use Learning from Los Angeles October 2013 ThePartnership for Building Re About the Partnership NATIONAL TRUST FOR HISTORIC PARTNERSHIP FOR BUILDING REUSE PRESERVATION The National Trust for Historic Preservation The National Trust for Historic Preservation, a and ULI created the Partnership for Build- privately funded nonprofit organization, works ing Reuse in 2012 to enhance opportuni- to save America’s historic places. Launched ties for building reuse in major U.S. cities. by the National Trust in 2009, the Preserva- Recognizing the environmental, economic tion Green Lab strengthens the fabric of com- and community benefits of reusing vacant munities by capitalizing on the inherent value and blighted property, the Partnership for of their irreplaceable built assets to improve Building Reuse brings together community social, environmental and economic perfor- groups, real estate developers, and civic mance. leaders around the common goal of making it easier to reuse and retrofit these valuable URBAN LAND INSTITUTE assets. The Partnership for Building Reuse The Urban Land Institute (ULI) provides launched with a pilot project in Los Angeles leadership in the responsible use of land and in 2012 and is expanding to four additional in creating and sustaining thriving communi- cities in 2013-14. A national convening and ties worldwide. ULI is an independent global publication summarizing the lessons learned nonprofit supported by members represent- through the Partnership for Building Reuse ing the entire spectrum of real estate de- is planned for 2015. velopment and land use disciplines. ULI Los Angeles is a district council of ULI, and car- ries forth the ULI mission as the preeminent regional real estate organization providing inclusive and trusted leadership influencing public policy and practice. Cover photo: the Old Bank © 2013 The National Trust for Historic Preservation District in downtown Los 1785 Massachusetts Avenue NW Angeles has been transformed Washington, DC 20036 into a 24-hour urban neighborhood through the All rights reserved. Reproduction or use of the adaptive use of once vacant historic buildings. whole or any part of the contents without written Jim Lindberg, NTHP photo permission of the copyright holder is prohibited. Learning from Los Angeles | October, 2013 3 Project Staff Eileen Fogarty President, The Fogarty Group Urban Land Institute Tom Gilmore S. Gail Goldberg Chief Executive Officer, Gilmore & Associates Executive Director, ULI Los Angeles John Given Christine Aure Susa Principal, City Build Advisors Director, ULI Los Angeles Lew Horne Matthew Severson Executive Managing Director, CBRE Associate, ULI Los Angeles Lynn Jacobs Adrienne Schmitz President, Ventura Affordable Homes Senior Director, Publications, ULI Brian Jones National Trust for Historic Preservation President, BMJ Advisors Mark Huppert Senior Director, Preservation Green Lab Macy Leung Principal, Sai Investment and Development Jim Lindberg Planning Director, Preservation Green Lab Rick Newman President, Lowe Enterprises Jeana Wiser Project Coordinator, Preservation Green Lab Christopher Redfearn Director, Rusk Center for Real Estate, University Advisory Committee of Southern California Chris Robertson Jonathan Curtis Urban Planner, Los Angeles County Department Advisory Committee Chair, ULI Los Angeles of Regional Planning California Golden Fund and City Council, La Ca- ñada Flintridge Ryan Spruston Associate Architect, Gensler Los Angeles Ryan Altoon Executive Vice President, Anderson Pacific Funders Peter Belisle Chairman, Project and Development Services, The Jessie Ball duPont Fund Jones Lang LaSalle The Kresge Foundation Linda Dishman Executive Director, Los Angeles Conservancy Southern California Association of Governments Adrian Scott Fine Director of Advocacy, Los Angeles Conservancy David Flaks Chief Operating Officer, Los Angeles County Economic Development Corporation 4 The Partnership for Building Reuse Contents Executive Summary .........................................................6 Introduction ................................................................9 A Pilot Process in Los Angeles ...............................................11 Development Trends .......................................................12 Barriers to Reuse ..........................................................18 Market .................................................................18 Financial ...............................................................19 Technical ............................................................. 