LOS ANGELES—May 15, 2003—State and local government officials and business leaders joined CIM Group to mark the start of construction for South Village, a residential and retail development in downtown Los Angeles. The 7.2-acre, multi-block site will bring 1,200 units of rental and for-sale housing along with a highly anticipated, full-service Ralphs supermarket, restaurants and other important retailers to invigorate downtown's growing residential core. The property has been the "missing link" between the 7th Street business district, that includes the 7th Street Metro Red and Blue Line Stations, and South Park where Grand Hope Park, the Fashion Institute of Design and Merchandising and more than 1,000 housing units have been developed in the past two decades.
"South Village will be a community that reflects Los Angeles - a blend of old and new woven seamlessly into the greater fabric of downtown," said Shaul Kuba, a founding partner of CIM Group.
A $247 million development bounded by 8th and 9th, Flower and Hope Streets, South Village is being developed in four phases with conversion of the historic Gas Company buildings to loft apartments in the first phase followed by construction of a 50,000-square-foot Ralphs supermarket with apartments above at 9th and Flower.
"The key to attracting a critical mass of residents downtown is providing easily accessible amenities and services that meet daily needs. CIM Group's securing a full service supermarket in downtown Los Angeles is a turning point and we expect it will draw additional retailers to the area," said Los Angeles Mayor Jim Hahn.
The first phase of development, called The Gas Company Lofts at South Village, estimated at $48 million, is well underway with the conversion of the former Southern California Gas Company headquarters buildings at 800, 810 and 820 South Flower Street. The original buildings were designed by three renowned Los Angeles architects: Parkinson, A.C. Martin & Associates and Robert V. Derrah. Restored in compliance with the Secretary of the Interior's Standards, the buildings will be transformed into 251 rental lofts and 22,500 square feet of street retail. Designed by Killefer Flammang the conversion plan combines historic elements with all of the amenities desired for modern living. The residences will be available for occupancy in September 2003.
"South Village is a model for urban planning and infill development. It provides for housing and services in a design that embraces the neighborhood, connecting to the street and creating a vibrant residential district," said California State Treasurer Phil Angelides who, as a member of the CalPERS board, has led the pension fund's effort to invest in urban redevelopment.
The second phase, called the Market Top Flats at South Village, is a model for mixed-use that maximizes the site's capacity while maintaining a strong pedestrian link. It will feature five levels of loft apartments above a 50,000-square-foot Ralphs with underground parking.
Comprising approximately 310,000 square feet, the 266 loft apartments above Ralphs will be built around a swimming pool atop the market with a central landscaped plaza creating a sense of open space that allows more light and air into the units. Designed by RTKL Architects, the building is a of modern urban style with a pedestrian orientation that includes a café setting in front of the market around the 9th Street entrance.
"CIM's South Village project is a giant step forward and a significant milestone for downtown Los Angeles, securing its future as a thriving 24-hour city," said Councilwoman Jan Perry, whose district includes downtown. "It connects people, neighborhood services, restaurants and businesses that have grown up around the Staples Center with the South Park residential community."
Equity funding for South Village, which is located in the Central Business District Redevelopment Project, came from the CIM California Urban Real Estate Fund. The Community Redevelopment Agency of Los Angeles has invested $11 million in the project.
"South Village will be a beacon of economic growth in downtown Los Angeles," said Sean Harrigan, President of CalPERS Board of Administration. "We are excited that this project will strengthen communities with needed jobs and housing while providing the opportunity for superior returns for our members and retirees."
Phase two will include another 10,000 square feet for retail along 9th Street between Flower and Hope. CIM is currently finalizing leases for a variety of restaurants and retailers including the International House of Pancakes, a coffee house, video store, dry cleaner and other community-serving retail. Total development cost for this phase is estimated at $60 million.
"Lack of a major supermarket to serve downtown's residential population has long been a major obstacle to our redevelopment efforts," said David Farrar, chairman of the CRA/LA Board of Commissioners. "With the Ralphs groundbreaking, the CRA/LA is proud to be part of the downtown renaissance that, along with new cultural institutions, is also seeing the addition of vital elements, like a supermarket and expected related retail activity to make downtown Los Angeles a truly livable, urban residential community."
"Ralphs began 130 years ago here in downtown Los Angeles with a store on 6th and Spring Streets when the community was forming. The company has a rich history and connection to the urban core and it is fitting that we return to our roots to again serve a dynamic and growing population in downtown Los Angeles," said Patrick Barber, senior vice president of real estate, Ralphs. The supermarket is slated to open in late 2004 while the lofts above will be ready for occupancy in early 2005.
Phase three of the development consists of 152 loft apartments and 25,000 square feet of retail space on the southwest corner of 8th and Hope Streets. Construction is scheduled to begin in 2004 at an estimated cost of $21 million.
The final phase will develop sites flanking the supermarket on the northwest corner of 9th and Flower Streets and the vacant parcel on the northeast corner of 9th and Hope Streets facing Grand Hope Park. Two buildings with a total of approximately 520 for-sale condominiums and an additional 30,000 square feet of retail space are planned at an estimated development cost of $118 million. A construction timeline for this final phase is in development.
CIM Group, based in Los Angeles, is a full service real estate investor and operator organized in 1994 to revitalize districts of high population density, including the traditional downtown areas within large cities and the main street districts within towns and suburban cities. A leader in California's urban renaissance, CIM Group has developed a premier portfolio of street retail and urban housing, office and mixed-use properties in California's most popular destinations, including Santa Monica's Third Street Promenade, Old Pasadena, Birch Street in Brea, Hollywood Boulevard and San Jose's downtown. Each CIM investment adapts proven land use and design principles of great urban districts to the unique strengths of the location and the needs of the community.
CIM Group has renovated a number of National Register historic properties, including the Colfair Building in Pasadena, and it will soon complete the redevelopment of the historic US Grant and Walker Scott buildings in San Diego as well as the Twohy historic building in downtown San Jose.
CIM is one of a few firms with the comprehensive ability to bring projects to life. As manager of the $180 million CIM California Urban Real Estate Fund, it has the financial abili ty to fund the equity requirement for projects. The fund, formed in 2001 with investments from the California Public Employees' Retirement System (CalPERS) and the California State Teachers' Retirement System (CalSTRS), is designed to pursue California urban infill projects.
Having equity funding available is critical to reassuring sellers and communities, attracting private and public partners, and moving projects forward among all parties. Expertise and capital from CIM and its partners have a multiplier effect on community development because they provide project certainty, encourage public participation, support debt financing, attract tax credit financing and encourage other private investors.