|
 |
June 29, 2001 |
|
Metro Rail Joint
Development Fever Spreading To Developers The MTA Board of
Directors yesterday agreed to enter into six months of exclusive
negotiations with a developer who wants to build a $36 million mixed-use
complex at the Wilshire/Western Metro Red Line subway station. If, at the end of the
period, the MTA Board approves a joint development agreement with Wilshire
Entertainment Center LLC, which would also include a ground lease, the
four-story complex would feature 50,800 square feet for retail stores, 182
rental units, 564 parking spaces and a bus transit center. Wilshire Entertainment
Center LLC is one of an increasing number of developers who have proposed
joint developments at Metro Rail stations, a reflection of a strong
economy, a shortage of commercial real estate and realization that Metro
Rail locations can be quite profitable. “Developers realize
that they have an immediate customer base when they go into a Metro Rail
station,” says MTA Planner Phil Ganezer. “Thousands of Metro
passengers come and go through the stations each day. It’s a bonanza at
the cash register waiting to happen.” Developers and tenants
aren’t the only ones who stand to gain. “Ground lease
agreements with developers can result in the raising of millions of
dollars in funds that can be used by MTA Operations,” Ganezer said.
“For instance, at our Hollywood/Highland Metro Red Line station the MTA
is receiving approximately $500,000 annually from TrizecHahn for a ground
lease.” Exclusive negotiations
are also underway with developer MacLeod Partnership to jointly develop
the Westlake/Macarthur Park Metro Red Line subway station. If a final deal can be
consummated, the station would feature 52,000 square feet devoted to
retail and restaurants, a 50,000 square foot market, 6,500 square feet for
retail kiosks, a possible a charter middle school for 350 students plus
park-and-ride spaces and an area where passengers can be picked up or
dropped off. Joint developments have
already taken place at other Metro Rail stations. Set to open this fall
above the Hollywood/Highland Metro Red Line station is TrizecHahn’s
Hollywood & Highland, a $615 million entertainment/retail complex
which will encompass 640,000 square feet and and feature the future home
of the Academy Awards. At the
Hollywood/Western Metro Red Line subway station, McCormack Baron Salazar
have already built 60 affordable housing units at a cost of $11 million. A
tentative ground lease agreement has been reached to build 60 more
affordable housing units, a daycare center and 10,000 square feet of
retail space for $12.5 million. Construction could begin in several
months. The MTA is currently
reviewing a number of proposals for a joint development at the North
Hollywood Metro Red subway station. Requests for Proposals (RFP) were
authorized by the MTA Board. Responses are due for Wilshire/Vermont on
August 15 and Hollywood/Vine on August 27. A senior MTA planner
agrees that interest on the part of joint development in Metro Rail is on
the upswing. “During the recession
the real estate market, of course, was not very strong ,” said Deputy
Executive Office Carol Inge. “As the economy improved we eventually
began to get inquiries from developers so we decided to become more
pro-active and do our own market assessment. We are gratified to be
receiving a lot of responses. Joint development at rail stations
throughout the United States is very popular so this doesn’t come as a
big surprise.” MTA-095 |
|