Neil Shekhter has lost three more apartment properties, this time to foreclosure. 

Bank of Southern California foreclosed on 1007 Lincoln Boulevard, 1038 10th Street and 1516 Stanford Street, according to a trustee’s deed filed last month. 

Shekhter owed $15.8 million in unpaid debt tied to the three properties, which total 24 apartments, according to the deed. 

Bank of Southern California foreclosed with a credit bid of $9.5 million at a public auction, coming out to about $394,000 per unit.

The bank was also able to acquire the properties for less than what Shekhter paid for the three between 2015 and 2016. Shekhter paid $10.6 million total, according to property records filed with Los Angeles County.

Bank of Southern California did not respond to requests for comment. Shekhter and WS Communities CEO Scott Walter have previously declined to comment on the deeds-in-lieu and did not respond to a request to comment on this story. 

The foreclosures come a couple of months after Shekhter’s firm, WS Communities, lost nearly half of its portfolio through deeds in lieu of foreclosure, a non-judicial process that allows a borrower to hand over properties to lenders in exchange for debt forgiveness. 

Entities controlled by Shekhter handed over almost 30 parcels to lenders Madison Realty Capital, Hankey Capital and Lightstone Capital — across different transactions — relieving more than $1 billion in unpaid debt. 

Bank of Southern California’s foreclosures come after the bank had sued Shekhter-owned entities and three of Shekhter’s sons — Alexander, Adam and Alan — claiming default on a $16.2 million business loan tied to the properties. 

Shekhter and his sons obtained the loan in 2022, just days after the Federal Reserve hiked rates for the fifth time that year. The interest rate on the debt started at 7.25 percent, higher than the average mortgage rate at the time, and ballooned to 9.5 percent a year later.

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Los Angeles

Shekhter’s WS Communities defaults on Hankey Capital loan

Shekhter’s sons each signed the loan with unlimited personal guarantees with recourse provisions, according to court documents, meaning if the entities could not pay back the money, the three of them would have to. 

Bank of Southern California successfully pushed the court to appoint a receiver on the three properties, which will handle leasing, rent collection and evaluate financial statements. Attorneys for Shekhter and his sons have not responded to the lawsuit, which is still pending.

The post Neil Shekhter loses three more Santa Monica apartment buildings appeared first on The Real Deal.

L.A. office dealmaker Tony Morales, where are you?

The veteran senior managing director of JLL’s Los Angeles office has left the firm — and has disappeared, according to CoStar News. 

Morales had worked with JLL for nearly 16 years, according to his LinkedIn profile, brokering real estate leases as a tenant representative for major companies.

His major deals include DirectTV (1 million square feet), Yahoo (800,000 square feet), Electronic Arts (500,000 square feet), Disney (470,000 square feet), William Morris Endeavor, now known as WME (400,000 square feet), Herbalife (300,000 square feet), Spotify (150,000 square feet) and Cartoon Network (80,000 square feet), according to a JLL webpage.

Prior to JLL, he spent a decade at Los Angeles-based Maguire Partners, in charge of leasing.

His exit marks the latest high-profile departure from a major brokerage.

New York City dealmaker Bob Knakal left JLL earlier this month, while Carl Muhlstein slipped out of JLL Los Angeles in December to start his own firm. Last month, longtime New York broker Darcy Stacom left CBRE to launch her own firm.

A JLL spokesperson confirmed that Morales no longer worked for the Chicago-based firm, according to an email, but cited a policy of not commenting on personnel moves.

Morales didn’t respond to a phone call from CoStar News requesting a comment. It’s not clear where Morales will land, or what he’ll do next.

Last week, the company officially known as Jones Lang LaSalle sent legendary New York broker Bob Knakal packing after a glowing profile ran in Sunday’s New York Times, which mentioned the firm once in more than 1,700 words.

— Dana Bartholomew

Read more

New York

The Daily Dirt: Bob Knakal gets a glowing profile and a pink slip

National

JLL eyes layoffs as profits tumble 59%

National

JLL reports $9.2M loss

The post Veteran LA office tenant rep Tony Morales leaves JLL appeared first on The Real Deal.

Alexandra Hack, a principal at Cedar Street Partners, has taken on an expensive endeavor. 

She’s one of a handful of developers testing out the viability of builder’s remedy in California’s courtrooms in order to get more housing built.

Builder’s remedy is a long-forgotten, untested loophole that is essentially a penalty for California cities that fail to get state-approved housing plans in order by a certain deadline. 

In theory, it’s a slam dunk — if a city is out of compliance, developers can bypass local zoning rules, as long as 20 percent of the project is affordable. The reality, however, is more complicated.

Hack’s builder’s remedy journey began in November 2021, when her firm’s application for a mixed-use residential and retail project located at 600 Foothill Boulevard project in La Cañada Flintridge was denied. Litigation followed. 

Over two years and “millions of dollars” later, Hack got her win. 

On March 5, the Superior Court of Los Angeles ruled in Hack’s favor in the case of California Housing Defense Fund v. City of La Cañada Flintridge, ordering Cedar Street Partners’ application to be processed in accordance with state law as a builder’s remedy project.

“This decision demonstrates that cities have a legal obligation to allow housing development to address our severe housing and homelessness crisis, and that if they fail to develop local plans to meet this need, the builder’s remedy will allow for it regardless,” Dylan Casey, who runs California Housing Defense Fund, told TRD on March 5. “Cities can no longer pretend that the builder’s remedy doesn’t exist.

The following day, Cedar Street got its own final decision, ordering the City of La Cañada Flintridge to “set aside” a decision from May 1 rejecting the project and saying it did not “qualify” as builder’s remedy, according to the ruling.

This ruling marks the first builder’s remedy case to be approved by a California court, creating a precedent for other projects and clearing the path for builder’s remedy in other jurisdictions. There are 67 builder’s remedy cases across California, according to data compiled by San Francisco-based non-profit Yes In My Back Yard.

“It’s very significant as the first official court ruling endorsing the builder’s remedy as a real penalty for Housing Element non-compliance,” says Dave Rand, an attorney at Rand Paster Nelson, calling it a “big boost for other builder’s remedy cases, such as in Beverly Hills.”

It has taken developers like Cedar Street Partners a lot of time, back-and-forth correspondence and financial resources to get to see their projects greenlighted in court, with many cases still pending. 

Governor Gavin Newsom and the state’s attorney general, Rob Bonta, who both commented on the case in December, were thrilled with the decision. Newsom used the opportunity to warn other jurisdictions about the consequences of non-compliance.

“Today’s favorable ruling should serve as a warning to other NIMBY jurisdictions that the state will hold every community accountable in planning for their fair share of housing,” he said in a statement on March 5.

