Betting on the futures:
It's still happening in Downtown Los Angeles, on Spring Street, heart of the city's financial district until the late '60s, when major banks and brokerage houses moved to new high-rises five blocks west.
Since 1976, when the 1903 Hellman Building at 4th and Spring streets was renovated by Banco Popular de Puerto Rico, brave property owners and tenants have spent millions, with the Community Redevelopment Agency's help, to breathe new life into the seedy stretch from 4th to 7th streets, which is on the National Register of Historic Places.
The latest pioneers in this pork-bellies-type gamble are Brian L. Potashnik and his Direct Capital Corp., which is buying--appropriately enough--the 618 S. Spring St. building that housed the Pacific Stock Exchange for 56 years, until it moved last February to the Beaudry Center II building just west of the Harbor Freeway.
"We'll close escrow within the next couple of weeks. We have all the plans and permits. We've executed a lease with the nightclub, and we have a lease commitment (for offices) from some attorneys," Potashnik said. Martin Eli Weil, a well-known local architect who was once chief restoration architect for the government of Canada, has been hired as restoration architect and design coordinator.
Clyde Wallichs, who for years ran his Wallichs Music & Entertainment Co. and the famous Wallichs Music City in Hollywood, is chairman of the board of the Clubs Network International Inc., operator of the nightclub; Mike Reeve, who has helped finance concerts since 1977 and owned several Family Fun Fair (pinball and other arcade games) stores for a couple of years, is president and chief executive officer. Jim Rissmiller, for many years Southern California's leading concert promoter, will be a consultant for booking talent.
New York-Style Club
Reeve described the club, which he expects to open in February, as "the first New York-style nightclub in L. A." It is being designed by Gilbert Konqui of JLH Enterprises to have live performances, video and disco. Konqui has designed more than 40 nightclubs in North America, including Zazoo's in Phoenix and Fizz in Houston. Syd Mead, an artistic director who put together sets for the movies "Star Wars," "2010" and others, is working on the club's atmospheric design. Mario's Construction, which recently renovated the Amtrak station in Fullerton, is general contractor, and Edward H. Lucero of Studio Five Architects will implement Konqui's concepts, Wallichs said.
The club will be, Reeve said, "very stylish, where movie and rock stars will go, and the affluent will want to be seen." Mostly, though, he hopes that the club will appeal to the downtown business crowd, and Wallichs is planning a 4 p.m. buffet to lure office workers on their way home from work. As for music, Wallichs said, it will be "groups that appeal to 25- to 40-year-old people."
"L. A. has the largest concert market in the world," Reeve said, "and that's why we decided to get into this business."
He and Wallichs plan to spend $1 million renovating the old trading floor, which has a four-story or 45-foot-high ceiling, and they are calling their facility "The L. A. Stock Exchange Club."
Potashnik put the cost of the building at $4.6 million. Its 11 stories and basement have a total of 60,000 square feet of leasable space with the club occupying 14,000 and the attorneys about 3,000 square feet.
"I'd lease space in the office tower at $1 a foot, and that includes generous tenant improvements," Potashnik said. Lease rates along Spring Street generally range from 60 cents to $1.10 per square foot per month, or $7.20 to $13.20 per square foot per year, in contrast with $25 to $30 per square foot per year for the first five years for office space in downtown's prime financial area to the west.
'Lion Ready to Jump'
Ed Rosenthal of New Downtown Realty, who is leasing the empty office space, 7,000-square-foot restaurant space and 11,000-square-foot ground floor of the former stock-exchange building, likened the building to "a lion ready to jump."
"The stock exchange took up the whole building, so it (the structure) is inactive now," he said, "but it will become a well-known building again."
Until members of the Stock Exchange clamored to move out of the area because of the street's deterioration and crime, the granite-and-bronze building with walls of polished Sienna travertine and ceilings decorated in gold leaf was known as one of L.A.'s finest office buildings. Ironically, ground-breaking for the lavish structure was held one week before the stock-market crash of 1929.
The building was designed by Samuel E. Lunden with John and Donald Parkinson, who designed several other buildings on Spring Street, as consulting architects.
"Lunden, who is 89 years old now, is working with us as a consultant," Reeve said.