-size balconies on corner units (city approval is still required); center units would get smaller “Juliet” balconies with sliding glass doors.

“One advantage of our location on Bunker Hill is that we have largely unobstructed views of Downtown,” Berry noted. “We’re far enough away where we can get panoramic views, and nothing is going to be built up around us because we’re buffered by Figueroa and Third streets.”

A highlight of the project is the creation of an amenity center along Third Street, between Flower and Figueroa streets, on what is currently a small surface parking lot. The 11,000-square-foot, two-story building will have street-level retail, a large gym on the second floor and a rooftop pool and sundeck. Construction is slated to begin next year and finish in 2017.

“Right now it’s a bunch of ugly trees standing along there, and they make everything behind them disappear from street view,” Berry said. “There’s not huge walking traffic on Third, and probably never will be, but the building and its retail will induce some activity.”

The addition serves as a response to a bizarre building battle. The Bunker Hill Towers complex originally included a 32-story building on the north side of the property, and the three structures shared the pool and the outdoor common areas. The tallest structure was converted to condominiums in the early 1980s, and renters and homeowners continued to share the pool. Then, in 2013, disagreements between Essex and the Bunker Hill Tower Owners Association regarding pool maintenance costs flared into a legal battle. It resulted in renters being barred from swimming.

While Berry believes the coming pool will help draw renters, so will a surging Downtown. He recalled how much has changed since he worked in the Central City at a law firm in 2000, when it felt like the streets were so empty that “you could shoot a gun and not hit someone for six blocks.”

Bunker Hill may never generate the same kind of buzz as some other neighborhoods in Downtown, Berry added, and its lack of undeveloped land puts a ceiling on its real estate growth. But that’s a plus for people who want a quieter atmosphere while not sacrificing proximity to everything Downtown has to offer, he said.

Bill Cooper, of Downtown realty firm The Loft Expert, thinks the renovation may not be enough to lure the younger tenants flocking to the Historic Core and the Arts District. At the same time, he said that addressing the building’s biggest shortcomings — the lack of a full amenity center and a shared laundry room — could make a major difference to prospective renters.

“It’s tough to compete with brand new product, but having a mix of products, older and newer, more expensive and less so, that’s not a bad thing,” Cooper said. “ There’s less affordable housing than ever before. Tearing old stuff down and building new is a vicious cycle. But it’s a question of how much the rents will increase in the future.”

Essex has a big stake in Downtown, and is striving to make its residences more marketable. The company owns six other local properties: the Gas Company Lofts, the Pacific Electric Lofts, 8th + Hope, Avant, Santee Court and Belmont Station. Berry said Essex is currently investing in renovations of units at the Pacific Electric Lofts and is adding a rooftop pool and amenity building at the Gas Company Lofts. The latter should be complete this year.