Bonta said the California Department of Justice is “pleased that the court agrees with us that La Cañada Flintridge must follow state housing laws to facilitate affordable housing and alleviate our housing crisis.”

In the absence of codified law spelling out builder’s remedy application, the intervention of high-profile state officials played a critical role.

“Probably the biggest dynamic shift in favor of the builder’s remedy against the city in this case came when the governor and the Attorney General decided to intervene — that lended huge credibility and legal heft in favor of builder’s remedy,” Rand said, as reported earlier by The Real Deal.

“Onerous and long”

Given the time and financial resources involved, Hack called builder’s remedy a “tool of last resort,” given the time and complexity that comes with it. 

On the La Cañada Flintridge project, her firm received at least six letters from the same government office offering conflicting instructions and requests for more information. 

Hack sounded befuddled by the government’s resistance to her firm’s plan to develop their project in City of La Cañada Flintridge, through builder’s remedy or without.

“Our site in particular, there’s an unhoused individual taking up residence in it,” she says, referring to the 600 Foothill property site location in La Cañada. “I mean, it’s completely derelict.”

Leo Pustilnikov, a self-made immigrant and the son of Soviet Jewish refugees who fled present-day Ukraine in the late 1980s, has become another outspoken proponent of the builder’s remedy movement.

Pustilnikov and other developers who have chosen to take this route have to be prepared to sue cities and sometimes be locked in back-and-forth court battles for months or even years.

Many, including Hack and Pulstilnokov have taken on several high-profile lawsuits against local governments, including in other jurisdictions like Santa Monica and Beverly Hills. His lawsuits have become costly court battles that try to navigate California’s convoluted and at times conflicting statutes. 

“The court process is a very onerous and long process that adds to the timeframe,” Pustilnikov acknowledges. 

Most recently, the judge denied his builder’s remedy application for a 35-unit apartment project in Redondo Beach. In that case, the judge attempted to weigh what rules were more important — coastal commission regulations or the concept of builder’s remedy. 

Pustilnikov described the costs involved as “astronomical,” estimating the Redondo case will take around three years and cost around $2 million in total. 

While tens of applications have been filed under builder’s remedy, no new construction has been built to date in California under the provision.  That’s because it’s not exactly a shortcut.

“The process for builder’s remedy is just as bad [as alternatives],” Sonja Trauss, president of San Francisco-based non-profit Yes In My Back Yard, told TRD. “There’s nothing simple about the process, it’s all about what’s allowed. “ 

The history of builder’s remedy in California is still being written. It’s not a given that other jurisdictions with pending builder’s remedy cases will follow the final decision in the La Cañada case, heed the governor’s warnings or how long courts will take to  deliberate.

Other developers will be watching the City of La Cañada’so  response and likely appeal.

“The next big legal step is the court of appeal upholding and validating this decision,” Rand said.  “It’s not considered binding case law until an appellate court issues a published legal decision on appeal.”

For those championing builder’s remedy, the decisions on La Cañada mark a significant breakthrough.

“Since its addition to state housing law in 1990, there have been no homes actually approved and constructed as a result of the [builder’s remedy] provision,” the California Housing Defense Fund said in a statement on March 6. “This is all about to change.”

Read more

New York

Builder's justice: How a legal loophole could reshape California

Los Angeles

Santa Monica’s failed housing plan sparks building bonanza

Los Angeles

Beverly Hills remains vulnerable to builder’s remedy, state agency says

The post “Tool of last resort”: Inside California’s costly crusade to make builder’s remedy work appeared first on The Real Deal.

Bardas Investment Group and Bain Capital Real Estate won final approval to build a 510,300-square-foot entertainment complex in Hollywood.

The West Hollywood- and Boston-based developers got the go-ahead from the Los Angeles City Council to build Echelon Studios, a soundstage and office complex at 5601 Santa Monica Boulevard, Urbanize Los Angeles reported.

The 5-acre studio complex would replace a former Sears department store. When it was announced in 2021, the estimated cost was $450 million.

The six-story project would include 110,000 square feet of production studios and support facilities; 388,000 square feet of offices; 12,300 square feet of ground-floor restaurants; and an underground parking garage for 981 cars.

The production studios will include four 19,000-square-foot soundstages and one 15,000-square-foot flex stage. The offices would be built in two five-story towers joined with a bungalow village of executive and creative suites.

The 93-foot-tall project, designed by Rios of Leimert Park, includes glass offices resembling stacked clear Legos with terrace decks, according to renderings. House & Robertson, based in Culver City, share in the project design.

The L.A. City Council, in approving the project, nixed a requirement to dedicate land to widen streets that surround the project site. The requirement, made to a previous owner for a mixed-use project, was deemed obsolete.

After the developers break ground, construction of the Echelon Studios is expected to take three years. A timeline for the project was not disclosed.

Bardas and Bain Capital bought the property in early 2021 for $81.9 million.

The joint venture, formed in 2019, aims to build more than 1 million square feet of new film studios. 

Projects include a $600 million, 620,000-square-foot studio campus at the historic Television Center about a mile away from the project on Santa Monica Boulevard, at 6311 Romaine Street, in Hollywood. Bardas and Bain bought the 6.5-acre site in early 2022 for $135 million.

— Dana Bartholomew

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Los Angeles

Bardas and Bain Capital gain OK for $450M studio complex in Hollywood

Los Angeles

Bardas Investment plans production studio at former Sears

Los Angeles

Hollywood’s Television Center readies for $600M makeover

The post Bardas and Bain gain approval for $450M film studio in Hollywood appeared first on The Real Deal.

KBS Realty Advisors’ former chief auditor, Varun Aggarwal, has been sentenced to 33 months in prison for embezzlement, the U.S. Department of Justice announced Thursday. 

Aggarwal pleaded guilty in August to stealing $2.7 million from KBS and funneling the money into personal accounts. He had faced a maximum of 20 years in prison.

“[Aggarwal] was not driven to commit his crimes by need, desperation or the inability to legitimately earn a living,” prosecutors said in a sentencing memorandum. 

“Despite the advantages defendant enjoyed — including a first-rate education and a well-compensated professional career — [Aggarwal] chose to commit the underlying criminal conduct causing great losses and abusing his position of trust over a lengthy period of time,” prosecutors added. 

KBS and its affiliates operate several non-traded real estate investment trusts, plus other investment funds. The firm, founded in 1992 by Peter Bren and Charles Schreiber, has focused on investing in office buildings, plus some multifamily properties and land development sites. 

Aggarwal worked at the Newport Beach-based firm for 14 years and resigned from the company in January after KBS began looking into some of his invoices, according to the criminal complaint filed in November. 