20 Regulatory .............................................................23 Market Opportunities for Reuse .............................................28 Solutions to Overcome the Barriers ..........................................31 Action Plan ................................................................33 Conclusion: Learning from Los Angeles ......................................35 Case Study: The Los Angeles Adaptive Reuse Ordinance ..................... 36 Stakeholders ..............................................................41 About the Advisory Committee Members ................................... 43 Acknowledgments ........................................................ 49 Learning from Los Angeles | October, 2013 5 Executive Summary THROUGH INNOVATIVE PUBLIC POLICY Now Los Angeles is poised to write a new and creative private development, Los chapter in this story, one that builds on Angeles is demonstrating how older and ex- the remarkable success of the ARO. More isting buildings can be repurposed to serve than 10 million square feet remains vacant the new, creative economy and to help in buildings in the urban core, including meet goals to reduce carbon emissions. The downtown and the Wilshire Center/Kore- city’s downtown core contains one of the atown redevelopment project area. With nation’s finest collections of early 20th- work beginning on the first rewrite of the century architecture. Most of these build- city’s zoning ordinance since 1946, Los ings sat vacant for decades until a carefully Angeles has an opportunity to modernize targeted Adaptive Reuse Ordinance (ARO) land use regulations to make it easier to removed regulatory barriers, provided recycle these and other existing buildings incentives, and helped make it possible to to provide much needed housing, live/work repurpose more than 60 historic buildings space, creative offices, retail outlets, educa- as new apartments, lofts, and hotels. tional facilities and cultural and entertain- ment venues. Los Angeles is serving as the initial pilot city for the Partnership for Building Reuse, a national effort of the National Trust for Historic Preservation’s Preservation Green Lab and the Urban Land Institute. The goals of this initiative are to decrease rates of demolition, encourage building reuse, and foster sustainable community development in large cities across the country. Unfortu- nately, a variety of factors encourage the abandonment, underutilization or even demolition of buildings, resulting in need- less environmental impacts and lost de- velopment opportunities. The Partnership Although more than 60 for Building Reuse is designed to identify buildings in downtown Los Angeles have been common barriers to reuse and to develop rehabilitated since 1999, opportunities remain in recommendations for solutions to over- many vacant and under- come them. used structures. NTHP photo, Jim Lindberg 6 The Partnership for Building Reuse Led locally by the ULI Los Angeles (ULI LA) weaker in some areas, demand for “creative district council, the Partnership for Build- office” space is growing, particularly in older ing Reuse has engaged more than 50 local buildings with distinctive architectural char- real estate investors, developers, architects, acter. With these opportunities as well as contractors, historic preservation advo- the barriers in mind, an action plan to realize cates, planners, neighborhood representa- the potential of building reuse in Los Ange- tives, building code officials, and others. les was developed by ULI LA, to be carried Through analysis of development trends, out in partnership with other organizations one-on-one interviews, and facilitated dis- and community leaders. The plan includes cussions, local stakeholders have identified three main strategies: numerous barriers to building reuse in Los Angeles. These include: Action Plan for Los Angeles MARKET BARRIERS 1. Integrate building reuse as a goal in the up- • Unrealistic seller pricing of many existing build- date of the Los Angeles zoning code to align ings land use regulations with the city’s vision for • Fewer pre-World War II buildings suitable for re-urbanization. Focus on the rewrite of the reuse remaining Unified Downtown Development Code as a FINANCIAL BARRIERS policy model that can be adopted in other mixed-use areas in the city. • Lender concerns about project complexity and delays 2. Streamline the building permitting and ap- • Some areas of the city still considered too risky proval process by aligning three city depart- by lenders ments (Planning, Building and Safety and Fire) to the goal of making building reuse TECHNICAL BARRIERS easier. • Functional challenges with reusing post-World 3. Create support for policy reforms and War II structures incentives that encourage building reuse by • Providing parking on site is often difficult documenting the environmental, economic, REGULATORY BARRIERS and social benefits of building reuse and