July 31, 2014 - From the August, 2014 issue

Len Hill's New Legacy Project: Antidote to Orsini-zation

Len Hill and Yuval Bar-Zemer form the leadership behind Linear City—an urban-centric real estate development partnership. Together, they have catalyzed dramatic change in Downtown Los Angeles’ Arts District. Hill led TPR on a tour of Linear City’s newest project—They Elysian—located between Chinatown and Echo Park on Sunset Boulevard. Here, he explains the vision for this newly resuscitated historic structure and provides insight on transformations happening at the city’s core.


Len Hill

"We’ve created a legacy that is manifest in the transformation of blight into beauty, of neglect into neighborhood." —Len Hill

"The city has failed to identify the importance of maintaining the archaeology of the original buildings and the character of individual neighborhoods." —Len Hill

"I’m concerned that we are on the verge of the mass "Orsinization" of Downtown." —Len Hill

Linear City, your real estate development partnership, describes itself as an entity that does “transformative projects which are located on the urban frontier.” Share with us how your latest development, The Elysian, comports with that description. 

Len Hill: The Elysian is the fifth of a group of projects Linear City has undertaken, beginning with its transformation of the Toy Factory Lofts on Industrial and Mateo, followed by the Biscuit Company Lofts, the 1820 building on Industrial, and the 7th+ Bridge complex south of Santa Fe. Each of those projects is adaptive reuse in the truest sense of the word. We aim to celebrate the fabric of overlooked and often derelict neighborhoods. We reimagine and repurpose those buildings in a way that brings new life, new dynamics, and a sense of promise to previously blighted urban areas.

The Elysian is a reinvestment and modernization of a building designed by one of Los Angeles’ most revered architects, William Pereira. Could you describe the building’s history? 

Pereira designed an entire campus for the Metropolitan Water District starting in 1960. The MWD hired Pereira at the height of his architectural influence—at the time he was doing Transamerica, the LA County Museum of Art, CBS TV City, the UC San Diego Library, and a number of other very significant structures and planning exercises.

The original Pereira plan called for both a lowrise and highrise component. For some reason, the MWD elected to build the lowrise first and occupied that structure in 1963. Construction on the adjacent office tower began in 1970. The MWD vacated the premises in 1994 and subsequently sold the property to Holy Hill Community Church. HHCC demolished the main entrance that defined Pereira’s lowrise and built a 1,500-seat sanctuary.

The Church did not occupy the tower. Instead, they applied to the Planning Commission for an air rights subdivision to make the tower a separate legal parcel with the intention of creating a housing project. HHCC was successful in getting the properties separated after granting a permanent parking easement to the surface lot behind the church to the tower. Subsequently, HHCC failed to implement their housing plan.

Around 2004, HHCC sold the tower to Michael Kamen, who had plans to convert the building into 92 market-rate condos. Planning approved Kamen’s project. The Church then brought suit against Kamen claiming that the assignment of surface parking was not absolute. Kamen prevailed. The Church appealed. After nearly four years of legal battles, Kamen was vindicated by the State Court but was defeated by the financial meltdown of 2008.

When Linear City bought the tower in 2011, it had stood empty for nearly 18 years. It was a bombed-out, graffiti-scarred hulk.

Elaborate on how Linear City proceeded from purchase to occupancy of The Elysian.

The Elysian, which was originally an eight-story office tower, had been gutted prior to our purchase. When Yuval, my partner in Linear City, and I bought it in 2011, we inherited the entitlements and permits that Kamen had secured. We felt that the condo market was soft but that their was a strong demand for rental housing. We had a made a similar determination when we did the 7th+ Bridge project.

Working with architect David Lawrence Gray, we modified the condo layout into plans for a 96-unit apartment project that would include an outdoor garden space and a ground-floor restaurant. Once we got the approvals from Planning, we proceeded to implement that conversion.

It’s taken us nearly three years. Throughout the process, we have been guided by the design concepts that were baked in from the beginning by Pereira’s vision. At the same time, we have transformed an office complex into 96 architecturally exciting live/work loft/apartments.

Linear City's ElysianCould you share how successful to date The Elysian has been in marketing its live/work rental units?

They’re coming along very well. We only got our TCO on May 30 and, as of July 14, we have rented 48 of the 96 units. We are still in the process of putting the final decorative touches and landscaping in place. In my estimation, we will have full tenancy by the end of September. 

Len, it’s reported that rather than borrow, your partnership invested $30 million into The Elysian. Describe the improvements you invested in, the units offered, and the resulting value proposition for tenants.

Yuval and I operate with our own capital, which is one of the reasons we’ve been able to move efficiently in both acquiring and executing the Linear City projects. We purchased the abandoned tower for cash and began construction without a construction loan. It took us nearly nine months to arrange a construction loan with PNC. But we were moving ahead throughout the negotiation and were willing and able to complete the project without financing if we couldn’t secure reasonable terms for financing. We now have more than $30 million into the project. On completion, the 96 units will range in size from about 700 square feet up to about 2,000 square feet. They will range in rental price from about $1,400 a month up to $6,500 a month. The penthouses on the top floor are very dramatic two-story structures and command the highest rent.

One of the things we love about the building is not merely its size—just over 100,000 square feet—but also its volume. Real value needs to take into account cubic footage. Internal volume determines liveability. Standard-size units at The Elysian have 11-foot ceilings, ranging up to 20-foot ceilings in the penthouses. And all the units have expansive balconies.

