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California: News and Insight on Business in the Golden
State | Heard On The Beat / Real Estate

Courting Change

Sports Arena Raises Hopes for Revitalizing Downtown's South Side

April 30, 1998|JESUS SANCHEZ | TIMES STAFF WRITER

The south side of downtown Los Angeles is filled with public and private projects that promised to spark urban renewal but never delivered.

The approximately 70-block area--known as South Park--remains a predominantly sleepy and often seedy neighborhood despite the presence of such local landmarks as the 32-story Transamerica Center Tower and the Los Angeles Convention Center. Instead of thriving stores and attractive apartments, parking lots occupy 25% of South Park.

But hopes are rising once again with the construction of Staples Center, the $240-million sports and entertainment complex that will draw thousands of fans to watch Lakers and Clippers basketball games and Kings hockey contests.

So far, there has been no burst of land sales or sign of zooming property values near the arena site at the intersection of Figueroa and 11th streets. However, many local property owners say they expect Staples Center to raise South Park's profile and trigger more real estate development. The sports arena's developer--Majestic Realty--also plans to build an adjoining retail and entertainment center and possibly a hotel.

One potential beneficiary is Shammas Group, which owns a renovated office building--the 1925-era Petroleum Building--a block away from the arena site. That structure could benefit from businesses seeking to cash in on the throngs of fans, said Darryl Holter, chief administrative officer for Shammas Group.

"I'd like to see a sports bar developed on the first floor in what used to be a bank," said Holter. "The fact that the sports arena is being built allows owners to think differently about the property they own."

But few if any investors have yet to act upon the prospect of sports fans and convention-goers spilling through streets lined with stores and apartments.

Real estate broker Ron Bagel of Donaty Group knows of small commercial properties a short walk away from the arena site that show no sign of being sold after more than 18 months on the market.

"There has been some raised expectations in the neighborhood," Bagel said. "But there is a wait-and-see attitude on the part of sellers as well as the buyers."

The cautious attitude is understandable in a neighborhood that has humbled the most ambitious of public and private redevelopment efforts.

* In the mid-1960s, Occidental Insurance built what is now the Transamerica Center in a bold bid to establish a new financial district. But Occidental lost the bet and the office complex stands as a lonely beacon surrounded mostly by parking lots.

* City officials in the 1980s tried to encourage construction of apartments and condominiums by restricting industrial use and funneling money into a new park and other improvements. But more than a decade later, only a handful of residential towers have been built.

* The expansion of the Los Angeles Convention Center in 1993 and plans for a huge convention center hotel led investors to pay more than $200 per square foot for property in the area, according to brokers. But the hotel was never built and the expanded center did little to generate additional development. As a result, that same pricey real estate was for sale for $45 per square foot in the mid-1990s.

Many South Park boosters say development activity will probably not take off until Staples Center opens sometime in late 1999. In addition, many are waiting to see the final plans for the adjoining retail and hotel complex that could funnel pedestrians and visitors into nearby streets--or keep them corralled in a mall-like complex.

A neighborhood-friendly retail and hotel complex and a parade of fans and visitors could be the boost South Park supporters have long been waiting for, said Mike Pfeiffer of the South Park Stakeholders Group.

"Once that starts happening, you will see more restaurants and stores and then it will really start to steamroll," Pfeiffer said.

*

Jesus Sanchez can be reached via e-mail at jesus.sanchez@latimes.com

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