Article by Peter Landau
LOS ANGELES-Graduate students affiliated with the USC Lusk Center for Real Estate have won the Silver Shovel in the fifth annual NAIOP SoCal USC/UCLA Real Estate Challenge. The team of five USC students from the Marshall School of Business MBA Program and the School of Policy, Planning and Development Masters in Real Estate Development Program created a winning plan to redevelop an industrial site in downtown Los Angeles.
The team analyzed the two sites on the Southwest corner of Seventh St. and Alameda St. commonly referred to as the S.E. Rykoff site and the Old Produce Market. The site areas total approximately 31 acres. The S.E. Rykoff site currently is improved with four largely vacant industrial buildings, the Southern Pacific Buildings. The Old Produce Market is currently a wholesale market serving mostly small grocery stores and restaurants which operates out of three low-rise historic structures on the site also known as the Terminal Buildings.
The proposal includes the following elements: relocate many of the current tenants of the Old Produce Market to a new 93,870 sf facility to be constructed on the South side of the site adjacent to the Los Angeles Wholesale Produce Market. Rehabilitate the historic Terminal Buildings into 250 live/work units and 125,000 sf of commercial/retail uses around a central plaza. This element is referred to as the Seventh Street Marketplace.
Further, the plan calls to demolish three of the Southern Pacific Buildings preserving the six-story building on the Northwest corner of the S.E. Rykoff site. Construct 248,706 sf of new industrial space for sale and lease targeting the produce distribution industry on the S.E. Rykoff site. Rehabilitate the remaining Southern Pacific Building (Building C) into 270 live/work units after there is sufficient downtown demand for housing to absorb these additional units. Sell two graded pads totaling 1.89 acres for intensive commercial use to maximize land value of that portion of the site and realize early cash flow.
The property is owned by Richard Muruelo, who bought the site with the expectation that there would be some value added development forthcoming. "We think that he or potential buyers of the site will pay a lot of attention to the analysis the students did as they consider options downstream," says USC professor David Dale-Johnson, Ph.D., the faculty advisor for the team. The team was made up of David DePriest, Loren Borstein, Roberto Smith Macdonald, Adam Smith and Gail Tubbs.