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Tuesday, Mar 19, 2024

Distance Grows Between Two Plazas

Ever since the 1994 Northridge Earthquake, the beleaguered Laurel Plaza-Valley Plaza corridor in North Hollywood has been a field of broken dreams for developers. They have envisioned the two shopping centers as a residential neighborhood, a mixed-use retail site, a TV production soundstage and even a soccer stadium, but all those plans ended in disappointment due to competing priorities, difficulties in assembling land, the loss of state redevelopment funds and the recession. Now, Laurel Plaza looks like it might finally get a new name and a long-awaited facelift, even as its decrepit sister, Valley Plaza, continues to decay with no apparent prospects in sight. San Diego developer Merlone Geier Partners recently released detailed plans for what it’s calling NoHo West, a dramatic overhaul of Laurel Plaza that would transform the 25-acre site adjacent to the 170 freeway at Laurel Canyon Boulevard and Erwin Street in North Hollywood. The plan calls for more than 700 apartments, 500,000 square feet of office space, a movie theater complex, fitness center, restaurants and 143,000 square feet of retail, possibly including a gourmet grocer, said Scott McPherson, executive managing director at Merlone Geier. The site’s tormented history does not deter the developer, who plans to invest hundreds of millions of dollars in the new project, he said. “We’re very aware of it, but it’s not daunting in that we have spent a lot of time thinking about how to move this (project) forward successfully,” McPherson said. “It fits a trend we see – the reuse of older retail properties as a great avenue for redevelopment, adding multifamily (housing) to create a walkable, live-work-play opportunity.” Despite a few concerns from local homeowners, Valley officials and business leaders are optimistic about the prospect of overdue improvements coming to Laurel Plaza. It and Valley Plaza, located two blocks north at Laurel Canyon and Victory Boulevard, were among the first suburban shopping centers in the country when they were built in the early 1950s, taking advantage of Southern California’s burgeoning car culture to bring customers out via the then-new freeway. The twin centers flourished into the 1980s, but with competition from newer malls such as Sherman Oaks Fashion Square, now owned by Westfield Corp., both were in decline by the time the quake struck in 1994. Developers who tried unsuccessfully to redevelop the sites over the past two decades, including J.H. Snyder Co. of Los Angeles, have linked them together because of their proximity, but Merlone Geier has no plans for Valley Plaza, McPherson said. City Councilman Paul Krekorian has made redevelopment of the entire retail corridor a priority since his election in 2009, and said he hopes a revitalization at Laurel Plaza will spark something similar at Valley Plaza. “The (Laurel Plaza) redevelopment proposal is very promising and (the development) team has a track record of creating good projects throughout Southern California,” he said. “If it’s done right, NoHo West could spark a renaissance for the area by creating jobs and dramatically increasing economic activity and home values.” ‘High priority’ Merlone Geier has two advantages over previous developers that struck out at Laurel Plaza: ownership and experience. Last year, the San Diego firm bought the property in a joint venture with L.A. developer Goldstein Planting Investments from Macy’s Inc. in Cincinnati. At one time, the four-story Macy’s department store on the site housed the regional headquarters of St. Louis department store chain May Co., which was acquired by Federated Department Stores, Macy’s parent company, in 2005. The price tag for the Macy’s, a 90,000-square-foot office building on site, plus acre after acre of mostly empty parking lots? $50 million. Spending that kind of money “gets your attention, as you can imagine,” McPherson said. “It matters a great deal and makes this a very high priority for our company.” In its more than 20-year history, Merlone Geier, and predecessor firm M&H Realty Partners, has focused primarily on West Coast neighborhood shopping centers, acquiring 136 properties, including several in and around the Valley. The firm, co-managed by Peter J. Merlone and Bradley A. Geier, has raised more than $3.2 billion in institutional equity capital since its 1993 founding. Locally, Merlone Geier projects include the Plaza at Golden Valley in Santa Clarita; Esplanade Plaza in Oxnard; Valley Central in Lancaster; and two projects in Palmdale, Palmdale Marketplace