Howard Hughes Properties withdrew Wednesday as the main developer of the late billionaire's vast Santa Monica Bay land holdings near Playa del Rey after years of bitter political controversy over the future of one of America's most valuable stretches of undeveloped urban land.
Instead, the firm is forming a joint venture with two high-powered urban development firms that have close connections in Los Angeles City Hall--Maguire Thomas Partners and JMB Realty Corp.
Maguire Thomas, which is building two high-rises in downtown Los Angeles across from the Central Library, will be the managing partner, in charge of planning, design and construction. JMB, a Chicago-based firm, owns Century City.
Robert F. Maguire III and James A. Thomas, partners in the firm, would not disclose financial details.
But the 900-plus acres are worth hundreds of millions. An inland parcel, totaling 70 acres, was assessed by Coldwell Banker at $84 million in an undeveloped state and at $107 million if roads were put in.
Maguire and Thomas said in an interview that they had been approached by a representative of Hughes Properties several months ago to buy a portion of the holdings.
But the firm declined, saying that it needed control of all the land to put up the kind of development it had in mind.
The deal marks an important development in the long fight over the land Hughes purchased decades ago, when it was cheap. With the exception of his old aircraft factory and airfield, most of the land, extending from the San Diego Freeway to Marina del Rey between Venice and Playa del Rey, has remained a panorama of open fields and a wetland bird sanctuary.
Bitter controversy developed over plans by Summa Corp., parent company of Howard Hughes Properties, to build 2,400 hotel rooms, 8,837 residential units, 5.9 million square feet of office space and a 40-acre marina. Homeowners, part of the growing slow-growth movement, objected to the density, and conservationists fought to save the bird sanctuary.
Pleased by Development
A Los Angeles city councilwoman, Pat Russell, was defeated in part because of her support of the project, and her successor, Councilwoman Ruth Galanter, vowed to force Summa to reduce it.
Galanter said she was pleased by the entrance of Maguire Thomas.
"I'm very optimistic," she said. "They share some of my concerns about the future of the area."
Maguire said he did not yet have specific plans for the development.
But he said he had "a vision." What kind of a vision? "The kind of design characteristic of Santa Barbara City Hall," he said, "some of the characteristics of that city."
In referring to Santa Barbara, with its low-lying, Spanish-design public buildings, surrounded by parks, Maguire seemed to be evoking an image of low-rise Mediterranean architecture--or at least a form of architecture more palatable to residents than the Hughes designs.
The Hughes architecture in the Howard Hughes Center, an office development off the San Diego Freeway, aroused the opposition of residents in the adjacent neighborhood. Supporters of former Councilwoman Russell said the design of the center, with its high-rise Wang Building, was a factor in her loss.
Galanter's reaction to the deal was evidence that the emergence of the Maguire Thomas firm as project boss may help ease opposition in City Hall.
Summa played power politics. It was a major contributor to the political campaigns of all Los Angeles County supervisors, the vast majority of the City Council and to Mayor Tom Bradley.
But the contributions did not help in the new slow-growth era of politics, and when Galanter replaced Russell the firm was weakened at City Hall.
Maguire Thomas, on the other hand, has won approval for major projects in Los Angeles, Pasadena, Dallas and Philadelphia.
In Los Angeles, it was given permission by the city to build the 73-story First Interstate World Center and the 52-story Southern California Gas Center in exchange for an agreement to help finance the restoration of the downtown Central Library.
"It is helpful to deal with a local firm," Galanter said.