Funding puts Grand Avenue plan in starting position

The announcement comes after months of delays and questions about the viability of such a massive development in the midst of L.A.'s real estate slump.

But those doubts were eased significantly Monday when the government agency overseeing the redevelopment approved the investment of Istithmar, a fund controlled by the royal family of Dubai.

The fund stepped in with $100 million after one of Grand Avenue's big early investors, California Public Employees' Retirement System, exited the project, saying the organization was already too heavily invested in the downtown real estate market.

The investment from Dubai gives the developer, Related Cos., the money needed to secure construction loans -- allowing it to finally tear down a parking structure across from the Walt Disney Concert Hall, where the first phase of the development will be built. The $2-billion plan calls for shops, condo towers and a boutique hotel -- as well as a civic park -- on city and county land on Bunker Hill.

"There will always be challenges on this project." said Bill Witte, chief executive of Related California, which is overseeing the project. "But we feel very good about where it is now."

Construction was expected to begin last fall, but the time required for design development and project approvals caused delays.

A lot is riding on the project. Grand Avenue is seen by downtown boosters as a way to bring night life and an upscale feel to the city center.

Russell Brown, president of the Downtown Los Angeles Neighborhood Council and executive director of the Historic Downtown business improvement district, said he had been hearing for months concerns that Grand Avenue was in trouble.

"But any large project takes a while to work things through," Brown said. "In many ways, these haven't been routine delays. To be able to go through those hurdles, in spite of that uncertainty, expresses a great amount of confidence in downtown, and in L.A. I think it's going to be an amazing event."

Craig Webb of Gehry Partners said details of the project were fleshed out from the initial schematic design. Those refinements, he said, included figuring out the facades of the project's two towers, doorway locations and stonework patterns -- "pretty specific stuff."