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Grand Avenue project developer might miss deadline to start work

Related Cos. agreed to pay the Los Angeles Grand Avenue Authority penalties totaling $250,000 a month until ground is broken if construction did not begin by Feb. 15.

January 13, 2009|Cara Mia DiMassa

The developer behind the massive Grand Avenue project has met all of the required milestones on the downtown development but probably won't meet next month's deadline for beginning construction.

Last year, Related Cos. agreed to pay financial penalties to the Los Angeles Grand Avenue Authority if ground wasn't broken by Feb. 15. Penalties would total $250,000 a month until the project breaks ground.

If construction on Grand Avenue has not begun by February 2011, the authority has the right to renegotiate the deal.

With the current state of the credit market, it is likely that Related will pay some penalties to the authority starting next month.

Related officials Monday told the joint city-county authority overseeing the project that they have met all the deadlines required by the panel but that the $3-billion project will not move forward until the developer can obtain funding for the project.

Among other things, the developer produced 80% of the project's construction documents before its Dec. 15, 2008, deadline.

Related also paid most of the costs for the project's design needs and has been providing monthly updates on its project, said Nelson Rising, chairman of a committee overseeing the negotiations on behalf of the city and county.

"We are near the finish line," said Related California chief Bill Witte, who added that the project will be in position to move forward once the credit market allows Related to obtain financing.

In the meantime, Witte and others said they were moving forward with the design of a 16-acre civic park that is part of the project. They have completed schematic designs and are waiting for cost estimates.

A report on that and a plan for a business model to run the park are expected to be presented at the authority's February meeting.


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