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Developer Has Designs on Fashion District Buildings

Real estate: Mark Weinstein's Santee Court project would turn an aging property into modern spaces.

March 11, 2002|LEE ROMNEY | TIMES STAFF WRITER

To hear Mark J. Weinstein tell it, his plan to turn 10 Fashion District buildings into residential lofts, design showrooms and a cobblestone promenade of fountains and coffee shops will prove the tipping point in downtown Los Angeles' efforts to reinvent itself.

"It's a once-in-a-lifetime opportunity to create a destination and serve a multitude of different needs--affordable housing for the work force and penthouses for the more affluent--and they can all share the same amenities," Weinstein said. "It's a city within a city."

The enthusiasm is typical for the 43-year-old developer, who often sleeps just a few hours a night and is prone to leave rambling pre-dawn telephone messages espousing his vision--sometimes in rhyming verse--for anyone who will listen.

Still, Weinstein's proposed 790,000-square-foot Santee Court development, named for the street that ends at the project site on 8th Street, is not out of the woods yet. The developer has not secured construction financing for the $120-million project, although he said he is in talks with six potential lenders--including Wells Fargo Bank, East West Bank and San Diego National Bank.

Others who have sought to turn aging downtown properties into modern living spaces and shops can attest to the challenges of mixed-use projects in areas where problems include a shortage of parking spaces and a perceived crime threat.

On the upside, Weinstein's Santa Monica-based MJW Investments Inc. owns all 10 of the buildings, along with the alley that connects eight of them. That gives him the ability to control the project's ambience and influence the neighborhood in a way other developers--including downtown loft pioneer Tom Gilmore--could not, Gilmore, other developers and architects said.

In the last month, Weinstein secured a commitment letter for $93 million in long-term bond financing. Sale of those bonds, backed by Fannie Mae, would be used to pay off the construction loan once the project is 90% leased. The city has approved zoning changes and the layout of the units, which will be built to condominium specifications for possible sale. And Weinstein has hired architects, engineers and landscape designers.

The project wouldn't be the first to convert old downtown buildings to housing and ground-floor retail stores, but it would be the city's largest--604 lofts, 125,000 square feet of retail space and 115,000 square feet of fashion design showrooms.

"Mark is undoubtedly the 500-pound gorilla," said Donald Alec Barany, an architect whose Santa-Monica based firm was selected last month to carry out design work for the bulk of the project. "It will be a community within itself, which will make it unique."

Gilmore took on buildings that had been shuttered for years in a corridor frequented by transients and devoid of retail. But Weinstein already is collecting rents from sewing shops that fill about 85% of his buildings, and he can maintain some of that cash flow while construction--scheduled to begin in October--is phased in.

And his project, the heart of which is bordered by South Los Angeles and Maple streets between 7th and 8th streets, is situated in the middle of an already vibrant district.

Entrepreneurs hawking everything from Italian suits to ladies' wear and handbags pack the district's ground-floor shops. Some restaurants and cafes already have moved in. And the New Mart and recently renamed California Market Center--which houses a new gift and home-accessories mart--are filled with young fashion designers and wholesalers who are potential tenants for Weinstein's units, said Kent Smith, executive director of the Fashion District Business Improvement District.

The business improvement district's security teams already work to keep the streets clean and safe. In contrast, Gilmore said he has had to contend with three improvement districts that straddle his properties, each with different management.

"I think it's a much more viable location than up closer to skid row," said Cushman & Wakefield real estate investment broker Carl Muhlstein. "The streets are wider and cleaner, and they have those nice, big industrial buildings with steel square frames."

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Plan Includes

Courtyard, Cafes

If Weinstein's project moves forward as planned, an estimated 1,500 people will become new residents in the area--moving downtown one step closer to the Los Angeles that civic leaders and urbanists dream of, a true 24/7 city.

Seven of the buildings are clustered together between 7th and 8th streets, connected by underground tunnels that will help unify the complex. The alley that runs between the buildings--now filled with litter, cars and loading docks--will become a courtyard with open-air cafes.

Many of the existing fashion retailers that front Los Angeles Street can stay, Weinstein said, although he hopes to attract a dry cleaner, a drugstore and a restaurant.

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