San Pedro Developments Demand Striking While the Iron is Hot
By Terelle Jerricks, Managing Editor
Coastal Neighborhood Council President Doug Epperhart recalls telling a friend that development plans do get completed.
“We’re just now implementing the 1972 development plan after old Beacon Street was torn down,” he quipped.
Epperhart was referring to the original development plan for San Pedro, which tore down a slew of old bars, restaurants and other historic businesses that buzzed with pedestrian traffic from the canneries, naval shipyards and docks of a port that serviced the military invasion in the Philippines and then two world wars.
Downtown San Pedro re-development has always been about how to reconnect San Pedrans to their waterfront and generate the critical mass of visitors necessary to sustain retail development and tourist-oriented businesses on a broad scale. This was before the idea of establishing an economy centered on the arts, culture, entertainment, and education.
Fifteen years ago, as renovation of the Warner Grand Theatre began, artists and civic leaders founded the Arts, Culture and Entertainment District and started construction onto developments such as the Centre Street Lofts, Bank Lofts and the Vue. It was hoped was that these would mostly be owner-occupied condos. It took the bursting of the housing bubble at the start of the Great Recession to bring the boom of that time to a halt. Today we are on the cusp of another development boom with the hope of building San Pedro’s population density to allow the historic downtown to rival other Southern California beachfront cities. But that boom is once again threatened by the possibility of tough economic times ahead. The developments set to come on line include:
- Holland project on Palos Verdes Street between 5th and 6th
- Harbor View House redevelopment at 921 S. Beacon Street
- Johnson Towers on Nelson Street between 5th and 6th
- Boutique Hotel, 544 S. Pacific Avenue
- 24 on Centre, between 8th and 9th
- San Pedro Courthouse
- Highpark Development (formerly known as Ponte Vista)
- Rancho San Pedro Public Housing
The biggest difference between the current development cycle and the last is the discussion of affordable housing. Back then, affordable housing was generally only discussed as a means to support the arts community so as to maintain the reputation of downtown San Pedro’s core as an artist colony, a community whose reputations lent credence to the seriousness of the arts district.
In the past few years, homelessness due to the general lack of affordable housing has become a greater concern. Community members remain divided by how to proactively address the problem.
“The real estate market has been softening as of late,” Epperhart noted. “It will be interesting to see what happens when the new developments come on line in the next couple of years. We’re talking about adding units to a stable housing market.”
Off the top of his head, Epperhart surmised that there were about 30,000 rental units in San Pedro, about half of those occupied. The American Housing Survey found that, using 2016 numbers, there were approximately 20,000 total units in San Pedro, with a roughly 8.4-percent vacancy rate. Epperhart noted that even if there were only 20,000 rental units in San Pedro and 1,000 units were added, that would represent a five percent bump in housing supply.
“Consider what will happen when the new developments come on line in two or three years,” he said. “We have to consider where these new people are going to come from to fill these new developments. Is it from Long Beach, Carson, or L.A.?”
Epperhart noted that 10 years into the recovery from the last recession, no one should be in a hurry to fill the new developments. Market watchers who have been paying attention believe a new recession is going to hit after the first of the New Year. Consumer debt is rising.
Here is what is currently on the development table:
San Pedro Courthouse
The Holland Group, the same developer that would eventually take over the Ominet project at 550 Palos Verdes Street, became the developer of choice for the San Pedro Courthouse in 2016.
The Holland Group and Los Angeles County negotiated terms for two years before negotiations broke down and the county put out a new Request for Proposals.
At the time, Kerjon Lee, communications manager for the county Department of Public Works, said Holland requested terms that were not financially feasible. A letter to Holland stated the developer had requested a 67-percent reduction in property taxes and a free lease for the entire 66-year life of the development agreement.
In so many words, the county called out the Holland Group for being greedy. Unnamed county representatives noted that the Holland Group was unwilling to agree to a Project Labor Agreement.
A new Request for Proposals was issued in June with a deadline set for August. The county was set to make a decision by October. Sources unauthorized to speak on the matter said they are still deciding on a finalist and will name the developer at the end of November.
Highpark (Formerly known as Ponte Vista)
The Highpark development has changed hands once again, and the details that the city and the immediate community have worked out over the years is locked in with 700 units—a far cry from the 1,950 units the original developer proposed nearly 15 years ago.
Harridge Development Group acquired the massive Highpark housing development for $151.6 million.
The project will deliver 676 homes across more than 60 acres at 26900 South Western Avenue. It will include single-family detached homes, townhomes, flats, a jogging trail, park space, recreation centers and “resort-style” amenities, according to its website.
Since its inception nearly 13 years ago, Highpark has faced several setbacks due to its high density, permitting issues, and complicated infrastructure groundwork, the Daily Breeze reported.
The seller, iStar, acquired the project in 2010. It reduced the scale of the site in 2012 and 2013, further reducing the number of homes from the original 1,950 units proposed by the original developer, Bob Bisno.
With Harridge on board, construction is expected to begin later this year.
Boutique Hotel at 544 S. Pacific
West Hollywood developer AJ Khair, known for a number of homes and multi-unit complexes on the Westside and West Hollywood, is planning to build a boutique hotel in the open lot on 6th and Pacific in San Pedro. The seven-story hotel will have 80 keys, a restaurant, and a full bar. The hotel will have 62 underground parking spaces with valet service. There’s been discussion of outfitting the hotel with a device that would offer stack parking to economize on space. The intended market is cruise-ship passengers.