From 2012 through 2022, Aggarwal signed off on KBS hiring six vendors — all companies controlled by his family and friends. Aggarwal then used these vendors to submit fake invoices for work never performed and KBS paid them, according to the plea agreement.

Under the agreement, Aggarwal had to pay $2.8 million in restitution, in addition to the prison time. 

KBS “proactively reimbursed the affected REITs for any amounts inappropriately charged to them, and for the costs the REITs incurred in the joint audit committees’ investigation,” KBS CEO Marc DeLuca said in a statement in November, adding that Aggarwal’s arrest was made as part of “multiple internal and external investigations.”

The post Former KBS auditor Varun Aggarwal sentenced to prison for embezzlement appeared first on The Real Deal.

Ethan Weaver will face off against progressive L.A. City Councilwoman Nithya Raman in November, based on results of the March 5 elections. On the most recent ballot count, Raman held a lead with 45.75 percent of the votes, compared to Weaver’s 42.09 percent.

Raman represents the 4th City Council district, which runs from Koreatown through the Hollywood Hills into North Hollywood. She was elected in 2020, after unseating incumbent David Ryu who had served on the council for five years.

The competitive nature of this district race highlights brewing pushback against Raman’s progressive policies and approach to homelessness, renters’ rights and environmental regulations, including criticism from the real estate industry.

Weaver, who lives in a studio apartment in Los Feliz with his fiancé, positioned himself as the realist candidate versus Raman’s more idealistic philosophy and approach to the city’s challenges. He currently works as a deputy city attorney in Los Angeles.

“Problems were ignored if they didn’t advance activists’ ideology,” he told the Los Angeles Daily News’ editorial board that endorsed his candidacy, describing a change in relationship with City Hall after Raman assumed the job. “Running a city is not an ideological job. I don’t have room for ideology, only reality.”

In addition to Los Angeles Daily News, Weaver has backing from several police associations, including Los Angeles Police Protective League, Los Angeles Association of Airport Police Officers and Los Angeles School Police Management Association.

His other endorsers consist of a number of public safety unions, including United Firefighters of Los Angeles City, Peace Officers Research Association of California and Los Angeles County Professional Peace Officers Association.

When Raman voted against a pay raise for police, it didn’t sit well with the police union.

Craig Lally, president of the Police Protective League, told Los Angeles Times that Raman’s views on homeless encampments near schools were “out of touch” with voters and said LAPD salary increases were important for recruitment and retention.

Raman has backed the Measure ULA property transfer tax, a voter-approved measure unpopular with a broad swath of real estate agents, business groups and landlords.

Raman, who has a background in urban planning, has advocated for renters’ rights, passing the “single largest expansion of renters’ rights in this city in close to half a century” according to her estimate. They include “just cause” eviction protection and government-paid legal counsel for tenants; both were opposed by the landlord advocacy group Greater Los Angeles Apartment Association.

“We established just cause eviction protections, a rental debt eviction threshold, and mandated relocation assistance — and kept so many Angelenos housed,” Raman said in a post on social media platform X on March 5.

Douglas Emmett, a Santa Monica-based real estate investment trust, is keen to unseat Raman: It donated $400,000 to the Los Angeles Police Protective League, according to Times.

The police unions, in addition to commercial and residential landlords and individuals, contributed a total of $1.35 million for independent expenditures supporting Weaver’s campaign, according to a Los Angeles Times report on March 5. 

Weaver’s individual supporters in the real estate industry include Victor Coleman, CEO of Hudson Pacific Properties ($500); Jennifer Paquette, vice president of asset management at Kilroy Realty ($100); and Josh Trifunovic, director of multifamily operations at Dynamic Real Estate Partners ($900), according to public records. 

“No L.A. incumbent has ever been targeted by as much PAC spending as I have in this race,” Raman said in a post on X on March 5.

Raman’s efforts and policies had ramifications on the real estate industry beyond her district. She worked with Mayor Karen Bass to pass an ordinance requiring new buildings to be all-electric, in an effort to make Los Angeles the “largest American city to make all future buildings carbon-free.”

Weaver’s stated priorities include “building more housing” in addition to addressing the homelessness crisis and public safety. The message seems to find resonance with landlords, developers and brokers.

“Our housing crisis in Los Angeles is out of control — but City Hall’s red tape and government roadblocks have stopped us from building new homes,” according to Weaver’s campaign website. “On the City Council, Ethan will fight to build more housing and use innovative solutions like repurposing unused commercial space to solve our housing crisis.”

How to deal with encampments is a core issue on which Raman and Weaver disagree, with Raman seeking to find housing for the homeless and even converting a hotel into a shelter. While Weaver prioritizes public safety, LAist reported.

Weaver told the Los Angeles Times he has built a coalition of organized labor and business leaders, looking to give voice to those ignored by the City Hall.

“I’m running to give them a voice again on everything from public safety to homelessness to development,” he said.

Weaver’s campaign did not return a request for comment.

The post Meet Ethan Weaver, challenger for Nithya Raman’s LA City Council seat appeared first on The Real Deal.

While the number of ED1 projects is poised to accelerate this year, a growing number of developers and advocates question the math behind it.

Soon after assuming office, L.A. Mayor Karen Bass issued Executive Directive 1 in December 2022, aiming to streamline the approval process for affordable housing by exempting it from lengthy environmental reviews — and trim the approval process to less than 60 days.

More than a year after ED1 was issued, there is still growing support for it from affordable housing advocates. But along with enthusiasm, there are concerns that not all of these projects are going to pan out and make financial sense for developers. 

“We did a huge deep dive and we could not make sense of the numbers,” Jared Goldstein, managing partner at Canfield Development, speaking at the Bisnow Annual Multifamily Conference in Los Angeles on Feb. 29. “As they stand now, I would just be very shocked if they move forward.”

Adrian Berger, managing director for acquisitions at Cypress Equity Investments, also cited reliance on traditional financing and lack of parking as obstacles to ED1-based projects.

“When you actually underwrite them with real numbers, then these things don’t pencil,” Berger said at the same event.

Popular program

This hasn’t deterred new ED1 applicants, with recent data showing that the number of ED1 project applications has accelerated in 2024.

There were a total of 30 applications, according to data compiled by ATC Research, a Los Angeles-based real estate research firm, and shared with TRD.

January alone represents 14.5 percent of the total ED1 applications to date.

“It has been a tremendous success,” said Scott Epstein of Abundant Housing LA, citing 16,000 units in the pipeline. “Not all of these are fully entitled, but that’s sort of unprecedented when it comes to affordable housing entitlements.”

