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Chinatown Blossom Plaza project halted

A bankruptcy filing stalls a residential and retail complex planned for the former Little Joe's site.

March 07, 2009|Roger Vincent

Financial woes have derailed the development of Chinatown Blossom Plaza, a long-awaited $162-million apartment and retail complex set to rise on the former site of one of Los Angeles' most beloved downtown eateries.

The developer of the project, which was to replace the shuttered Little Joe's restaurant in Chinatown, on Thursday filed for protection under Chapter 11 of the U.S. Bankruptcy Code to prevent its lender from foreclosing on the property at Broadway and College Street.

The filing by Chinatown Blossom Plaza LLC is the latest of several in recent months among real estate developers struggling to complete projects that were planned or underway.

Blossom Plaza had been hailed as a transit-oriented development that would stack apartments on top of shops next to a light rail station. But after a lengthy planning and design process that included many public hearings, construction had yet to begin.

"To me this is a landmark project, a whole new gateway for downtown with Chinatown being in the pivotal point," said City Councilman Ed Reyes, who represents Chinatown and vowed to keep pressing to get the project started.

"We put a lot of time, effort and monetary support into this," he said. About $9 million in public funds has been invested, he said.

Little Joe's had been in business for 101 years and was one of the city's oldest restaurants when it closed in 1998 because the owners couldn't afford to remodel it to comply with new building codes for earthquake safety and disability access.

Since then, Little Joe's and its sprawling chained-off parking lot have been a blight in the heart of Chinatown, lifeless but for the occasional movie or TV shoot. It is a stark contrast to the 1960s and 1970s, when the bar and restaurant were a hangout for Dodgers players and fans, and a destination for the downtown business crowd.

It was also a frequent site for Dodgers news conferences. During Tommy Lasorda's tenure as manager in the 1980s, Little Joe's frequently sent Italian sausage, mostaccioli and linguine to Dodger Stadium, where Lasorda shared the food with his players.

The restaurant and Chinatown had lost much of their pizazz by the 1990s, and Little Joe's closed its doors with little fanfare. Hope for a turnaround surged in 2003 with the opening of the Metropolitan Transportation Authority's Gold Line, a 14-mile train route connecting downtown L.A. and Pasadena.

The Chinatown station is just east of Little Joe's.

Plans for a complex of housing and shops on the Little Joe's site were announced soon after the Gold Line opened by Larry Bond, the developer of a large-scale apartment and retail project across the street from the Cinerama Dome at Sunset Boulevard and Vine Street in Hollywood.

By that time, the city had acquired the Little Joe's property with the intention of redeveloping it. Plans included a city-owned parking garage to serve the train station and visitors to Chinatown.

Bond bought the property along with LaeRoc Partners Inc. of Manhattan Beach, and said he would put up a seven-story complex of 262 apartments over shops and restaurants, along with a public plaza. Bond and his partners formed Blossom Plaza LLC to develop the project.

The fact that nothing has been built is frustrating, said George Yu, executive director of the Chinatown Business Improvement District.

"We at the [business district] have done a tremendous amount of work to restore and revitalize what we call Old Chinatown," Yu said. "Broadway and College is the key corner."

The developer's bankruptcy filing is "a tremendous setback," Yu said. "Larry put his heart, soul and money into this project."

Bond said that he would like to "start tomorrow" on the development, but that his financial partners at Prime Property Fund had "decided not to move forward" and filed a foreclosure action late last year as owners of the first trust deed on the property. Prime Property Fund is a real estate investment trust managed by New York investment bank Morgan Stanley.

"We really felt this would have been a crowning achievement for the city," Bond said. "The Chinatown community has been overlooked for decades but is a jewel in its own right."

Morgan Stanley representatives declined to be interviewed, but issued a statement.

"Prime Property Fund has a fiduciary duty to the many public and private domestic pension plans and other institutional investors which primarily comprise its investors," the statement said. "Prime Property is taking the appropriate action to fulfill its obligations to its investors and to move this project forward with the city of Los Angeles."

The MTA is not involved with the development but hopes to see financial issues resolved, spokesman Marc Littman said. "It would enhance our ridership and hopefully ease traffic in one of the most congested parts of L.A.," he said.

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roger.vincent@latimes.com

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