The entire building has been completely re-glazed with double-pane, energy efficient, floor-to-ceiling glass. All the mechanical and electrical systems are brand new: elevators, fire life safety, the HVAC, the water and power system. What we have is this magnificent and eloquent Pereira architecture reborn into a contemporary building that still has the defining characteristics of what Pereira originally mapped.

Advertisement

The Elysian sits on a Sunset Boulevard promenade just northwest of downtown Los Angeles. Elaborate on the significance of your site choice, and the potential you see for transforming the area. 

Linear City has always looked at the opportunity off-the-beaten-track. Our goal has not been to find space on Rodeo Drive or Montana or Melrose Place—locations that have already proven extraordinary value. Linear City is willing to bet on areas that are out of favor and which will be brought back to life by our transformative projects.

The Elysian represented a new opportunity. The building is at 1115 Sunset Boulevard, right off White Knoll. If you look at the section of Sunset that runs between Echo Park and Chinatown, The Elysian is located at the weak link in that chain. Sunset, which is a vital artery among our city’s transportation corridors, falls apart between Echo Park and Chinatown. There is virtually no significant, walkable space and very little housing. It’s the largely abandoned stretch of a very significant street. When the building came for sale, the pricing was consistent with the depressed surroundings. The abandoned office tower was right in our strike zone. It was underappreciated in an underdeveloped neighborhood. And, at the same time, it had great style and the potential to be a catalyst for positive change.

Looking at housing Downtown—from Chinatown to Echo Park—what’s your assessment of the marketplace going forward? 

I think it’s going to be extraordinarily bright, if we plan it correctly. I’m a native Angeleno, born and raised, and I was largely educated here. Downtown LA was a well-kept secret when I was growing up in Westwood. I knew people worked there, but it never occurred to me that people actually lived there. We’re beginning to see the significant transformation of a once-overlooked downtown, with the possibility of imagining Downtown LA as the Manhattan of the West Coast.

Manhattan, after all, is defined by rivers. It’s an island. But think of the East River and the Hudson in terms of freeways. Downtown has four concrete rivers that define it: the 10, the 110, the 5, and the 101. To see that part of the city reemerge as a metropolitan center with a diverse range of housing opportunities is really exciting.

Downtown could never really become a city in a true, metropolitan, world-class sense until its office component was matched by significant housing components. I remember one of my first conversations with Jack Kyser when he was still functioning as the key economist for the city and county. Jack was concerned that if we had over 15,000 housing units Downtown, we would have saturated the market. I thought Jack completely misunderstood the possibilities, and I was willing to bet by investing heavily to the contrary. I believe we could triple the number of housing units Downtown and still not be at saturation.

Downtown will emerge as a successful world-class metropolitan city when we get a significant stock of housing ranging from artist lofts in the Arts District to high-density high-rise housing in the South Park complexes. Each neighborhood must be allowed the opportunity to define itself based on its own archaeology and past history. Urban transportation corridors often define what level of density an individual neighborhood can support. I believe that we are still well short of realizing the housing necessary to fully animate Downtown LA. 

To close, it’s been more than five years since your Arts District development projects came on the market. Now, The Elysian. How satisfied are you and Yuval with what Linear City has been able to accomplish? 

I’m very proud of what Linear City has accomplished. We’ve taken what was seen 15 years ago as a blighted part of town and turned it into a blossoming neighborhood filled with restaurants, cafes, coffee houses, and a vibrant street life. We started with Toy, a bankrupt toy-stuffing facility that employed 12 people working in a quarter-of-a-million square feet. Linear City then focused on the National Biscuit Company building across the street and the 7th+ Bridge project on the other side of 7th.

It’s been a remarkably gratifying process—not just a profitable one. The significant reward I’ve received from the Linear City partnership goes beyond the return on initial investment: It’s the sense of pride. We’ve created a legacy that is manifest in the transformation of blight into beauty, of neglect into neighborhood.

That complex between 6th and 7th Streets speaks volumes about how transformation is possible, particularly since we’ve done it in a manner that resonates with the archaeology of the original neighborhood. One of the reasons people have been attracted to Toy, Biscuit, and 7th+ Bridge is that they’re unusual buildings. They have character.

At the same time, I realize we are at a crossroads. Linear City has been a trailblazer. Suddenly even the Wall Street Journal has discovered Downtown. The gold rush is on. But, from a planning standpoint, the city has failed to identify the importance of maintaining the archaeology of the original buildings and the character of individual neighborhoods. There are just too many cheap, Type-V boxes being erected. I’m concerned that we are on the verge of the mass "Orsinization" of Downtown.

We forget that some of the most important anchor tenants in metropolitan Los Angeles are educational institutions—FIDM and Sci-Arc most importantly, but our neighbor at USC is of huge consequence, as well. It’s going to be very interesting now to see what happens behind Sci-Arc, which itself is a wonderful adaptive reuse project. Sci-Arc, a critical component of Downtown, did this brilliant job of converting their warehouse. Now we’re looking at the prospect of the large acreage behind it transforming into just another five-story, Type-V, residential planned community.

I think that the design of the proposed project behind Sci-Arc will have a profound impact on the future of both the Arts District and Downtown in general. We will very shortly see how the city reacts to the plans that Legendary and its associates have submitted—and whether we will have something that reflects the history of the neighborhood with true loft-like characteristics, or whether there will be a planned, small-unit development there that turns its back on the rest of the Arts District. 

(Photo courtsey of Linda Kasian Photography)

© 2014 The Planning Report | David Abel, Publisher, ABL, Inc.