Scott noted the 60-day window stipulated in the order from the application date to full entitlement as one of the draws, as well as alignment with the statewide density bonus program because they’re 100 percent affordable housing projects.

JZA Architecture, a Los Angeles-based firm, has nearly doubled in size due to an inflow of ED1 projects, with a payroll of 19 people now compared to 10 a year ago. The executive directive projects now account for 95 percent of the firm’s work.

“There has been a massive transition to affordable housing — people are really seeing that the way to cut out months of red tape and just be able to expedite their projects is far more valuable to them,” said Jeff Zbikowski, founder of JZA Architecture.

He notes that a lot of the ED1 projects he’s aware of are located in South L.A.

“What we’re starting to see now is projects pop in nicer areas on the Westside or in the Valley and Reseda, some of these higher resource areas, where they’re more centered around hedging against nicer areas — providing mixed-income projects within those areas that are always going to be occupied.”

While ED1 has generated plenty of interest and early movers, it isn’t codified yet. Its long-term future in Los Angeles is uncertain.

Maximum rent models

Goldstein’s firm spent weeks researching ED1, but ultimately decided it wasn’t for them. 

“The program is designed around rents on an affordable housing covenant that would be attached to your project,” he said. “And those rents are lower than Section 8 rent you could potentially collect if your building had Section 8 tenants.”

Without having experience with affordable housing, Canfield Development management felt it was an aggressive assumption to make that every single tenant would have a voucher.

“So the projects that exist are taking pretty aggressive stances on the rents they’ll achieve,” he said. “The rents that they’re inputting in their financial models are often the maximum Section 8 rents. That rent is greater than what the unit would lease for, in many cases, as even a market-rate unit with no restrictions.”

For some of these projects to go forward and to take advantage of tax abatements, a partnership with a nonprofit may be necessary.

AIDs Healthcare Foundation, for example, is using ED1 to develop a 216-unit homeless housing project in Skid Row at 431 East 7th Street.

“There are a lot of nonprofit firms that are very skilled at this, who know how to get these types of transactions done,” Goldstein told TRD. “So there will be a bit of a learning curve figuring out what the skilled nonprofits know how to execute and how to bring them into effective partnerships together.”

The post ED1 projects multiply in LA as developers question the math appeared first on The Real Deal.

Gov. Gavin Newsom has tipped the scales to help win approval for a $2 billion housing, hotel and retail project in Downtown Los Angeles.

The governor issued an order to shorten the window for any environmental lawsuits against the 1,500-unit project by Denver-based Continuum Partners at Fourth Street and Central Avenue in Skid Row, next to the Arts District, the Los Angeles Times reported.

“For decades, we’ve let red tape stand in the way of these kinds of critical housing projects — and the consequences are in plain view all around us,” Newsom said in a statement. “Now we’re using California’s infrastructure law to build more housing, faster.”

The 7.6-acre project, dubbed Fourth & Central, would include 1,500 homes, 410,000 square feet of offices, plus a 68-room hotel along with shops and restaurants. An environmental review was launched in early 2022.

The development, announced in 2021, would raze a 130-year-old cold storage warehouse next to the Arts District and Little Tokyo to make way for 10 buildings containing 2.3 million square feet, including a 44-story residential skyscraper, with connecting walkways and parks.

Two buildings, including the highrise, were designed by Ghanaian-British architect David Adjaye, lead designer of the National Museum of African American History & Culture in Washington, D.C.

Continuum aims to construct 572 condominiums and 949 apartments, with at least 214 units set aside as affordable housing for low-income households.

The project requires approval from the L.A. City Council. If approved this year, the developer is expected to break ground next year and complete the project in five to seven years.

This week, Continuum announced an agreement with the Los Angeles/Orange Counties Building and Construction Trades Council to build Fourth & Central with all union labor.

Newsom’s decision aims to shave years off the construction timeline by fast-tracking a judicial decision in any litigation filed against the project under state environmental laws.

The expedited litigation timeline does not exempt the project from analysis under the California Environmental Quality Act, or CEQA, the 1970 law that requires developers to identify and, if possible, eliminate negative environmental effects, according to the Times.

It would shorten the length of any potential lawsuit against the project, however.

Litigation under CEQA has long been blamed for killing or dragging out construction, especially for large developments. Newsome’s action aims to wrap up litigation within nine months instead of what’s typically three to five years.

Edgar Khalatian, an attorney with the firm Mayer Brown who represents Continuum, said the rules will provide Continuum cost savings and development certainty while not diminishing the rights of possible opponents.

“There’s really nothing negative for anybody except for a petitioner, and even for a petitioner it’s just their lawyer has to work weekends,” Khalatian told the Times.

Challenges to the project, environmental or otherwise, may come from residents concerned about a gentrification of Skid Row and its potential to displace low-income residents. Groups from Little Tokyo are concerned it would reduce the neighborhood’s role as the historic center of the region’s Japanese community. 

— Dana Bartholomew

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Continuum in enviro review on $2B plan for DTLA

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Continuum Partners plans $2B megaproject to transform Arts District

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LA’s infamous Cecil Hotel goes up for sale

The post Gavin Newsom trims legal red tape for $2B mega-project in DTLA appeared first on The Real Deal.

Plans by Australian developers to build a 40-story housing tower inspired by giant redwood trees in Downtown Los Angeles have toppled with a resounding thud.

The proposal by the Australia-based Crown Group, Magnus Property Pte and ASRI to build the leafy highrise at 1111 South Hill Street was booted by the Los Angeles Planning Department because of a lack of activity and communication, Urbanize Los Angeles reported.

The Sky Trees Project, drawn by Sydney-based Koichi Takada Architects, had won global attention for its redwoods-inspired design. 

Once slated to soar 70 stories in two twin towers, the project was whittled down in February 2022 to a single 40-story building with 319 apartments or condominiums, plus 160 short-term rental units and 3,400 square feet of ground-floor restaurants.

The tower was to include a series of sloping open-air decks rising to its upper levels packed with trees — a verdant spire in a skyline of steel and glass.

In addition to its leafy exterior topped by a gothic arch, the building was to have a swooping canopy over the sidewalk inspired by Marilyn Monroe’s windswept skirt in “The Seven Year Itch.”

The project cancellation comes as high-rise construction across Los Angeles County has slowed during a tide of rising interest rates.

While dozens of towers once rose simultaneously over Downtown alone, just three high-rise developments are now under construction in the central city, according to Urbanize.

Although the redwood-inspired tower may not see the light of day, other proposed projects along the 11th Street corridor are active.

They include two pending entitlement applications from Mack Real Estate Group and an approved project from Crescent Heights which would bring a trio of high-rise buildings to the intersection of 11th and Olive streets.

