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New Yorkers Take a Swing at L.A. Pitch

A local delegation of civic and business leaders tries to sell Manhattan investors on the value of downtown real estate.

November 15, 2002|Thomas S. Mulligan | Times Staff Writer

NEW YORK -- A crowd of about 75 New York real estate pros was happy enough to hear that downtown Los Angeles has the Staples Center, a glittering new cathedral, good freeway and rail links and a soon-to-open Frank Gehry-designed concert hall.

But what about schools and grocery stores, the New Yorkers wanted to know.

For a delegation of business and civic leaders who staged a one-stop road show Thursday in Manhattan to boost investment in downtown L.A., it was an encouraging line of inquiry.

The questions, which came at the end of a 90-minute breakfast meeting in the posh Plaza Hotel, showed that Gothamites were thinking about amenities that would support the center city's residential life rather than just its commercial and entertainment aspects.

They understood that it was residential development -- not stock brokerages, banks or law firms -- that finally brought nightlife to downtown Manhattan not so many years ago.

And the Angelenos were glad to provide answers.

Eli Broad, chairman of AIG SunAmerica Inc. and chief of the L.A. delegation, said state and Los Angeles Unified School District bond issues that passed in the Nov. 5 election would provide millions of dollars for charter schools and public schools in the center city.

City Councilwoman Jan Perry, whose 9th District includes most of downtown, added that an Albertson's supermarket was about to open on Flower Street to serve the growing residential population.

In investment terms, the central message of Thursday's sales pitch was that downtown L.A. is a value play -- overlooked, underappreciated and, unlike some real estate hot spots on both coasts today, not close to being a bubble.

The delegation included John C. Cushman III, chairman of Cushman & Wakefield; Timothy J. Leiweke, president of Staples Center owner Anschutz Entertainment Group; Bob Graziano, president of the Los Angeles Dodgers; Carol Schatz, head of the Downtown Center Business Improvement District; and Jonathan Kevles, deputy mayor of economic development.

A number of New Yorkers didn't need to be sold; they're already invested in downtown L.A. The audience included, for example, representatives of Praedium Group, which bought a Wilshire Boulevard office building last spring; and TIAA-CREF, the big teachers pension fund, which also has a commercial building on Wilshire.

Stephen M. Ross, chairman of Related Cos., developer of the $1.8-billion AOL Time Warner Center off Central Park here, quipped in an interview after the breakfast that Los Angeles probably has all the developers it needs. He said, however, that his firm has two residential projects in Little Tokyo and is well aware of the area's progress.

Chris Hughes, a principal of Praedium, said he was impressed to learn that architectural and engineering firms are moving downtown. Such middle-market tenants often participate in the bargain-hunting phase of a city's resurgence, to be followed later by bigger corporate fish.

Maria Fiorini Ramirez, who heads an investment consulting firm in Manhattan, said the meeting made her want to at least consider downtown as a potential real estate bargain for some of her commercial clients.

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