LOS ANGELES
DOWNTOWN
NEWS Civic park adds some new details.
2
Rising comments on Downtown economy.
5
Supportive housing doesn’t meet demand.
7
Noah’s Flood at Cathedral.
9
Health: Three new Downtown gyms.
11
Review: Frost/Nixon at the Ahmanson.
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22 CALENDAR LISTINGS 24 MAP 25 CLASSIFIEDS
13-19
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Blossom bankrupt, film permitting and other happenings Around Town.
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Editorial: Some good news about Downtown and the recession.
W W W. D O W N T O W N N E W S . C O M
March 16, 2009
Volume 38, Number 10
INSIDE
Restaurants
Marquee Downtown Office Tower for Sale Maguire Partnership Agrees to Unload One California Plaza by Ryan Vaillancourt staff writer
T
he owners of One California Plaza, a 42-story Bunker Hill office tower, are looking for a buyer. Purchased by Maguire Properties in 2003 from Metropolitan Life Insurance Company for $225 million, the building was later folded into a joint ownership venture with Sydney, Australia-based Macquarie Office Trust in 2006. Macquarie owns an 80% stake in the building, along with five other jointly owned projects with Maguire. It was Macquarie’s
initiative that led the partnership to put One California Plaza — the only Downtown property in the group’s portfolio — on the market, said Peggy Moretti, a spokesperson for Maguire Properties. “Earlier this year, Macquarie, our longstanding partner, reached out to us regarding disposing of the asset and in the spirit of the partnership we agreed,” Moretti said. In addition to One California Plaza, the companies are also looking to sell the Wells Fargo Center in downtown Denver, a 52-story trophy office tower. see One Cal Plaza, page 8
photo by Gary Leonard
One California Plaza, purchased by Maguire Properties in 2003 for $225 million, is for sale.
Round Two for Palmer Lawsuit
Meruelo Maddux Considers Bankruptcy
Developer’s Challenge to Affordable Housing Could Hamper Citywide Policy
Prominent Downtown Landowner Likely To Default on $226 Million in Loans
by Anna Scott
by Ryan Vaillancourt
staff writer
staff writer
W
ith one victory already in hand, a Downtown Los Angeles developer is once again challenging the city’s affordable housing requirements in a court case that could have repercussions across town. The dispute involves the wellknown developer Geoffrey Palmer, who in 2001 sued the city to avoid having to offer cheaper rents in his Visconti apartment project. The case was settled in 2004 and Palmer was allowed to build his project without the affordable units. This time around Palmer is suing the city on largely the same grounds. In this case the issue is whether Palmer must include affordable units in his upcoming Piero II apartment building. If successful, Palmer’s latest case, now before a state appellate court, could put a major dent in Mayor Antonio Villaraigosa’s plan to create a citywide affordable housing requirement. Palmer is one of Downtown’s biggest investors and is known for his collection of Italian villa-inspired apartment buildings in the area west of the 110 Freeway. He has built 2,200 units and invested hundreds of millions of dollars in the area since he announced plans for the $90 million, 600-unit Medici at Seventh and Bixel streets in 1998.
M
ereuloMadduxProperties, one of Downtown’s largest landowners and developers, has stopped making interest and principal payments on 26 loans totaling $266 million, and is considering filing for Chapter 11 bankruptcy. The company has been trying to sell many of its Downtown properties in order to raise cash, and while it has some properties in escrow, no deals have closed so far in 2009, the company told investors on March 12. The Downtown real estate giant
wrote down the value of 20 of its properties in the fourth quarter, resulting in a $117.4 million impairment loss; its net loss for the quarter was $85.8 million. Meruelo Maddux began this year with $4.5 million in unrestricted cash, enough to satisfy its monthly debt obligations for two and a half months. “Consequently, we have stopped making interest and principal payments on, and therefore are likely in default under, these 26 loans totaling $266 million,” company Chairman and Chief Executive Officer Richard Meruelo said. see Maddux, page 10
photo by Gary Leonard
Developer Geoff Palmer has sued the city to avoid including affordable housing in his upcoming Piero II project. The case is currently in state appellate court.
While Palmer has been praised by some as a pioneer who brought housing to the once barren City West, he has also been heavily criticized for refusing to include affordable units in his projects. Under the City West Specific Plan, at least 15% of the units in area developments must be affordable and priced for low-income workers. If the units are not included, the developer must pay a fee that the city can use to build the units elsewhere. see Palmer, page 6
photo by Gary Leonard
Meruelo Maddux Properties, led by president and chief executive officer Richard Meruelo, is considering filing for voluntary bankruptcy.
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