— Dana Bartholomew

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Los Angeles

DTLA ‘redwoods’ cut down to 40 stories

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Architect reveals 70-story Redwoods-inspired skyscraper for DTLA

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Tishbees wins approval for hotel-apartment complex in DTLA

The post Plans for redwood-inspired tower in DTLA cut down by planners appeared first on The Real Deal.

A two-decade-long court battle over a vast Los Angeles real estate fortune within the Jogani family ended this week with a payout verdict valued at $10 billion.

An L.A. jury added $3 billion in punitive damages to a multi-billion dollar award in the legal bloodbath between five brothers from India, who’d amassed diamonds and 17,000 apartments in the San Fernando Valley, Bloomberg and Dailymail.com reported.

The trial, stemming from a 2003 lawsuit, was based on claims that Haresh Jogani had breached a longstanding oral agreement and bilked his brothers out of their share in the wealth. The lawsuit has cycled through 18 appeals, armies of lawyers and five L.A. Superior Court judges.

On Thursday, jurors ordered Haresh Jogani to pay his brother Shashikant $1.5 billion, on top of $1.8 billion awarded last week, according to representatives of the plaintiffs. 

Haresh Jogani was also ordered to pay two other brothers, Rajesh and Chetan, a combined $1.5 billion in punitive damages, after an initial award of $759 million.

Together with last week’s initial award of $2.6 billion, the verdict appears to be among the largest of the decade, according to Bloomberg.

The jury also ordered Haresh last week to turn over 76 percent of the portfolio of 17,000 apartments, including a portion to another brother, Shailesh. 

Attorneys for the plaintiffs estimated the real estate awarded to their clients is worth $4.5 billion — which would bring the total sum of the verdict to $10 billion.

“The family is elated,” attorney Peter Ross, who represents Chetan and Rajesh Jogani, said in a statement. “They feel the jurors really saw them and heard their stories.”

Attorneys for Haresh Jogani, however, said the battle isn’t over.

“The final chapter is far from written,” Rick Richmond, an attorney for Haresh Jogani, said in a statement. “In addition to eventual appellate review, there are several pending and anticipated trial and post-trial motions that may dramatically alter this verdict.” 

John Lee, another attorney representing Haresh, told DailyMail.com the judge didn’t allow his client to provide an explanation when he testified earlier this week that his vast real estate empire was worth “zero to negative.” 

The Jogani family, natives of Gujarat, India, built a fortune in the global diamond trade, setting up offices in Europe, Africa, the Middle East and North America. 

In 1969, a 22-year-old Shashikant “Shashi” Jogani moved to Los Angeles, where he set up a solo firm in the gem business and began to build a property portfolio, according to a complaint he filed in 2003. 

He bought his first apartment property in 1979 for $500,000. By 1994, he owned more than 24 properties across Van Nuys, North Hollywood, San Fernando, Sylmar, Northridge and Canoga Park, the Los Angeles Times reported at the time. 

Then came the savings and loan crisis, a nationwide recession and the 1993 Northridge earthquake — Shashikant ended up in financial trouble and needed money. 

“Like other real property owners, (the) plaintiff was forced to address actual and potential defaults and foreclosures,” Shashikant said in his complaint against his brother, Haresh Jogani. 

In 1995, Shashikant and Haresh came to an oral agreement — Haresh and their three other brothers would enter into a joint venture with Shashikant to help support the properties, now controlled by companies based in Los Angeles, Nevada and the British Virgin Islands.

Exactly how much each brother gets depends partly on swings in the real estate market. Apartment prices have fallen from their 2022 peak after higher interest rates raised borrowing costs and cut into property values, according to Bloomberg.

It also depends whether the brothers can collect. 

Judge Susan Bryant-Deason has ordered Haresh Jogani to lock down his assets, according to Steve Friedman, an attorney for Shashikant Jogani, but Haresh didn’t appear in court Thursday, a departure from his presence during most of the five-month trial.

“We were all wondering: Where was Haresh Jogani?” Friedman said.

When asked by the judge if his client was still in the country, Richmond, his attorney, said yes, Friedman said.

— Dana Bartholomew

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The post LA jury adds $3B in punitive damages in Jogani family suit appeared first on The Real Deal.

Governor Gavin Newsom’s Proposition 1, a mental health bond measure that would provide $2 billion to build housing that was presented to voters on the California ballot last week, is leading by a whisker.

The bond measure, which totals $6.38 billion, was leading by 50.3 percent on Sunday night, with 2.7 million votes, according to the California Secretary of State.

The final tally isn’t expected for days or weeks, the Los Angeles Daily News reported.

Newsom had trumpeted the measure as a way to get “people off the streets, out of tents and into treatment.” 

Prop. 1 would direct $4.4 billion to fund 10,000 mental health beds and $2 billion for homeless housing projects, half of which would be reserved for veterans with mental illness or issues with drugs and alcohol.

The measure would also require the state’s 58 counties to spend 30 percent of Mental Health Services Act tax dollars on housing. Last year, the mental health revenue was $1 billion.

It would require the state’s counties to spend half of that money on the chronically homeless or people living in tents.

The governor said the initiative would create 11,000 new homes through new housing construction or by converting hotels, motels and other buildings into homes.  

Over a 30-year span, the nearly $6.4 billion bond would cost $9.3 billion, including interest, according to a state Legislative Analyst Office analysis. 

California is now home to nearly a third of the nation’s homeless residents. The state’s homeless population grew 6 percent last year to more than 181,000 people, the largest estimate of any state.

The Yes on Prop 1 campaign raised nearly $21 million, and included backing by the National Alliance on Mental Illness California, California Teachers Association and California Chamber of Commerce.

In comparison, the “No on Prop. 1” campaign raised very little, and was led by mental health advocates such as Disability Rights California, who fear that changing funding priorities for the Mental Health Services Act will result in service cuts. They also fear new treatment beds will compel people into involuntary treatment.

Other opponents, such as the Howard Jarvis Taxpayers Association, object to the high amount of government spending.

Barring a major shift in voting patterns in the ballots yet to count, it is likely — but not certain — the proposition will pass.

— Dana Bartholomew

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The post California prop measure to provide $2B for housing leading by a nose appeared first on The Real Deal.

CIM Group has sold 888 at Grand Hope Park, a 34-story luxury residential tower in Downtown Los Angeles, for $186 million, The Real Deal has learned. 

The deal comes eight months after the company listed the property with an asking price of $236 million. At that time, the property was 94 percent occupied. The initial asking price was 40 percent lower than replacement cost, according to a previous report from GlobeSt. If accurate, that would make the final purchase price less than 32 percent of replacement cost.

