They have the world-class architect. They have the cutting-edge design. They have the financing. But Eli Broad and the other backers of the Grand Avenue project still face formidable hurdles in creating an upscale 24-hour vibe in downtown Los Angeles.
Building Frank Gehry's glass-curtained towers is just the beginning. The developers must lure back the kind of high-end retailers who began abandoning downtown Los Angeles 50 years ago.
Although Grand Avenue's developers say they are close to locking in a bookstore chain and a boutique hotel, they quietly dropped plans to build an art-house movie theater in the complex because they could not find one willing to take a chance on downtown.
Throughout downtown, developers are finding it is a lot easier to lure well-heeled condo buyers to the urban core than businesses. In what some see as an ominous sign, some of the historic bank buildings converted into lofts have filled their upper floors with new residents but have failed to find retail tenants for the street-level spaces.
Over the last year, downtown business groups have aggressively tried to persuade popular stores in places like Pasadena and Hollywood to open branches in the city center.
Despite tours and demographic presentations, many well-known chains, including In-N-Out Burger, Trader Joe's and Barnes & Noble, have so far said no to the area.
"The chains aren't interested yet," said Warren Cooley, project director of the Historic Downtown Retail Project, a city-funded endeavor to attract businesses downtown. "There's not enough population and critical mass. There are still challenges. The homeless issue on the street is a concern when real estate investigators from big chains look. That's sometimes something that concerns them."
Rick Caruso, the developer behind the Grove and several other highly successful shopping centers in Southern California, said he is taking a wait-and-see approach to downtown.
"We've looked at downtown a lot, and I have not been able to answer the primary question of who is my customer on evenings and weekends," he said.
So far, Caruso added, downtown's abundant daily office workers and growing number of residents still make up too small an audience to lure fashion boutiques and home furnishing stores. Landlords may be able to attract some retailers by offering reduced rent and other incentives, he said, "but good retailers are going to arrive well after their customer has settled in."
