Is downtown’s low-rise building spree hurting the community news ladowntownnews.com electricity manipulation

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Gone is a chance to create residential density in the part of the city where it isn’t largely opposed by community stakeholders, and where it makes the most urban planning sense — alongside mass transit and jobs. Instead, Downtown is getting the type of buildings that predominate in suburban areas.

“It seems odd that as the city grows, the quality of Downtown stone construction is being replaced by sticks and plaster,” said Eric Owen Moss, director of the Southern California Institute of Architecture. “A bigger scale and larger conception is being replaced by a smaller scale and no conception, other than an easy to replicate economic model.”

The concern is shared by City Planning Director Michael LoGrande. While he acknowledges that projects like the Jia Apartments and the 280-unit Ava Little Tokyo are adding much-needed supply to a market that currently has an occupancy rate near 95%, he worries that future Angelenos will look back at today’s growth surge and lament that the developers didn’t aim higher.

“In some of the areas where we have the most allowable density, which were intended from 30 years ago to be high-rise zones, we’re getting five-story buildings,” LoGrande said. “A lot of the growth that we need to accommodate the future could be on these sites, right next to transit. That opportunity could be lost.”

In Los Angeles, buildings that exceed 75 feet are required to implement type-one construction, which relies on sturdier steel and concrete engineering to withstand earthquakes. So, developers are mostly designing projects to stay under the plateau, resulting in six- and seven-floor structures.

The higher cost of type one construction means that steel-framed residential buildings don’t pencil out financially unless they’re allowed to go tall. According to several developers, type-one structures start to be cost effective in today’s market at about 20 stories.

Type-three low-rises cost about $200 per rentable square foot to build. Steel-frame high-rises, depending on the size and design, cost anywhere from $80 to $300 more per square foot, according to multiple developers with experience in both construction types.

Of course, high-rise apartments command higher rents, thanks to the better views and the perceived value in higher quality building materials. It’s no coincidence that the three most expensive rental buildings in Downtown — the Watermark Tower, 717 Olympic and Apex, all in South Park — are high-rises.

The Vancouver, Wash.-based developer has built three projects with 488 units in City West. They include the seven-floor, 210-apartment 1111 Wilshire, which opened this year. The project was originally entitled as a 398-unit high-rise, but was downscaled after the economy soured.

The company, which is planning another type-three complex in City West, is no stranger to high-rise construction. It has built more than 40 towers and has three underway in other cities right now. Tom Warren, the company’s chief operating officer in Southern California, said Holland would consider doing a Downtown high-rise, but only in the right location.

Today, the most desirable location, from a rent perspective, appears to be the portion of South Park near Olympic Boulevard and Flower Street, Warren said. In other areas, a premium-priced high-rise might not succeed because there are too many less expensive alternatives, he said.

But don’t tell that to Historic Core developers Izek Shomof and Barry Shy. The real estate veterans, who have separately focused on turning old office buildings into modern apartments, are preparing new high-rises. Shy has plans for three structures: at Sixth and Spring streets; at Olympic Boulevard and Broadway; and at Ninth and Hill streets.

Shomof, who is moving forward on a 22-story tower at Fourth Street and Broadway with about 400 units, is scratching his head at all the mid-rise construction. He believes type-one not only pencils out today, but that it promises better returns.

In most of Downtown, developers are technically entitled to build projects with a Floor Area Ratio — the city’s primary density metric — of 13 to 1. That means a building designed to cover the entire land parcel would be allowed to rise 13 floors. Buildings with a footprint that takes up only half the parcel could reach 26 floors.

As part of an effort to circumvent the new law, the Community Redevelopment Agency and City Council in 1989 passed an ordinance that essentially created a pathway for developers to get back to 13 to 1, but only if they agree to provide an array of public benefits.

Today, developers primarily get around the 6 to 1 limit through another means: They purchase TFAR — transferred floor area ratio — from the city, which transfers theoretically unused density from above the Los Angeles Convention Center. It is also known as buying “air rights,” and it’s not cheap.

The developer of Park Fifth, a mixed-use mega-project north of Pershing Square that died with the recession, purchased 692,888 square feet of TFAR for $3.5 million. Shy and Shomof will both have to buy TFAR (their cost is not yet known), as developer Sonny Astani had to do for his Concerto tower (now the Apex) in South Park.

Conversely, type-three projects are relatively easy to permit and they fit within the 6 to 1 density envelope. The added cost and the extra time it takes to navigate the city approvals process for a high-rise scares away some developers, said land use consultant Craig Lawson.

“To entitle a high-rise is more complex, there is more uncertainty, there are more hearings and developers don’t like that,” Lawson said. “When I tell them I have a process [to permit a type-three project] that’ll take four to six months, they’re happy. If I say 12 to 16 months, they’ll say, ‘I’m done. I can’t do this.’”

LoGrande, who considers the chief goal of code reform to be making it easier for developers to build the kinds of projects that the community desires, said the department could consider implementing minimum density requirements in areas particularly suited for high-rise construction.

“You do what the adaptive reuse ordinance did,” Gilmore said, referring to the 1999 legislation that simplified the permitting process to convert old office buildings into housing. “You can encourage a certain type of building by making it easier to build that way.”

The flood of type-three apartment complexes came in the wake of a recession, when developers are typically more risk-averse, Astani said. Still, he thinks that high-rises will eventually become the new Downtown trend. It just may have to wait, he said, until condominium values and rental rates catch up with construction costs.