The buyer is Irvine-based firm FPA Multifamily. The company is funding the purchase with a $105 million loan from Iowa-based Athene Annuity and Life Company. The purchase closed on March 5, according to a deed filed in Los Angeles County’s Registrar’s Office. 

FPA recently purchased a two-property, 409-unit apartment portfolio in Ventura County. The firm paid $153 million for the Oakview Apartment Homes, a 242-unit property in Westlake Village, and The Biltmore at Thousand Oaks, a 167-unit residential complex in Thousand Oaks. 

L.A.-based CIM finished building the 525-unit Grand Hope Park complex, located at 888 South Hope Street, in 2018. Units in the complex range from 575 to 1,533 square feet. Monthly rents vary from $2,547 to $7,496, according to a listing on Apartments.com. The property has amenities such as a 30,000-square-foot rooftop deck, an outdoor pool and lounge and barbecue areas.  

CIM Group is currently building what may become the tallest building in West Hollywood. Its project at 1000 North La Brea Avenue, which previously had a concrete plant for Cemex, may be converted into a 34-story, 514-unit apartment tower. The firm also is proposing to build a four-story, 63,700-square-foot office building in Culver City. 

The post CIM sells 888 at Grand Hope Park complex in Downtown LA for $186M  appeared first on The Real Deal.

City Market of Los Angeles has moved forward with approved plans to turn three blocks in Downtown L.A.’s Fashion District into an urban-retail village with nearly 1,000 homes.

The Downtown-based former wholesale produce retailer has secured a revised development agreement with the city to build City Market Los Angeles between East 9th, East 11th, San Pedro and San Julian streets, Urbanize Los Angeles reported. 

The 1.7 million-square-foot development, approved in 2018, would replace a more than century-old produce market that closed in 2009, including 91,700-square feet of commercial buildings, according to an environmental review.

Plans for the project, in the works since 2013, include 945 homes, a 210-room hotel, a 312,000-square-foot school or office campus, 272,000 square feet of offices and 224,900 square feet of shops and restaurants, including a movie theater with 744 seats, according to its website.

City Market, which would take two decades to complete, would feature 455-foot-tall buildings of up to 38 stories, divided by courtyards and paseos across 10 acres.

The revised development agreement, approved by the City Council, calls for 94 affordable apartments, including 47 for moderate-income families and 47 for low-income households.

The revised development agreement was borne out of the city’s widespread public corruption scandal.

Although the City Council had approved the zone change and general plan amendment required for the project, the project was set back in 2020 when then-Mayor Eric Garcetti vetoed a prior version of the development agreement, according to Urbanize.

Garcetti had objected to changes to the agreement by former City Councilman Jose Huizar, since sentenced to prison for racketeering and tax evasion charges tied to Downtown developments. 

Huizar’s plan would have redirected developer payments intended for citywide funds into the Council District 14 public benefit trust fund.

The revised agreement, introduced by Councilman Kevin de León, retains funding for initiatives in the 14th Council District, including $1.9 million for homeless health services, $1.9 million for street improvements, $1.9 million for public transportation and a $1 million contribution to the Parks Department for Pershing Square.

But instead of a $3.9 million payment into the Council District 14 affordable housing trust fund, the City Market project would set aside 10 percent of the 945 apartments as on-site affordable housing, for rent below market rate.

A timeline for City Market, estimated to cost $1 billion in 2018, is unknown. 

When the project was announced in 2013, it was expected to be completed in phases over two decades. Now 11 years later, the project has been granted a 20-year period to complete the terms of the development agreement.

The City Market of Los Angeles was founded in 1909 as the central produce distribution market for Los Angeles. The real estate investment trust now owns 17 buildings on more than 12 acres in Downtown, according to its website. 

In 2017, it opened City Market South, with offices, shops and restaurants in 75,000 square feet of converted warehouses on 2.5 acres of the original produce market at 1100 San Julian Street.

— Dana Bartholomew

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FPA Multifamily has purchased two vintage apartment complexes in east Ventura County for $153 million.

The San Francisco-based investor bought the 242-unit Oakview Apartment Homes at 645 Hampshire Road in Westlake Village, and the 167-unit Biltmore at Thousand Oaks at 555 Laurie Lane in Thousand Oaks, the Los Angeles Business Journal reported. 

The seller of the portfolio was not disclosed. The price for a combined 407 apartments works out to $374,083 per unit.

The previous owner of the Oakview was Wilshire Equities, based in Sawtelle, according to a San Francisco Chronicle property database. The owner of the Biltmore was Biltmore Associates, based at the same address.  

Biltmore Associates is led by Avi Peretz, CEO of Wood River, according to state business records. 

Brokers Kevin Green, Joseph Grabiec and Gregory Harris of Institutional Property Advisors, a unit of Calabasas-based Marcus & Millichap, represented the seller and facilitated FPA Multifamily.

“This marks the fourth deal in Ventura Country our team has closed with FPA Multifamily since December, totaling $325 million across all properties,” Green, executive managing director of investments at IPA, said in a statement.

Oakview Apartment Homes, built in 1970, is a short drive to Westlake Plaza and North Ranch Shopping Center. 

The Biltmore at Thousand Oaks, built in 1965, is a short stroll to Whole Foods Market, Janss Marketplace shopping mall and local boutiques along Moorpark Road. 

Both properties have upgraded clubhouses and leasing centers, as well as two resort-style pools, spas and outdoor lounge areas with barbecues. Both properties are well-maintained, and have not had a facelift for more than half a century, Grabiec said.

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“Collectively, the portfolio represents nearly 10 percent of the market-rate apartment housing stock in Thousand Oaks and Westlake Village,” he said.

FPA Multifamily, founded in 1985, has sunk $24 billion in buying 770 apartment buildings with 152,500 units across the U.S., with offices in Atlanta, Chicago, Denver, Houston, Irvine, and Washington, D.C., according to its website. 

FPA Multifamily just bought a 34-story, 525-unit luxury tower at 888 South Hope Street in Downtown Los Angeles for $186 million, or $354,286 per unit.

— Dana Bartholomew

The post FPA Multifamily pays $153M for Ventura County apartment portfolio appeared first on The Real Deal.

Two years ago, sheriff’s deputies found 96-year-old Violet Evelyn Alberts strangled inside her hillside home in Montecito.

Last week, the Santa Barbara County Sheriff’s Department announced the arrest of three people charged in a murder-for-hire scheme and reverse-mortgage scam to seize her nearly 4-acre estate at 909 Park Lane, the Santa Barbara Independent and CNN reported. 

