ultra-modern tower proposed for 9th & olive
Some forward-thinkers are already planning ahead to surf Downtown’s next big development wave.
Kim Benjamin, president of Laeroc Partners (and co-founder of the Historic Cultural Neighborhood Council), recently submitted an application to gain entitlements for a new 31-story tower to rise on the northeast corner of 9th and Olive.
Preliminary plans call for 283 residential condominiums, five ground-floor commercial condo units, and 669 parking spaces to replace a current parking lot surrounding the historic Coast Federal Savings Building (known today as the Washington Mutual Building), also owned by Benjamin.
Early architectural renderings show an ultra-modern style structure, a design choice which may be questionable considering the historic context of the neighborhood. (Benjamin has been contacted to release images for publication.)
The developer is concurrently seeking city approvals to convert the 12-story Washington Mutual Building, built in 1926, into 100 for-sale residential units with 40,000 square feet of office, restaurant and retail space.
Together these two projects would generate nearly 400 new condominiums in a housing market falling prey to shifting demand.
Is this a strategic decision to preempt market changes over the next three to four years?
It seems any new proposal of this scale today would have to be.
9 comments
they should create ground level paths crisscrossing the site to activate the ground level retail – a pedestrian shortcut.
move the most people through your site and make the most money.
The adaptive re-use of the WaMu building was approved in October 2007. It was for 98 live/work units on Floors 3 through 12 and 30,200 sf of commercial/retail uses on ground floor, Floor 1 and in the basement.
Im all for getting entitlements early, but what happens if the market changes and they want to change the number of units, or convert residences to offices?
Do they have to go through the entitlement process all over again?
JEremy – It will take 6 to 12 months to get entitlements, then 6 to 9 months for construction documents to be approved and get financing lined-up (maybe longer) and then around 3 years to build so this won’t be delivered for 4 to 5 years from today. The market should be back by then. If they waited until the market was “good” before starting this process, they would be almost certain to deliver this project at during a downturn.
Also, as almost any developer does, this project is maxed out – maximum number of units and maximum square footage. A developer does this because you can always make a project smaller when you go in to get your construction documents approved but you can’t make it any bigger than what was approved. So you get the biggest project approved and then downsize if you need to.
The property iz zoned residental so they can’t easily get offices built without a lot of brain damage from the City. Plus, there is virtually no new office space being built because the vacancy rate, even though it is falling, is still too high to justify new construction. But if new office space was needed, there are already a couple of other sites just waiting for office space demand to come back so they could start building and that would satisfy all the forseable new demand. So for the 9th & Olive site, offices will never make sense.
Getting entitlements at this point for a project this big is not early, it’s on-time.
Finally, to answer your last question, if they do get entitled and in the future did want to change to offices, they would have to do the entitlement process all over again. But considering the zoning and market demands, that won’t happen.
So at what point do his entitlements on the Wamu building expire? Seems sort of strange to push for entitlements on a new residential project when an existing one is sitting idle. Also, I would say he is a little late to the party with regards to entitling the parking lot, as almost every other parking lot in the area is already entitled. I don’t see how it will be possible to obtain construction financing at any point in the next three years.
If you get the final tract map recorded, then the entitlements don’t expire. In regards to nearby parking lots being entitled, I work for a company that has been trying to buy entitled spots and the only parking lot in the immediate vicinity that has been entitled is 850 S. Hill Street, the parking lot next to Eastern Columbia. There are a lot of owners who have announced plans for parking lots but almost none of them have actually turned in an application to get entitled.
I just want to point out that entitlements are only the first step in developing a property. I’m confused by the questioning on the timing. Why wouldn’t you get entitled, even if you had to sit on them for a couple of years? Getting entitlements just gets a step out of the way. Plus, when you get entitled they are based on the rules at the time. The City could suddenly change things and make every builder include low-income housing in all new projects or pay higher fees, etc. There has been a lot discussion around the City of imposing new obligations on builders — for example, see the proposed new Housing Element for the General Plan that is being circulated. If you get entitled now, you can avoid those sort of obligations.
Thanks David. That’s a lot of great info.
I was thinking that the entitlements might expire, I see it is just building permits that do. Out of interest, why are you not buying the 850 S property if it is for sale? It is listed at $275/sf, Meruelo Maddux paid $570/sf for the next two Ralph’s, 3 blocks away.