retail loss affirms palmer’s lackluster commercial presence
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Butterfly Total Beauty Center, a full-service nail salon and skin care business, recently closed its doors in the Medici Apartments on 7th Street, just west of the 110 Freeway.
This week the space was vacated, awnings were removed from the storefront and another void was generated at the base of a building that has been plagued with empty retail since its final phase was completed in 2002. A small event ticket broker remains the only shop among the approximately 17,000 square feet of rentable space.
The retail situation here may sound bleak, but of all six G.H. Palmer & Associates buildings in Downtown (including Piero, Medici, Visconti and Orsini) Medici had the most established commercial presence.
To drive that point home, the only other Palmer property with a retail tenant is Piero, the 225-unit structure completed in 2004 on St. Paul Avenue which is home to a printing and copy service.
The controversial developer who fell under legal scrutiny back in 2003 for demolishing a historic Victorian house without permission, is seen by city officials as defiant for refusing to include affordable-housing units and designing Italian-themed properties which do not fit in with their surroundings.
Adding to public concern is Palmer’s inability to attract commercial users for the ground levels of his properties.
In August 2007, the Community Redevelopment Agency denied a change of land use needed for the third phase of Orsini (proposed for the northeast corner of Figueroa and Cesar Chavez), citing retail vacancy in the project’s other two phases as a cause for denial.
The first phase of Orsini opened in 2003 and contains approximately 10,000 square-feet of retail space which have never been leased out.
Regardless of his impotent commercial front, Palmer’s developments have been extremely popular with well-to-do residents seeking a resort-style living “oases” (complete with lush landscaping, pools and fountains) amid the languid fringes of western Downtown where his developments are located.
Though he continues to replicate this money-making recipe throughout Chinatown and City West (the Piero II site is now under excavation at 6th and Bixel), is Palmer aiming to improve these neighborhoods or is he just constructing more cash cows?
His “fortress-like” properties do very little to engage street life with uninviting storefronts and pedestrian bridges intended to keep residents off the sidewalks.
Considering these design choices, is Geoff Palmer really interested in leasing the ground levels of his buildings?
Sure, the less-than-optimal neighborhoods may be a deterrent to potential lessees, and it may seem counterintuitive for someone to purposefully forego rental income, but the developer has become notorious for resisting conditions imposed by the city.
Including commercial components of new residential construction is an unavoidable City Planning requirement, but there is no obligation to ever lease them out — especially since the luxury residences above demand top-dollar rents and are extremely lucrative by themselves.
Keep in mind that the first phase of Medici was completed eight years ago and still maintains 100% retail vacancy.
In an unexpected move last year, Derrick Moore of CBRE was enlisted to market the commercial spaces in all four Palmer developments. The timing of the broker switch is questionable since it happened shortly before the proposal for Orsini III was to undergo review by the CRA. (Moore has not responded to inquires for comments.)
Was the new retail marketing arrangement a ploy by Palmer to appear proactive in order to gain CRA approval for his next “Tuscan village”?
Even if that is the case, it’s not enough to impress the agency which is holding projects to higher design standards in today’s more dynamic market. Their denial is justified.
The fragile Downtown market can ill afford half a dozen buildings with no pedestrian life at the street level. Unfortunately, since Palmer chooses locations which garner little interest from other developers, we may be seeing much more of the vacant faux-Italian tackiness.
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20 comments
Hmmm, gives me an idea: art galleries? For free?
Bummer is, the windows are either darkly tinted or totally reflective making them doorways to unknown voids…totally uninviting…
The reason those windows are tinted is that most of those “retail spaces” aren’t even built out as such. Go over to the Medici and peer through that glass. What will you see behind it? Often a parked car. The retail is simply more parking spaces until it gets leased out, which makes me think that there’s little incentive to do so.
haha. does anyone notice that derrick moore is the only broker in downtown retail spaces? i’ve been living here two and half years now and it’s become a inside joke with my buds and me. it’s the entire city!
Derrick must not be very good at leasing. His signs hang on space that stays empty for many years.