Alberts was found dead in her bed by her caretaker inside her Montecito home on May 27, 2022, with a window next to her back door shattered. The ingredients for cookies she’d planned to bake for her upcoming birthday lay on a nearby table.

An autopsy found she’d died by asphyxiation and her death was ruled a homicide, according to Sheriff Bill Brown.

The case was shrouded in mystery as investigators pieced together “a tangled, evil web of financial exploitation against the victim,” Brown said in a news conference last week. 

The scheme began in 2020 when the widow, who was in “a financially distressful situation,” was approached by Pauline Macareno, 48, of L.A.’s Porter Ranch, offering to sell her a reverse mortgage on her upscale estate, Brown said.

Macareno allegedly orchestrated a series of transactions that included forging documents and establishing fraudulent entities to illegally gain control over Alberts’ property, valued between $4 million and $11 million at the time of her murder. 

Detectives then found evidence Alberts became the target of a murder-for-hire scheme, the sheriff said.

“Let me put it this way,” Brown said at the press conference. “In the eyes of Ms. Macareno, Miss Alberts was living too long.”

Three days before she was found dead, 41-year-old Ricardo MartinDelCampo of Los Angeles and 33-year-old Henry Rostomyan of Tujunga had gone on “a scouting trip” to Alberts’s home, according to the sheriff’s office.

Rostomyan was arrested last month and MartinDelCampo was arrested March 5. Both are now in the Santa Barbara County Jail without bail on charges of murder and conspiracy to murder Alberts, according to the sheriff’s office.

A third man, 58-year-old Harry Basmadjian of Van Nuys, was arrested in January for his alleged involvement in the conspiracy as he was held in federal custody in Los Angeles on an unrelated charge, according to a sheriff’s news release.

The investigation remains ongoing. CNN, which reached out to the Santa Barbara County Public Defender’s Office, couldn’t determine if any of the suspects had legal representation. 

Macareno was arrested in June 2022 for fraud, elder abuse, and manipulation of legal documents, and has since been sentenced to six years in state prison for fraud related to Alberts’ case, according to the sheriff’s office.

She now also faces additional, unspecified charges, the sheriff said.

Alberts was a cherished figure in Montecito, where she’d moved from Beverly Hills after the death of her husband, David Alberts, in 1993, Brown said. But she was in a poor financial situation after she ran out of her savings and had been relying solely on Social Security. 

Macareno “essentially took advantage of the victim,” Brown said, calling it a “particularly heinous case.”

“The victim was in a financially distressful situation where she had essentially aged out of her savings and she basically had a very valuable home that she lived in, but she had run out of money,” the sheriff said.

— Dana Bartholomew

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Richard Weintraub, CEO of Weintraub Real Estate Group, plans to build a massive hotel in Malibu, according to the plans submitted to the City of Malibu in January. The developer has worked for more than a decade on various plans for the prime site overlooking the Pacific Ocean.

The recent plans, reviewed by TRD, span 181,000 square feet on a lot of 545,000 square feet of total development area. The proposed hotel resort includes two restaurants, health club and spa, exterior pool, meditation room, “independent hotel suites” spanning 98,000 square feet, and a multilevel parking structure.

In 2022, Weintraub’s Green Acres LLC secured a $12.5 million loan on the property from Oakhurst Opportunity Lending Fund I and RDG Lender Services, according to property records.

The development site consists of three parcels at 4000 Malibu Canyon Road. It lies near the corner with Pacific Coast Highway across the street from Pepperdine University. Property records indicate some of the land previously belonged to the Adamson family which donated the 138 acres for the campus of Pepperdine College in 1968.

Development rumors swirled for years around this plot of land. After Weintraub tried for years to win approval for a hotel without success, he switched to a proposal for a memorial park or a high-end cemetery where the “guests check in, but they can’t check out,” as Malibu’s Mayor Skylar Peak told the Los Angeles Times in 2014. This high-tech graveyard that could be navigated with GPS was scheduled to open in 2018 but never panned out.

Weintraub did not respond to a request for comment.

While he’s best known for high-end residential projects in Malibu, Weintraub’s development careers includes “an Inland Empire mall overhaul, a historic cathedral renovation in Downtown L.A. and a Frank Lloyd Wright home,” earning him a moniker as a “renaissance man” according to broker Aaron Kirman with AKG Christie’s International Real Estate.

Weintraub rented out his La Villa Contenta estate to Beyoncé and Jay-Z and later sold it for $50 million to Behdad Eghbali, a founding partner at Santa Monica-based Clearlake Capital Group, in 2018.

Weintraub’s company has already completed one luxury hotel on the other side of the Santa Monica Mountains from Malibu. Cambria Hotel Calabasas, at 26400 Rondell Street near the corner of Las Virgenes Canyon Road and the southbound exit from the 101 Freeway, has 125 rooms and opened in 2022.

Also, Weintraub was not the first to try to build a hotel on the Malibu Canyon site. Another developer first proposed a plan in 1984, according to a report by Curbed LA. It was put on ice due to the city’s development moratorium in 1991.

Nearly 40 years later, Malibu may finally have its new hotel. 

The post Richard Weintraub plans to build Malibu Canyon resort — again appeared first on The Real Deal.

J+R Group wants to convert an eight-story office building in Irvine into 76 homes.

The locally based developer led by Morgan Zhang has filed plans to turn part of the 178,000-square-foot office building into apartments at 1901 Main Street, the Orange County Business Journal reported.

The proposal would turn “several floors” of the building to residential units near MacArthur Boulevard and Main Street, a few blocks from John Wayne Airport.

The office property, which includes a five-story parking garage and a parking lot, covers nearly 5 acres. Construction of a separate apartment complex next to the office building is also an option.

A timeline for the office-to-home conversion or apartment building were not disclosed.

J+R bought the fully leased office property in 2016 for $66 million, or $371 per square foot — among the biggest office deals in OC that year.

The building, built in 2002 and later renovated, is now 80 percent leased to such tenants as J+R, on the ground floor, Morgan Stanley, BSH Home Appliances and Synaptics, a semiconductor firm. The parking garage is used as storage for new Tesla cars.

The OC office market contains 104 million square feet and ended last year with a vacancy of 17.3 percent, according to Voit. The Irvine airport market has 24 million square feet and a vacancy of 17 percent, with Class A buildings containing the county’s largest number of high-rise offices at 22 percent.

At the same time, the vacancy of apartments across OC is less than 5 percent, according to RentCafe — with few office-to-home conversions.

In 2022, Calabasas-based Alliant Strategic Development turned a 10-story office building used by the Social Security Administration on North Main Street in Downtown Santa Ana into 148 apartments. Rents for a one-bedroom unit now start at around $2,200.

