Develop and Sell
Publish Date: 07/22/2005
Downtown News
07.22.05
by Kathryn Maese
Develop and Sell
The transaction continues a growing trend in which Downtown developers sell all or part of their projects before they are completed, and sometimes even before they break ground. A number of dealmakers have put varying portions of their properties on the market in the last year, both to free up cash for new developments, and to capitalize on the premium prices some investors are willing to pay to get a toehold in the Downtown market. Developer Mark Weinstein's 165-apartment Santee Court (the first of several phases in the project) is expected to fetch as much as $45 million, according to real estate experts. Already, two properties in that same nine-building development have sold for a total of $20 million.
Meruelo has been in the headlines in recent months not only for his significant contributions to Mayor Antonio Villaraigosa's campaign, but for a contentious lawsuit involving land around the Southern California Institute of Architecture (SCI-Arc) in the Arts District. Though the school claimed it had the right to purchase the building where it has a lease, a judge ruled against SCI-Arc, paving the way for a sale to Meruelo, who plans to build housing near the school.
Meruelo Maddux Properties owns some 90 parcels of land on 70 acres throughout Downtown Los Angeles, making the firm the largest private property owner in the area. Though the developer has several residential projects in the works, the Union Bank Building will be the first to break ground.
The Union Bank Lofts garnered attention last September during an episode of "Road Trip With Huell Howser," in which longtime bank employee Bruce Corbin recounted the building's storied past. Corbin, who worked in the Downtown headquarters for 30 years, said the bank specialized in loans to the movie and apparel industries. Notable figures such as Albert Einstein, Winston Churchill and Gene Autry visited the second floor dining room, where they were entertained by bank founder Kaspare Cohn or his son Ben Meyer. The founder's room has a hidden vault where alcohol was stashed during Prohibition.
"The building opened in 1922 and was like a miniature Hearst Castle," said Corbin, who is vice president of the commercial banking group and chair of its foundation. "During that time it was a focal point for the Los Angeles community in that it served Downtown businessmen."
Twenty years after the financial institution moved to the Miracle Mile, leaving the building vacant except for a handful of garment tenants, the property could again become part of a thriving Downtown. Nearby projects include the Eastern Columbia Building, the Brockman Building and the Orpheum Lofts.
"The architecturally distinctive building is within an emerging neighborhood where there is certain to be a substantial amount of street life, including restaurants, theaters and clubs," Maddux said.
Contact Kathryn Maese at kathryn@downtownnews.com.
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