Most of G.H. Palmer & Associates’ buildings are on out-of-the-way streets or locations, where a shopkeeper who is dependent on drop-in business will face a major daily battle in trying to stay afloat. Therefore, is there any surprise that the Butterfly Beauty Center didn’t make it?
However, the building on Chavez Way, near Figueroa in particular, is on more of a high-traffic corridor, so it should be easier for a commercial business to make a stab of it there. But if those apartments could use some additional parking spaces, and if there aren’t enough of the formally designated ones — or if parking for any stores that do rent in those buildings won’t be easily seen and accessible — then the demand for that will be greater than the one for stores. So I guess using the space behind those tinted windows for something, even if it’s only for housing cars, means the space at least isn’t sitting totally barren and collecting dust.
Mr. Palmer is extremely pro business, his business of course. Affordable housing is anthema to his type of business. One historical “artifact” was accidentally destroyed so he put himself under scrutiny by Chinatown and their watchdogs.
Unfortunately the vacancies of the business commercial spaces is no sweat for Mr. Palmer. He tore down the previous commercial properties and petitioned for” mixed” usage since if he tried only for residential only use he would have been turned down for a permit.
Basically he only wanted residential occupancy and would not be bothered if the commercial portions remain vacant.
Folks, no matter how much you try to gift wrap a turd with pretty bows and ribbons, it’ll still be a gift wrapped turd.
What I’m referring to here is downtown L.A. in general. I’ve been living in L.A. for what? three decades now I think? I’m making more money now than I’ve ever made, but NOTHING can attract me to move downtown.
I don’t care if the rent is so cheap that I could afford a Ferarri as a second car. I simply will not move downtown, there’s nothing attractive or remotely inviting about it.
So all the renovations, re-designs and so on are all for naught in my opinion. I’ve seen countless stories on the news about a new look for downtown and all this other crap, but that doesn’t change how shambolic downtown L.A. is period.
And all these huge expensive prison fortresses they ignorantly construct to entice people are going to eventually be torn down because of lack of interest.
Ok maybe that last prediction was too extreme, but my impression of the Medici, Piero and whatever other downtown prisons is that the times really don’t make those kind of places viable options for people to live yet.
In 2019 when it’s Blade Runner time and L.A. is scrunched beyond belief, maybe then building like this will thrive with residents and businesses, but until then it’s all a pipe dream.
Beno, we don’t care about your opinions of bow-wrapped turds. (Honestly, that’s one weird hobby, pal.) Quite possibly your scatological observations amuse your friends. (Sounds like a weird bunch of friends, too.) However, here your comments are unwelcome.
Yep, downtown ain’t for everyone. My neighbors and I are relieved to hear you are not making plans to move here. Fantastic. Now, beat it. And don’t come back.
The city needs to determine what its policy is towards these vacant retail spaces and it needs to figure out what it intends to do about them. Quite simply, these vacant spaces kill the street. Possibly, the residents actually like the deadening effect. It certainly adds to the fortress ambiance. The city needs to figure out if it will tolerate these spaces.
If Mr. Palmer cynically pledged to develop mixed use for these properties, city policy should seek to enforce that agreement. Here’s an idea. The city should place a special escalating penalty on properties with these kinds of vacant retail spaces. If the likes of Mr. Palmer don’t intend to fulfill their legal agreements with the city, they should be held to account. The penalty should escalate annually so as to ultimately induce the likes of Mr. Palmer to mend his ways.
That’s tough to implement. I mean, when was the last time a business owner took to letting the city scold them for not having a retail tenant? Supply and demand and the free market all have a part in it.
BUT that being said, the CRA has already taken action to deny a change of land-use based partly upon the lack of retail tenants in his other buildings. Basically saying either play the game, or we’re not going to either.
I agree. Discouraging this behavior is a challenge. I recall reading about a city in New York state which revived his historic core by implementing ordinances which essentially encouraged landlords to put their properties to good use or ultimately risk losing the property(!). I don’t think that’s needed here. But, creative thinking is desperately needed.
