Stall: 3 big L.A.-area projects in trouble (Updated)
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This has not been a good week for big real estate development projects. Three very big ones have failed, stalled or sputtered. Two words come to mind: credit crunch.
In Pasadena, from the Star-News: ‘The Ambassador West project [site pictured], one of the largest and most prestigious in the city’s history, has been foreclosed on and the property is back on the market for the fourth time in a decade. ‘We no longer own any of the property,’ Howard Weinberg, a part-owner of Ambassador West, said Monday. ‘A foreclosure sale has occurred.’ ‘ The L.A. Times matches the story here.
There’s also the bankruptcy filing Sunday of CalPERS-backed LandSource, which was developing 15,000 acres north of Los Angeles. When big entities like LandSource file for bankruptcy, they still have enough money for lawyers and public relations executives, and they publish press releases that make it sound like bankruptcy is nothing special or unexpected, just another challenging chapter in the life of a business. This is not true. Nobody expects bankruptcy to happen. Do you really think honest, hardworking local businesses that did work for LandSource thought they would have to fight in court to get paid for work they’ve already done? You can follow the bankruptcy at this site.
Lastly, government leaders in Los Angeles are threatening -- threatening -- to play hardball with the cash-strapped developers of the Grand Avenue project: ‘The government board overseeing the $3-billion Grand Avenue project on Monday unexpectedly rejected the developer’s request for an eight-month delay to begin construction on the development across from the Walt Disney Concert Hall. While both sides said they remain optimistic that the sprawling downtown Los Angeles development is on track, the vote is the strongest sign yet that government officials are growing concerned over repeated delays and hope to keep a tight rein on the developer they handpicked for the project almost four years ago.’
Update: Barbara Casey, a public relations consultant to Related California, e-mailed this afternoon with these thoughts: ‘The Grand Avenue project is not in foreclosure or bankruptcy and neither is its developer, Related Companies. It is completely unfair to include it in your litany of bad news. In fact, Related is not cash strapped at all, having received a $1.4-billion investment from Goldman Sachs, Michael Dell, and sovereign funds of Abu Dhabi and Saudi Arabia at year end 2007. The JPA did not threaten in any way to take the project away and did not reject Related’s request to move the construction start to February 2009 but deferred a decision on this until its next meeting July 28 in order to gather more information. Nothing was indicated that the JPA would not approve the extension to February 15, 2009. I refer you to the Downtown News and Daily News for more accurate accounts of what occurred at yesterday’s meeting.’
Those of you who want to take Casey’s advice and compare and contrast the two news accounts of Grand Avenue, here they are:
L.A. Times: ‘Developer’s request to delay L.A.’s Grand Avenue project is rejected’
L.A. Daily News: ‘Grand Developer gets extension’
I would happily include a link to the Downtown News story but can’t for the life of me find the article on their website.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo credit: Los Angeles Times