Aviation Station TOD: Public-Private Development in L.A.

The Planning Report published an interview with Roger Moliere last month focused on the 30 joint development projects that Metro is engaged in having developed. What was your reaction?

I found it very exciting. Building has been slow in Southern California and in the nation as a whole. We’ve been looking toward infill and TOD as the future of growth in Los Angeles. A lot of the apartment builders, especially, are excited about the future with rising rents and things like that. We view this, at least in the short term, as the new face of L.A. It’s very exciting to see Metro involved in this, knowing that they have money from Measure R to increase our transit opportunities and allow more development. With SB 375 and AB 32, there are pushes at the state level to reduce vehicle miles traveled and greenhouse gas emissions. That’s where development is aiming right now. That’s where the builders see it and the developers see it. There are going to be real opportunities for private property owners in that area too. 

Cox, Castle, & Nicholson has provided land use lawyers in Los Angeles for quite some time. You’ve seen lots of ups and downs in the market. Talk a little bit about what your clients, present and prospective, view as the opportunities for this public-private partnership opportunity with Metro. What are they asking you to do?

Over the last ten years, we’ve been representing master-planned subdivisions—large projects built on open space out on the fringes of urban areas. Even those traditional builders are now interested in looking at infill and doing things that they haven’t done before. Projects are tending to be a little bit smaller. The biggest challenge with these TODs, especially in L.A., is land assembly. A lot of these areas have single-family, post-WWII neighborhoods around them, areas of low density and  industry, depending on which transit stop you’re talking about. It’s definitely a challenge. That’s why our Aviation Station project, which we’re working on right now, has been very, very desirable to a lot of our clients. We’ve had almost all of our homebuilders out there looking at it, and all of them have been interested.

Talk about Aviation Station on the Green Line. What is its shape, who are the partners, and how is it progressing?

We’ve been working on the Aviation Station project for a couple of years. We filed applications with the county of Los Angeles in January of 2009 and our notice of preparation of an EIR went out in May of that year. We’ve been working on it ever since. We had hearings at the Regional Planning Commission in February and April of this year, and we’re looking forward to moving to the Board of Supervisors to get this approved. We were very lucky to get involved with both Metro and an adjacent private property owner. 

The LAX/Aviation Station is a Green Line station at the core of Metro’s short-term and long-term goals for transit. It’s currently the last stop before you get to LAX, and we all know Metro has plans to extend rail, in some form, to the airport. There is talk now about whether that will take the form of a people-mover or an extension of the Green Line, but in whatever manner the plan is to actually get transit to LAX. The Crenshaw line, which will have a stop here as well, is going to happen. This station is at the confluence of a lot of different things planned for our transit system. 

Our private property owner client happened to be very lucky. As I said, land assembly is such a big issue. Our client is the Kroeze family, and they own the Wild Goose Bar and Restaurant. I’m sure people are familiar with it.  Their father was very smart. When you own a business, it’s nice to own the residences nearby. Every time a house came onto the market, they bought it. Over the course of 50 years of running the business, they purchased what is essentially an entire city block. Then the Green Line came in. They are just very lucky that they owned all this land adjacent to it. 

Then Metro comes and knocks on their door and says, “We really need your help. This station needs improvement. We need services for our riders. We need density. We need people living here. We need to increase ridership on the Green Line. Do a joint project with us.” The Kroeze family was our client for almost a year before we filed any entitlement applications. We were talking to various different private consultants about what we should put in there. We looked at office. We looked at parking for LAX. We did a lot of studies and ended up with a mixed-use project on both Metro land and the private property adjacent to it. 

Right now, the Green Line property is owned by Caltrans, and they lease it to Metro. Part of this project will involve a decertification by Caltrans. Caltrans will sell the land to Metro, and Metro will lease it to a developer to develop the project that we are getting entitled right now. It is a joint development where there is a private property owner next door to a public lot and they function together as one project. It’s going to be a phased project because we’re going to have different builders. But it’s one project design.

What does the project look like as proposed?

The Planning Commission considered 390 residential units. Some of those units are condos, and some are apartments. Because of the nature of the public ownership and the fact that we would be leasing the land, we couldn’t do condos on that part of the site. The project will have apartments on the Caltrans land and condos on what we call Lot 1, which is the Kroeze lot. It totals out to 278 condo units and 112 apartment units. The development site altogether is about six acres, split about evenly. The Caltrans lot is a little bit smaller, at about 2.7 acres, and the Kroeze lot is about 3.3 acres. It has about 30,000 square feet of commercial space on the ground floor. 

Have you put a team together to design it and to build it? 

Our engineer is down at the Planning Department right now filing a revised project that actually decreases the number of units a little bit. The reason we’re doing that is because once we got to the Regional Planning Commission, we had a lot of interest from builders and we had a lot of comments from builders saying, “This is probably not how we would do it. We would do it more like this.” We have made revisions to make the project more attractive to builders, but the project will look the same. We’ve been talking to lots of large builders. We have it narrowed down to one now, but it’s premature for me to identify the company. 

What role does Metro play? In the interview with Moliere he described Metro as a partner. What role did they play in the physical design and composition of this six-acre joint-use development project?

Metro played a substantial role. We spent a lot of time both with Caltrans and with Metro. We spent a lot of time in Roger’s office going over the design, keeping them apprised of what we were doing and making sure everyone was comfortable. 

