More princes than frogs: most ailing projects find recovery in due course. (The Return of The Bad & The Beautiful).

WHERE have all the dogs gone?

In identifying candidates for this year's installment of "The Bad and the Beautiful," the Business Journal found that examples of out-and-out development disasters that populated the list in 1999 were fewer and farther between.

With massive overseas investment in real estate and free-flowing capital from savings and loans long gone, so are ill-conceived developments from the 1980s and early '90s.

That means fewer buildings open empty and stay that way.

So while Santa Monica Place and Transamerica Center pale in comparison to nearby Third Street Promenade and the Bunker Hill office towers, both projects are mostly occupied. That's more than can be said for 1999 entrants 11175 Santa Monica Blvd. and 1100 Wilshire Blvd. (which made this year's list as well).

"Some institutions loaned money to developments that shouldn't have been made," said Bill Boyd, senior vice president at Grubb & Ellis Co. "After the recession, development capital was more scarce and required more investment by the developer, and that eliminated the type of designs that weren't market driven."

It was far easier coming up with entries for Best in Show.

They included Staples Center, with its wide-ranging civic impact, as well as the more localized success of San Gabriel's Universal Shopping Plaza and the long-term prosperity of BP Plaza.

But for those that do get built, what separates the winners from the losers?

"Other than luck?" quipped developer Jerry Katell, president of Katell Properties LLC.

A handful of lessons emerge when looking at why some developments succeed while others fail.

A frog can become a prince -- just give it a few years.

At least two of this year's "beautiful" developments could have qualified as "bad" ones in years past. Hollywest Promenade sat on the vine for more than a decade due to design and funding issues before MacFarlane Partners LLC reduced the project's scale and secured additional funding from Los Angeles' Community Redevelopment Agency. And Santa Monica's Hotel Casa del Mar site had been in a state of decline from World War II until its 1999 renovation.

"Even the old buildings get absorbed," said Bruce Schuman, senior vice president at Julien J. Studley Inc., referring to "Green Monster" anchor tenant ING Direct's lease deal last year for $1.80 a foot, about 25 percent below West L.A. market rents. "The first guy may lose his money, but if the second guy buys a building for $40 a foot that cost $150 to build, he can lease it for cheap. The other stuff gets filled up eventually."

Another lesson: A good architect won't make up for a bad idea.

William Pereira and Frank Gehry designed Transamerica Center and Santa Monica Place, respectively. But those developments took into account neither the ensuing office developments on Bunker Hill nor the eventual fade in popularity of the indoor mall.

On the other hand, the nondescript Universal Shopping Plaza, anchored by a 99 Ranch Market, is a hub of activity in the San Gabriel Valley.

Finally, timing can be just as important as location.

Cerritos Towne Center is an example of a well-funded, well-conceived project whose demand base simply dried up by the time it was completed.

A similar fate has struck high profile projects like Maguire Partners' Water's Edge, which was completed last year but remains empty. Kilroy Realty Corp.'s Westside Media Center was hurt by the bankruptcy of anchor tenant eToys and was more than half-empty as of the end of last year.

"You can study the market, build into a low vacancy area, build at the right cost and do the right design," said Katell, who has developed about 5 million square feet of commercial property since 1976. "But if something unpredictable happens, all of a sudden, you have a bad project."

THE BAD

PALAZZO WESTWOOD

Location -- Westwood Village

Prospective Tenants -- Residential, Retail

REDEVELOPMENT plans for the Glendon Avenue site date back more than a decade, when developer T.C. Wang proposed a hotel and residential complex, an idea that fell victim to the recession of the early '90s.

Since then, the issues have been more political than economic. Developer Ira Smedra purchased the site from Wang and floated plans for a 450,000-square-foot retail and entertainment complex, to be called Village Center Westwood, that would involve closing off the northern part of Glendon Avenue.

Neighborhood groups went nuts and Smedra wound up selling the property to Alan Casden, who is proposing a mixed-use project with 350 apartments over 115,000 square feet of retail -- and also feeling the heat from neighbors. Scale remains an issue, as do plans to temporarily close down Glendon while excavating an underground parking garage and the demolition of Glendon Manor, the 74-year-old apartment complex that preservationists say has historical significance. Despite opposition, Casden has begun the building process by leveling the old retail buildings on' the west side of Glendon.