Architecture firm Axis/GFA Architecture + Design is designing downtown San Pedro’s newest proposed hotel and their plans call for incorporating Art Deco elements from the Warner Grand Theatre and other neighboring buildings. That includes a vertical neon sign similar to the one outside the theater.
Property records show that AJ Khair bought the 12,500-square-foot lot in March for $1.6 million.
“The hotel is going to be a huge help to upper downtown,” said Eric Eisenberg, the prior owner of the Pacific Avenue-facing lot. “I like that the hotel will match the color scheme of the Warner Grand but I hope it will include more Art Deco elements, like the stamped concrete in front of the Warner Grand theatre.”
Following other medium to high-end boutique hotels in the Bay Area, the Westside and West Hollywood, stacked parking is being considered for guests who need cars to get to San Pedro, but not while they are here.
“I’m not sure how (stacked parking) would work in San Pedro. We have municipal parking lots in San Pedro that stay empty,” Epperhart said. “Parking is not an issue for San Pedro. When it is a problem, downtown San Pedro will be successful.”
Rancho San Pedro Public Housing
This past August, the Housing Authority of Los Angeles chose the Richman Group out of four developers to redevelop the 21-acre Rancho San Pedro public-housing complex. The Richman Group leads co-developers National CORE Renaissance and Century Housing Corporation. The trio, known as the One San Pedro Project, are tasked with replacing the 478-unit former workforce housing with up to 1,626 residential dwelling units that will consist of new affordable rental units, new affordable owner units, new market-rate rentals, new market-rate home-ownership opportunities, and significant space for community amenities and commercial enterprises.
The main guiding principles of the collaborative’s vision for Rancho San Pedro Redevelopment include: neighborhood services, open space and amenities, inclusive neighborhoods, health and wellness, developing within, immediate investment, and replacing the existing housing first.
The redevelopment site will also include parks, a promenade, Harbor Jogging Trail, community gardens, and bike paths. On-site service providers may include Boys & Girls Club, Youth Development Center, WorkForce Development Center, Local Hire and Apprenticeship Programs, and expansion of supportive service for the residents of Rancho San Pedro community.
Harbor View House
Many in the community would agree that the redevelopment of Harbor View House is a long time coming. It was a great place that served a great need. Just in the wrong place.
“Beacon Street is supposed to be our Ocean Avenue,” Eric Eisenberg, a downtown property owner said. “That’s not possible if (we) have Harbor View House clients walking about.”
Built in 1925 as a YMCA, Harbor View House has operated as a mental health facility since 1968.
Epperhart is also happy something is being done with Harbor View House since it has been sold. It’s one less issue for the community to be divided about. There hasn’t been much discussion about the placement of the current residents of Harbor View House since the sale of the historic building was announced except that they would be relocated to other facilities.
“We had a dozen group homes at one time in my neighborhood,” Epperhart said. “The guy that ran them had died and the homes got sold off.”
The Ocean Avenue Eisenberg was referring to was the one in Santa Monica overlooking the bluff rather the example on the other side of the Vincent Thomas bridge.
“Long Beach is the exact opposite of what we’re trying achieve,” Eisenberg said. “Their downtown maybe financially successful, but they have completely separated their community from their waterfront.”
The identity of the developer has been kept firmly under wraps, named only as the “applicant” in official documents. But according to presentations delivered through its attorneys, the applicant proposes to maintain the existing 24 on-site parking spaces and add 26 bicycle parking spaces. The applicant reportedly purchased an adjacent lot that will enable an additional 23 parking spots for a total capacity of 47 cars and they are also committed to providing an additional 23 parking spots for a total capacity of 47 cars with valet services.
The previous owner (HealthView Inc.) was supposed to complete the relocation of current residents of Harbor View House by July 2019. But that timetable maybe speeded up now that the elevator at the historic landmark has been found to be irreparably broken, forcing HealthView Inc. to move the residents sooner rather than later in order to be in compliance with the American Disabilities Act.
Johnson Tower (Formerly known as Nelson One)
Councilman Joe Buscaino has been trying to get the much-maligned Nelson One project for a few years now. On the concept alone, the project has been panned as out of character with the neighboring architecture and the narrow one-way street on which it would be built.
The other issue is that he chose developer Richard D. Lamphere. Lamphere was connected to a failed land deal that cost two private investors hundreds of thousands of dollars. That ultimately led to his conviction of fraud and a prison stint in September 2016.
Two years later, Nelson One plans are still there. But it’s now called Johnson Towers, named for the latest developer to take on the project, Johnson Teh — the co-founder of Black Swan Equity. The firm has offices in China, Singapore and Australia.
Teh presents a colorful character in his social media profiles, describing himself as a hybrid between a ship and wolf who believes he’s a bear.
In his LinkedIn profile, the investment banker turned global fund manager says many of his friends, and a few of his foes, say that he has a capitalist mind and a true communist heart — or vice versa when he’s in China.
24 on Centre
The Santa Clarita-based developer Williams Homes broke ground on 24 on Centre in October 2017.
The project will consist of 24 single-family residences, each with a rooftop deck and a parking garage. So far, the foundation and steel frames are in place.
Renderings of the development, which was designed by KTGY Architecture + Planning, portray a collection of contemporary three-story buildings, located along a central driveway.