The Caltrans lot requires improvements to a Caltrans facility. They care a lot about it, and we had to be very careful that we didn’t reduce any of the parking at the park-and-ride lot. Where we are putting the apartment buildings right now is a bus facility. We also had to work closely with Culver City Bus, the Santa Monica Big Blue Bus, and Metro’s bus division. Before we can build the apartments, we have to relocate the bus facility further north. It’s now going to be at the corner of Aviation and Imperial. We’re building a whole new bus facility for them. It’s very state of the art. None of the other bus facilities that they have now are as good as this one is going to be.

Metro will be involved in that because it’s their facility and it’s going to be their property, but we haven’t really worked out the details with Metro in terms of who is paying for what between the Kroeze family and Metro. We’re negotiating a deal with them for how the Caltrans lot will be developed because that is going to be leased to us once they’ve purchased the property. 

It sounds like in the work of Cox, Castle & Nicholson it is easier to do edge development than infill because the complication of the parties and the density issues. Is that so? 

The issues are very different. I don’t know that it’s easier. We got through the entitlement process a lot faster with this project than we have with our master-planned subdivisions.  For example, the most recent project that we got approved through the County was a 1,200 unit subdivision in Santa Clarita called Skyline Ranch for Pardee Homes. That project took six years to get through the county. This one took two. We had tremendous support from the Second District of the county. Supervisor Mark Ridley-Thomas’s office has been very supportive and really helped us. The staff has been wonderful. It has been lovely in contrast. 

In some ways it’s easier. But you’re right: there are different issues. It’s immensely complicated. You have an active homeowners association. It’s really a neighborhood group, but they are people you have to work with. We have industrial neighbors who care about encroaching residential development. There is Caltrans and Metro. The city of El Segundo is adjacent, as well as the county and the city of L.A. 

This is going to involve a LAFCO process as well. The Caltrans lot right now is in the city of L.A., so we are going to have to go through a LAFCO detachment to put it into the county. The biggest challenge in this project has been the sheer number of agencies. I’ve never had this many meetings on a project in my life. 

What is the timeline going forward?

I just prepared an aggressive schedule that would have us get approval at the Board of Supervisors for the revised project in October. Then we would finalize and record our subdivision map. We have to go through LAFCO. One of the reasons why we did this revision is so that the project could be developed in phases. The private property lot could be built faster than the Caltrans lot because it doesn’t have to go through LAFCO. That phase is probably going to develop first. 

From your conversations with Metro and the bidders for building, what is the vision for who is going to live there, and why they are going to live there?

It’s going to be young professionals working in the South Bay and Downtown. I expect it will be people who want to be on transit. I expect people from Northrop, which is across the street; young engineers will live there. It’s going to be professionals—probably not so many families because the units are on the smaller side. Maybe some young families will live there, but generally I expect single professionals with a disposable income who want to ride transit and are not interested in sitting in traffic. 

As you have brought your clients, as you mentioned earlier in our discussion, to see the Aviation Station project, what do they grab on to? What are the features that they like the best?

They like the fact that there is an employment center right there. Every apartment builder we speak with expects this to be filled. There is an apartment project that was built a couple of years ago around the corner called Pacific Place that has been very successful. 

There is already precedent for this kind of project. The employment center is the key thing, and being adjacent to transit. They know that the young people coming up are moving away from homeownership and toward living near transit.

Do you think this will be a prototype for other TOD projects that Roger envisions and others envision on the local level?

It’s been viewed as a success. As I mentioned, the land assembly is the biggest challenge. Whether or not it can be duplicated on this scale is perhaps doubtful, unless a private property owner can buy the land. 

The Planning Report has extensively reported on efforts by local jurisdictions to improve their planning and development process, particularly the city of L.A. You found the county process here to be, as you said, wonderful. What is it about the LA County process that should serve as a model for local jurisdictions as they try to streamline their development processes?

I believe that these types of projects, if they are going to get pushed, need a champion within the city or county. We were assigned to what is called the Special Projects Section in the Department of Regional Planning. Sam Dea runs that section. We had a very wonderful planner named Carolina who just really cared about this project. 

They believed in it, and they made sure that other departments cared as much and made it a priority to get it though. We needed Public Works to review things like driveways and access, and we worked closely with all of them. Everybody was supportive. They liked the idea of this project and they wanted to support transit-oriented development. 

This is a unique project in the county. They are used to Santa Clarita subdivisions. This project was very new to them, and it was exciting. 

In the MIR interview last month, Roger Moliere addressed  the public-private nature of these TOD projects and that no public dollars from Metro were involved in their development. Is that the case here with Aviation Station?

It is the case. They have not had to spend any money on this at all. Our private property owner paid for the EIR covering the Caltrans land and has funded the entire entitlement. Metro has not seen a bill from any of the consultants. It has all been done by the private property owner.

If we do this interview a year for now, talking about this TOD project and others that are being proposed by METRO, what will you likely be sharing in the way of progress? 

I hope that there will be more projects closer to being built. And I’m hoping that there will be a shovel in the ground on this one. 

What would stand in the way of that happening with the Aviation Project?

It’s just that it takes some time to get things finalized. There are improvements that have to be made. One of the challenges with infill is that you’ve got infrastructure improvements that have to be done. For instance, the neighborhood here complains about water pressure. We have to upsize pipes and things like that because it’s old infrastructure that you have to make ready for increased density and new development. We have to do all that stuff before we can actually build. 

I expect that this project, at least the private lot, will be built very quickly. Everyone is ready to do it.