and 47th Street Pavilion. But the template the developer is using for NoHo West, McPherson said, is a Silicon Valley project: Merlone Geier’s Village at San Antonio Center. Like Laurel Plaza, the Mountain View site had a soon-to-be-dark department store – a Sears, in that case – surrounded by a giant, underutilized parking lot. A mixed-use retail and residential center with a movie theater and 450,000 square feet of office space preleased to business-focused social media site LinkedIn is being built there. As it did in Silicon Valley, Merlone Geier will likely see NoHo West through to completion, rather than get the property entitled and sell off parcels to other developers, McPherson said. Earlier this year, the developer submitted a proposal to the city’s Planning Department requesting a zone change and multiple conditional use permits for the site. McPherson said he hopes to get the environmental review for the project completed sometime next year. The plan repurposes the existing Macy’s building with retail space on the ground floor, three floors of office space above and underground parking in an existing basement. The department store is operating on a short-term lease now and will vacate the building before construction begins, McPherson said. The plan also envisions the three-story office building on the corner of Laurel Canyon and Erwin will be torn down and replaced with retail space, which will be built first and then followed by residential buildings along Erwin and Radford Avenue. Architectural renderings by Altoon Partners of downtown Los Angeles show the project bisected by a tree-lined street with a central, landscaped plaza featuring a fountain and outdoor seating and an eight-story parking structure adjacent to the freeway. It will be possible to close off the street to vehicle traffic to accommodate community events, food festivals and farmers markets, McPherson said. The movie theater, while costly to build, is expected to draw shoppers from a wide area and bring vibrancy to the center that will support the restaurants and retailers, he added. Local concerns North Hollywood residents, for the most part, seem thrilled to see a viable development proposed for Laurel Plaza after so many years. “Much of the feedback I’ve heard has been quite positive. Almost everyone in the area wants to see a good redevelopment on this property,” Krekorian said. But Diann Corral, president of the Laurel Grove Neighborhood Association, said she and others are concerned about the multifamily density in the plan. “We feel that it is excessive and the number (of apartments) needs to be reduced,” she said, pointing out that a 2007 plan for the site also included 742 units, but they were to take up nearly the entire 25-acre site, along with a 4.6-acre park. Krekorian said he shares neighbors’ density concerns and will work to decrease the number of units built on the site where a generation of Valley kids grew up shopping and skating at the Ice Capades Chalet, one of the structures torn down after the earthquake. Stuart Waldman, president of the Valley Industry and Commerce Association, was one of those kids. But after Laurel Plaza was largely demolished after the earthquake and retailers left Valley Plaza’s storefronts vacant as infrastructure crumbled and potential redevelopment loomed, North Hollywood residents have taken their dollars to malls in Burbank and Glendale, he said. Bringing commerce back to Laurel Plaza with the NoHo West project will do wonders for that area, which has seen better days, Waldman said. But prospects for redevelopment at Valley Plaza remain scarce, with property there fragmented into small parcels. “People thought (Valley Plaza) would be easy, but when there are many different owners, things are never easy,” Waldman said. Before its redevelopment plan fell apart in the recent recession, J.H. Snyder had assembled about 70 percent of the land at Valley Plaza – holdings it ultimately sold to iStar Financial Inc., a New York commercial real estate lender. Retail broker Matthew May of Sherman Oaks’ May Realty Advisors said he fears that Valley Plaza’s ownership issues will keep it from becoming what it could be, though he thinks the Laurel Plaza project has promise. For instance, while the NoHo Arts District, located a few minutes’ drive south along Lankershim Boulevard, might be cool and eclectic – May described it as the Echo Park or Silver Lake of the Valley – it lacks a central shopping district. “Done right, (NoHo West) could create a great retail community with great exposure and freeway access,” May said.

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