J+R Group, founded in 2000 in the Pacific Northwest, recently helped develop Collage, a two-story, 16,000-square-foot collection of restaurants near Bloomingdale’s at South Coast Plaza in Santa Ana. 

The firm, which has ties to China, has developed 19 commercial properties containing 464,000 square feet on 14 acres, according to its website. 

— Dana Bartholomew

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Josh Flagg, one of the most recognizable luxury brokers in Los Angeles as a long-time star of Bravo’s “Million Dollar Listing” series, is moving from Douglas Elliman to Compass, the company announced Tuesday. He will work in Compass’ Beverly Hills office.

Flagg made more than $3 billion in residential real estate sales in the past decade, according to his website. Last summer he brokered the sale of Rihanna’s $10.3 million Beverly Hills home to UTA agent Tracy Jacobs. He also represented the sellers in StubHub founder Eric Baker’s purchase of 1001 North Roxbury Drive in Beverly Hills for $40 million in 2020.

He joined Douglas Elliman in 2021. Upon his exit, Flagg said his colleagues at Elliman were “like family” and he loved the agency, but added “I am finally ready to embark on my next venture.”

As for the timing of his move, “the market is really not down, there’s just not a lot of inventory,” he said in a statement.

Flagg began his career in luxury real estate after graduating from Beverly Hills High School in 2004, according to his autobiography “Million Dollar Agent: Brokering the Dream.”

He was a member of the original cast for reality TV show “Million Dollar Listing,” which premiered in 2006.

His clients include A-list celebrities and luxury brands, including the late actor Matthew Perry, Universal Music Group CEO Lucian Grange, the Getty family, the DeBartolo family, Van Cleef & Arpels and Prince Abdullah of Saudi Arabia. 

Flagg brings more than $400 million in listings to Compass, including a $28.9 million Beverly Hills property at 9463 Sunset Boulevard; Pasadena’s most expensive home at 2 Oak Knoll Terrace, priced at $32 million; and Judy Garland’s former home in Bel-Air at 1231 Stone Canyon Road, with an $11.5 million price tag.

Last year, he launched a real estate media platform called Estate Media, which offers a combination of entertainment and education content and is aimed at real estate professionals.

Compass, a New York-based publicly listed brokerage, has more than 1,400 agents in the Los Angeles market.

The brokerage posted a $320 million loss last year and in the fourth quarter reported negative cash flows for the first time in six months. Its headcount growth has slowed as well. Compass grew its average total agent count by 1 percent in 2023 compared to 22 percent the year before. 

The post “Million Dollar Listing” star agent Josh Flagg jumps to Compass appeared first on The Real Deal.

Uncommon Developers has added an affordable apartment complex in Northridge to its growing list of multifamily projects across Los Angeles.

The Chatsworth-based builder has filed plans to construct a 255-unit apartment building at 17829 West Halsted Street, just east of Cal State Northridge, Urbanize Los Angeles reported. It would replace a vacant lot.

Plans call for the seven-story building, dubbed Uncommon Halsted, to include studio, one- and two-bedroom apartments above parking for 125 cars.

The developer has employed density bonus incentives to permit a larger building than allowed by local zoning rules, as well as waivers from other development standards.

Except for a market-rate manager’s unit, all of the apartments are to be set aside as affordable for low- and moderate-income households.

The contemporary white apartment building, designed by Culver City-based JZA Architecture, comes without eaves or balconies, and includes orange outdoor stairways and trim outside a parking garage on its first and second floors, according to a rendering. It would include a double-height lobby and a recreation room.

A timeline for the project was not disclosed.

Uncommon Developers, known for building the mixed-use headquarters campus of MGA Entertainment in Chatsworth, has proposed a slew of apartment buildings across Los Angeles.

Its co-founders are Jason Larian, son of billionaire toymaker Isaac Larian, CEO of MGA Entertainment, and Ryan Hekmat, who is married to Isaac Larian’s daughter. The offices of Uncommon Developers are inside the MGA headquarters building.

Uncommon projects include apartments in North Hills, Inglewood, Hollywood, West Hollywood and Van Nuys. 

In January, the nonprofit Yes In My Back Yard sued L.A. after the City Council refused to allow Uncommon Developers to use a fast-track affordable housing option to build a seven-story, 360-unit complex at 8217 North Winnetka Avenue in the San Fernando Valley.

— Dana Bartholomew

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Wanted: Builder to redevelop a 17-acre parking lot and slice of Long Beach Airport for aeronautical use.

The City of Long Beach has issued a request for proposals to develop the lot and airfield at East Wardlow Road and Globemaster Way, the Long Beach Business Journal reported.

For decades, the 11-acre parking lot on the east side of the airport has been leased by Boeing and Mercedes-Benz for parking. The airfield portion includes 6 acres between Globemaster Way and Taxiway D, next to an airport runway.

Aerospace is the fastest-growing business sector in a city long known for its aerospace roots.

“All the stars are aligned — no pun intended — and great things are gonna happen,” Bo Martinez, economic development director for Long Beach, told the Business Journal. 

The property, known as the Wardlow Parcel, sits next to 90 acres of land previously owned by Boeing, where it manufactured the C-17 military cargo plane and other aircraft.

The city will accept proposals from aerospace companies, which will be evaluated based on a list of criteria, including “economic and workforce development benefits,” airport spokeswoman Kate Kuykendall told the newspaper in an email.

“The objective … is to select a qualified developer, through a lease agreement, that aligns with the airport’s vision of enhancing the aeronautical services throughout the region,” Kuykendall said, adding that a proposal could incorporate non-aeronautical use subject to airport staff review and approval.

Airport staff expects a proposal, due April 2, to go before the City Council this fall, adding to an aviation complex that generates $8.6 billion in economic impact and supports 46,000 jobs, according to the RFP.

Long Beach has been an aerospace hub for a century, with Long Beach Airport founded 100 years ago as the first municipally owned airfield in Southern California. Douglas Aircraft, based in the city, played a critical role in plane production during World War II.

The company, which became McDonnell Douglas, merged with Boeing in 1997, whose final C-17 Globemaster III came off the line in November 2015. At the same time, Virgin Galactic — which became the now-defunct Virgin Orbit — moved into Douglas Park.

In 2021, Australia-based Goodman Group leased its largest hangar to Relativity Space, a satellite launch provider developing the world’s first fully 3D-printed rocket.

Since then, a host of space and aviation companies have moved to Long Beach, including Rocket Lab, SpinLaunch and Relativity Space. In the last year, the sector has exploded with JetZero, Vast, Aevum, ExLabs, AIBOT and Auriga, among others that call Long Beach home, according to the Business Journal.

— Dana Bartholomew

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