Hey, Mid City, your Lowe's store is officially on. As expected, developer CIM Group received a $19.3 million loan today as the city council granted the developer money to finish the second phase of Midtown Crossing, a project that'll bring a Lowe’s--completion date is 2012--to the intersection of Pico and San Vicente blvds. At today's meeting, City Council President Eric Garcetti compared the Mid City area to his own district of Hollywood, a neighborhood which has only recently felt the loving embrace of revitalization aka developers and their money. "[Mid City] isn't a place where people would normally invest,” he said, describing the reason he was supporting using federal funds for the project. Among those voting against the loan was Councilman Dennis Zine, who griped after the meeting about CIM Group and its use of pension and Community Redevelopment Agency (CRA) funds to pay for its projects. “The whole thing to me is like a shell game,” said Zine. “ I think that’s what CIM is like, they are a shell game.” But today's vote also picked at old wounds for Zine--two years ago, the CRA and CIM partnered on two Reseda projects, a theater and a planned Lowe's. During today's hearing, Zine complained about the graffiti and blight left behind after those deals fell apart. For their part, CIM Group opted not to get into the mud-slinging and issued a "no comment" in regards to Zine’s statements today.
The only other “no” vote from the City Council came from City Councilman Paul Krekorian, who questioned the transparency of the project and its ultimate public benefits in a statement. “Redevelopment will obviously play an important role in our economic recovery and the creation of new jobs and new tax revenues, but CIM Group has not met my expectations sufficiently to justify increasing the city’s investment in this project.”
Krekorian's vote of "no" wasn't entirely a surprise--he'd been critical of the $30 million Cirque du Soleil loan to CIM (also a federal loan) and famously sent around a mailer during his run for City Council that asked whether voters want to spend money on clowns or fire fighters (as the LA Times reported, his opponent, Chris Essel, accused Krekorian of misleading the public about the loan because federal funds can't be spent on fire fighters).
As for the project itself, it'll consist of the Lowe's, a second (and undecided) big box store, numerous retail stores, and 1,089 spot parking structure. Currently, Phase 1 includes a Starbucks, Panda Express, and Foot Locker. At least one space in Phase 1 is currently empty.
Last week, Leslie Lambert, CRA/LA Regional Administrator for the Hollywood & Central Regional Area, told us it was her understanding that CIM Group's previous two loans had fallen through for the project, which had led to the delays in finishing. According to a Community Development Department document that outlines the financials of the project, CIM is now using a $44 million Comerica loan for the project (to see the whole document, go to this link, and click on the upper right PDF document that says Report from CDD). Public investment covers 20 percent, a total of $33.95 million, of the whole project, while CIM's own equity in the project equals $133.5 million, according to a rep for the developer. Phases 1 and 2 cost a total of $167.5 million.
Lambert doesn't believe that this project would have gotten built without outside help. "You can't do a project in South LA without [outside money]" she said.
· Developer asks city for another loan, of $19.2 million [LAT]
· Long Stalled Midtown Crossing Project Rises from the Dead [Curbed LA]
· CIM Paying to Finish Midtown Crossing [Curbed LA]