ULI Los Angeles News

From Drab to Fab – A Downtown LA Icon Gets a Hollywood-Style Facelift

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The Athenian agora was a well-defined town center that served as a marketplace, meeting hub, and the civic heart of the city. The Ratkovich Company’s vision is to create a new agora in downtown Los Angeles with the opening of their latest mixed-user, “THE BLOC”.

On September 24, 2015, ULI Los Angeles and the ULI Women’s Leadership Initiative hosted a tour and panel discussion with the team behind THE BLOC. Presenters included:

  • Beth Kubasak, Development Manager, The Ratkovich Company
  • Katie Chamberlain, Development Manager, National Real Estate Development
  • Jackie Park, Co-Managing Partner, DLA Piper
  • Moderated by Clare De Briere, EVP & COO of The Ratkovich Company
  • Introductory remarks by Wayne Ratkovich and Nancy Wilhite, Managing Director, CBRE

The hulking, fortress-like edifice of the Bloc occupies an entire downtown city block between 7th, 8th, Hope and Flower Streets. Macy’s Plaza was designed in 1973 by Charles Luckman as a mall, anchored by a Macy’s and a Sheraton Hotel. At the time, the impenetrable brick cube was state-of-the-art, shielding patrons from the dangers of downtown Los Angeles with an inward-facing, enclosed environment.

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The former fortress-like Macy’s Plaza. Images courtesy of LADowntownNews.com.

Times change, and downtown Los Angeles has become a thriving, vibrant, round-the-clock metropolis teeming with affluent young residents and free-spending tourists.

Developer Ratkovich, working with equity partner National Real Estate Advisors, debt partner Blue Vista Capital, architects Studio One Eleven and contractor Webcor, have transformed Luckman’s block. The roof has been stripped-off, the sides opened, and the layout flipped inside-out to create an open-air marketplace and transit hub combining hotel, office, and retail space. This new series of interlocking structures surrounding an open multi-level plaza is called “THE BLOC”.

The new plaza will spill out onto 7th Street, beckoning and welcoming pedestrians with an array of restaurants, bars and retail stores. The previously featureless Flower and Hope Street facades are to be punctuated with street-level retail. The 8th Street side, with access and egress to the parking garage, couldn’t accommodate retail so the walls have been brightly decorated by San Francisco-based muralist Chris Lux.

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Flower St. entrance

From a brick barricade (top) to open and inviting (bottom), the transformation of the 7th Street entrance to The Bloc. 

Images courtesy of The Ratkovich Co.

As if such a massive undertaking weren’t challenging enough, Ratkovich has been gutting and renovating the buildings while they remain occupied. As Ratkovich’s Clare De Briere explained, the project simply would not have penciled-out without the revenue, so tenants were accommodated and shifted about as the construction work swept through the structures. Neither the hotel nor the Macy’s ever shut down and the retail occupancy never dropped below 70%.

The conversion is striking. The 478-room Sheraton Hotel remains, but has been transformed from grim, with a subterranean lobby described as “the pit of despair”, to glamorous, with a glittering street-level lobby by Belfast and New York-based designer Colum McCatam. Sheraton is so pleased with the results of the $40 million rehab, the hotel has been re-branded as a Sheraton Grand, one of parent company Starwood’s elite brands.

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The Bloc - Hotel Lobby View

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The drab subterranean hotel lobby before (top) was brought to street level (middle and bottom) and made dramatic.

Images courtesy of The Ratkovich Co. Photo (right) by Tim Braseth

The Macy’s, too, is being converted from one of the department store chain’s depressing discount outlets to a 250,000 square foot flagship store with an all-new top-of-the-line home goods department.

San Francisco-based men’s clothier and lifestyle brand Wingtip will open their first Los Angeles outpost selling ready-to-wear menswear and leather goods, as well as cigars, cigar accessories, single-malt scotches, fly fishing gear and barware.

Austin, Texas-based Alamo Drafthouse Cinemas, famous for their beer-and-burger in-seat service with theaters in Colorado, Virginia and New York will open their first California location in THE BLOC with an 800 seat, nine screen multiplex on the upper levels of the plaza.

Ratkovich’s De Briere said they sought a curated mix of unique and interesting tenants that couldn’t be found anywhere else in Los Angeles.

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View from Office Lobby

From urban underworld to open street-scape. The mall’s roof was removed to create an open-air plaza.

Images courtesy of The Ratkovich Co.

And there’s more to the project than just retail. The 33-story 700,000 square foot office tower has been upgraded and modernized with a “fun, creative office vibe” according to tour guide and architect Carlos Hernandez from Studio One Eleven. This includes a new rooftop garden and dog run. New office tenants include the Golin advertising agency, taking 24,000 square feet, and the headquarters of Nordstrom’s e-commerce ventures Nordstromrack.com and HauteLook.com, taking 44,000 square feet on two floors.

Enhancing the traditional agora with a transit hub, Metro agreed to split the $9.3 million tab to bust through “knock-out” panels in the nearby 7th Street Metro station (designed for this very purpose) and connect the station to THE BLOC’s retail plaza with a twelve foot tunnel.

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Metro

The dog-welcome rooftop garden (top) and new Metro station (bottom).

Images courtesy of The Ratkovich Co.

Early press releases announced a total project cost of $160 million, which later grew to $180 million. Ratkovich’s De Briere said there was no way to create a budget for such an ambitious undertaking. For example, “tens of millions of dollars” of unforeseen asbestos mitigation had not been in the original budget, she reported.

Each panelist was asked to describe their biggest challenges faced by the project.

  • Jackie Park of DLA Piper cited the difficulties in coordinating with separate lenders for the office/retail complex and the hotel; navigating the maze of restrictions and encumbrances; and negotiating with politicians, labor unions, and Metro officials.
  • Beth Kubasak of Ratkovich described the physical challenges of blending three different uses – office, hotel and retail. Accommodating legacy tenants and fielding stronger than expected interest from new tenants proved to be an additional challenge.
  • Katie Chamberlian of National Real Estate Advisors said overcoming Sheraton’s rather staid brand restrictions and getting Starwood to “push the brand’s envelope” was daunting, but rewarding when NREA succeeded in getting Starwood to think outside the box.

The LEED Gold Certified project boasts a number of firsts, including:

  • The first “indoor/outdoor” lobby for an office building.
  • The first known rooftop dog park.
  • The first Delos WELL BuildingTM certification in Southern California with “Wellness Wednesdays” featuring yoga, Krav Maga, and other exercise classes open to all complex tenants. Showers and bicycle storage in the parking garage accommodate those who want to bike to work.

When THE BLOC was first announced in June 2013, LA City Councilman Jose Huizar said “We no longer want to see fortress-like buildings that separate the activity on the inside from what is going on in the outside.” Seeing the results achieved by the Ratkovich-led team, it appears he may get his wish.

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Aerial-view rendering of the new The Bloc with open-air atrium and rooftop garden (right). 

Images courtesy of The Ratkovich Co.

This article was written by Timothy Braseth of ArtCraft Homes LA. ArtCraft Homes is a boutique real estate development firm bringing new life to L.A.’s historic neighborhoods. www.ArtCraftHomesLA.com

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