Hahn extends adaptive reuse law with an eve on expansion.

Emboldened by the success of the city's limited adaptive reuse ordinance and having made housing a priority for the balance of his first term, Mayor James Hahn has signed an extension of the ordinance taking it citywide.

But what works in urban areas like downtown, Hollywood and Koreatown may not fare as well on the Westside, South Bay or San Fernando Valley, where constituencies and infrastructure are far different.

"It may be great that you have a streamlined approval process for adaptive reuse, but if you can't build a consensus with the homeowners associations, you're not going to build," said Bob Champion, president of L.A.-based Champion Development Group, whose projects include retail center Brentwood Place and the mixed-use Pasadena Collection.

The city's first adaptive reuse ordinance, enacted in 1999, applied only to downtown, where it eased the approval process for office-to-residential conversions by reducing design requirements like set-backs and parking. Since then, 6,500 residential units have either been created in former office buildings or are in development, according to the mayor's office.

Next month the ordinance will take effect citywide, and even members of the mayor's staff believe that the low-hanging fruit has been picked, leaving file next round of conversions to take place more gradually.

"The largest inventory of vacant commercial office buildings were in downtown's historic core," said Harold Behdad, director of adaptive reuse projects for the city. "There are not as many empty office buildings in West L.A."

That said, some areas are more likely to be targeted for adaptive reuse than others. Buildings in markets with high vacancy rates in parts of the central San Fernando Valley and Los Angeles International Airport-adjacent corridors like Century and Sepulveda boulevards are already being looked at by developers, Behdad said. In addition, San Pedro's stock of historical office buildings makes it ripe for application of the expanded ordinance, said Jonathan Kevles, deputy administrator for the Community Redevelopment Agency.

No slam dunks

A prime candidate is the Panorama Towers, a 176,000-square-foot building on Van Nuys Boulevard near Roscoe Boulevard.

The building became a leading business address following its construction in 1962, but it was red-tagged after the 1994 Northridge Earthquake. Vacant for nearly a decade, it is now being marketed for sale, providing an opportunity for a developer to build into a fully leased Panorama City apartment market.

But the promise of a streamlined process and a virtual guarantee of leasing up are not enough to overcome other obstacles.

Jerry Pollak, a Sherman Oaks architect and chair of the area's Urban Design Assistance Team. said it would be cheaper to tear the building down than rebuild with seismic repairs. The decision to tear down and start from scratch was also reached by developer Raffi Cohen in San Pedro, where he plans to raze the 122,000-square-foot building at Filth and Palos Verdes streets that once housed Northrop Grumman Corp. subsidiary Logicon Inc.

The building, San Pedro's tallest, has also been vacant for a decade. Initially considered as an adaptive reuse project, Kevles said the cost of asbestos remediation at the 38-year-old structure helped convince Cohen it was better to rebuild the site as a lower-rise apartment complex with more than 200 units.

The ordinance has been effective in urban neighborhoods. After downtown, adaptive reuse was extended in February to neighborhoods ranging from Hollywood to Lincoln Heights.

The ordinance has contributed in part to the countywide building boom--fueled by increased demand, higher prices and lower interest rates. Permits for more than 11,000 multi-family units were issued in Los Angeles County last year, compared with 4,805 in 1998, the year preceding the first ordinance, according to the Construction Industry Research Board.

The increase reflected a regional bull market in residential real estate, but the ordinance did serve to free up in fill properties.

The ordinance has also allowed developers to shift gears when projects faltered. The Hollywood Equitable building at the northeast corner of Hollywood Boulevard and Vine Street was renovated last year by Gilmore & Associates LLC and Paladin Realty Partners as an office building. But it is mostly empty and will be redeveloped next year into a project with about 60 condominiums above ground floor retail.

Palisades Development Group will join the partnership as lead developer, according to a source familiar with the process. Both Gilmore and David Gold, principal at Paladin Realty, acknowledged that Palisades had been brought into the deal for the conversion.

Meanwhile, in Mid-Wilshire, Upside Investments Inc. is redeveloping the Getty Oil Co. headquarters building at Wilshire Boulevard and Western Avenue to 260 apartments and 25,000 square feet of ground-floor retail.

Despite the rapidity with which infill developers have moved to take advantage of the ordinance, it will be years before it makes a dent in the region's acute housing shortage, if it ever does, said Christopher Cagan, director of research and analytics for First American Real Estate Solutions.