I’m just appalled by the blight these places generate by killing the street. There has to be a creative and effective way to combat this problem. If Mr. Palmer can’t develop mixed use properties, he shouldn’t be issued these kinds of permits. I’m also a little skeptical that Mr. Palmer developed the properties without a clear plan to meet the mixed use requirements. He is a very clever business man. If he can convince people to pay top-dollar to live in freeway adjacent properties, I think he is up to the task of developing profitable retail. I get the sense he doesn’t give a damn. The city just doesn’t seem to be defending its interests here with any vigor or intelligence.
“Wow! That Mr. Palmer pulled a fast one, again! Oh well! That darned supply and demand messes up everything.”
Mr. Palmer needs to be challenged to uphold his agreements with the city or face meaningful consequences. If he isn’t, why should any developer pay but lip service to the obligations of the permitting process?
Palmer’s buildings are in the boondocks of the central city, so luring and holding onto shopkeepers (and walk-in trade) is exceptionally difficult.
There’s a rib joint across the street from the cheesy Orsini that’s supposed to do reasonably well in attracting customers, at least enough to stay open (so far) indefinitely. However, its got front-door parking spaces, which the typical store in LA lives or dies by. Without that, shops on the ground floor of apartment buildings will be almost totally dependent on the sales from folks who live upstairs. If so, will there be enough of them to keep a store in the black? And that’s assuming the location isn’t on a prime street, such as Broadway, Melrose or Pasadena’s Colorado Blvd, where tons of people and cars pass by each hour.
And, Benovite, it will be hilarious if you currently reside in some tacky tract house in a bland, dull, faceless suburb, where your cultural options consist mainly of the multiplex Mann theater down the street or a play at your kid’s high-school auditorium, and your social options don’t extend much beyond a night at TGIF or the Olive Garden one mile away.
If you’re going to delete my posts, delete my original one too.
Or is there some truth in it?
Benovite, at least your first comment had some opinion to bring to the subject.
Stephen Friday: Yeah an opinion that some people here obviously couldn’t take.
So I get dissed, demeaned and shown the door because of it. =/
That sure is a proper way to run a blog!
Look I’m sorry not everyone shares a romantic vision of downtown L.A. as you guys do. I happen to love L.A., practically every part of it, even though I don’t want to live in every part that I practically love.
My doctor that had an office in Beverly Hills recently relocated to downtown. I wasn’t very happy about that because of the commute, and I had other issues. But once I got down there and saw where he was I congratulated him on his move and his swank new offices. I joked how I would look out of his window and see at brick wall at his old place, and he replied “yes but it was a Beverly Hills brick wall!”.
This story highlights one of the things that is wrong with the renovation efforts of downtown, and I learned an architectural lesson or two in the process of reading it.
In that respect the above blog reads as an intelligent study of an ongoing issue.
However, the responses I got to my comment certainly DID NOT come from any source of intelligence, but rather a bitter, childish approach to how to reply to someone.
And that last persons apparent take on comedy in desperately trying to generalize me as some suburban shmuck is pathetic.
Was that really necessary? Do you know who I am? Do I know who you are? Doesn’t make any difference does it.
Btw thank you Stephen for at least trying a sensible approach here.
Your comments are always welcome, and thanks for finding some common ground. I want to encourage opinions on Downtown issues from both sides of the table. My only request is to keep it civil.
does anyone know what happened to the butterfly nail salon? did they move or just disappear?
Guys, Get real, of course I want to fill these spaces. Its not easy cleaning up these decaying and blighted areas and then convincing others to risk there capital opening new businesses. Some succeed others dont. Rather than grip here, refer interest to us, I’ll make them a sweetheart deal. Geoff Palmer
Mr.Palmer, I have been following articles about the dilemmas you face even in light of feats acheived. I have ideas that may work for your company. I would like to request a five-minute conference via phone and a follow-up meeting face-to-face regarding my own observations of challenges and viable solutions that would work for G.H. Palmer, your two management companies and other local entities—plans that would make your State Enterprise Zone, Renewal Community and possible Federal Empowerment Zone Status work in your favor and perhaps even quell the City itself!
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