The Greenland Group raised more than a few eyebrows when they boldly proclaimed that they'd break ground on the long awaited Metropolis development before the end of 2013. Turns out that they might not have been that far off. According to a document from the city's Chief Legislative Analyst, the Chinese developer plans to start shoring and grading work for phase one of Metropolis on February 14. Phase one will emerge at the intersection of Francisco Street and James M Wood Boulevard, consisting of two high-rise structures above a pedestrian plaza. The first tower, a 350-room Hotel Indigo, will rise approximately 19-stories. Guest rooms will stand above a podium structure containing food and beverage outlets, meeting space, recreational amenities, and street level retail. Records from LADBS indicate that the second tower is intended to rise 38-stories, containing 290 residential units above a parking podium. Phase two, which has no scheduled groundbreaking date, will consist of
Unfortunately, not all is not well on Metropolis' 6.3 acre parking lot. The Greenland Group claims that the project's hotel component is facing an $82-92 million finance gap, and requests assistance from the city to make up for the deficit. In years past, Los Angeles has granted tax rebates to both the J.W. Marriott and the Wilshire Grand for this purpose. While the city will conduct its own analysis of Greenland's project before making a decision, representatives of the Convention Center have already indicated a willingness to provide financial incentives to get 4,000 new hotel rooms by 2020. In other words, it seems likely that the Greenland Group will get their tax break. In the meantime, get your popcorn ready and keep your eyes peeled for construction equipment come Valentines Day. Or go spend time with your loved ones...whatever. Either way, Downtown's long delayed mega-project will finally get shovels in the ground.
- Economic Development Incentives for the Metropolis Hotel Project (LA City)
- Greenland Group Gets Serious About Metropolis (Building Los Angeles)
The timing of all of this seems weird. Greenland just bought the property but are already about to break ground - when were the plans submitted to plan check? I don't remember hearing anything about them and when building high-rises, usually the whole building needs to be far along on the design before being able to get a grading permit. Also, Greenland plans to start building the hotel in less than a month yet their financing is not in place. The City's analysis is going to take at least a month, which means Greenland is going to start building before they know if they really get between $82-92 of government tax rebates. If the City rejects their request, won't Greenland need to change the design? If not, doesn't that mean Greenland doesn't need the subsidy? In regards to amount requested, that number seems very high. If Onni's tower at 32-stories is around $100 million to build, why does Greenland need so much money from the city to build a hotel of similar size? Finally, hotels are doing a huge amount of business in this area, which shrinks the need for any subsidy. So again, why are they asking for so much money?
ReplyDeleteJust re-read your January 6th post and the link to the shoring permit. It looks like only the shoring permit has been applied for, which means Greenland can only dig a hole in the ground. Hopefully, everything else will go smoothly for them. I wonder if they are going to dig out the whole site or just Phase I?
ReplyDeleteAnyway, great to see progress finally happen on this.
The idea that Greenland doesn't have the money to fund the project doesn't jibe with their previous statements about billion dollar investments and accelerated timelines. That being said, they're clearly aware that AEG, Related Cos. and Korean Air have all receievd tax breaks for their hotel projects. Given the recent statements from the city about adding 4,000 hotel rooms near the Convention Center, I'd guess that Greenland gets their financial "assistance."
ReplyDeleteThere are multiple permits required to construct both buildings. I'm not sure what their plans are for the rest of the site. My guess is that they just do Phase I for now and save the rest of the lot for later. Phase II is quite a bit larger, so I suppose they want to see if the market holds up.