SANTA MONICA PLACE

Location -- Santa Monica

Tenants -- Retail

Two decades after its construction, the Frank Gehry-designed center has become an anachronism -- an indoor, department store-anchored mall shielding shoppers from the city's temperate climes and ocean views.

In its early days, the mall was a destination for shoppers who didn't want to trek to Westwood or Century City. But that was before the popularity of neighboring Third Street Promenade. Rents are about half that of the promenade and taxable sales fell 14 percent and 11 percent in 2001 and 2002 (versus drops of 3 percent and 2 percent citywide).

Landlord Macerich Co. bought the property from Rouse Co. for $130 million in 1999, and the Santa Monica-based REIT is working on a plan to open up the mall's northern entrance to the three-block promenade. There are also grander ideas, like building underground parking -- instead of those unsightly decks -- and even taking off the roof; But all that is likely to take years.

1100 WILSHIRE BLVD.

Location -- Downtown Los Angeles 

Tenants -- None

GENERALISSIMO Francisco Franco is still dead. And 1100 Wilshire is still empty.

The 330,000-square-foot tower is the only repeat offender from 1999's "The Bad and the Beautiful" roster by remaining without a tenant 17 years after its construction. Situated at Wilshire Boulevard and Bixel Street, just west of the Harbor (110) Freeway, the 37-story structure was developed by Taiwanese developer Tsai Ming Yu.

There was scant occupancy in the late '80s and a deal with the L.A. Department of Water and Power fell through in 1991. The following year, Great Western Bank foreclosed on the property, selling it to Format Corp., a subsidiary of Taiwan-based Formosa Plastics, for $18 million.

With its small, triangular floorplates sitting atop a 17-story parking structure, the property had became more of a target for low-altitude parachuters than office tenants, although the L.A. Unified School District had looked at it as a temporary office site before settling on KPMG Tower. In February, Format hired CB Richard Ellis to market the site as a residential redevelopment opportunity. So far, no takers.

TRANSAMERICA CENTER

Location -- Downtown Los Angeles

Tenants -- Financial, Government Offices

AROHITECT William Pereira created an instant landmark when he designed San Francisco's Transamerica Pyramid. His design for Transamerica in Los Angeles hasn't fared as well.

New Pacific Realty Corp. and the Canyon-Johnson Urban Fund last week announced long-rumored plans to redevelop the 1.4 million-square-foot complex into residential. But what the redevelopment effort really illustrates is how the property never found its footing as an office destination.

Placing it along Olive and 12th streets in 1965. developers misjudged where the office core was headed. Within a decade, Union Bank Plaza, Arco. Plaza and the Security Pacific Bank World Headquarters Building (now BP Plaza) established Bunker Hill as the center of L.A.'s financial district.

Nor have the recent years been kind. Transamerica Corp. has been reducing its space requirement since being acquired by Aegon N.Y. About a third of the space is available -- at 25 percent less than downtown asking rents. Meanwhile, efforts to convert much of the complex into a telecom center in the late '90s stalled out as that market dried up.

CERR1TOS TOWNE CENTER

Location -- Cerritos

Tenants -- Educational Services and Financial Firms

WHEN Transpacific Development Co. moved ahead with its plans to build a 165,000-square-foot spec office building at the Cerritos Towne Center the economy was at the height of the dot-coin boom. Nearly three years later, when .the building finally hit the market, that bubble. has long since deflated and a soft economy that just won't rebound.

It shows, Transpacific, which completed the Class-A building in the fourth quarter of 2002, has only leased up 15 percent of the tower.

At least the bank isn't knocking at the door. Transpacific financed the $32 million project internally, taking out a construction loan toward the end of the project to pay for tenant improvements and broker fees. Until the company can get the building 75 percent leased it won't be able to mortgage the property, to free up the construction funds for some other investments.

The developer remains hopeful that given the number of leases out for signature, as well as letters of intent, the building will be 50 percent leased: this summer.

THE BEAUTIFUL

HOLLYWEST PROMENADE

Location -- Hollywood

Tenants -- Supermarket, Retail, Senior Housing

AT last, a development in Hollywood that seems to be working.

Hollywest is a mixed-use project that opened last year a mile-and-a-half east of the forgettable -- and much higher-profile -- Hollywood & Highland complex.

While 35,000 of its 121,000 square feet of retail space remains available, San Francisco-based developer MacFarlane Partners LLC had locked up Ralphs, Ross Dress for -- Less, Starbucks and Jamba Juice almost a year before last fall's opening. Those are the types of tenants that aren't likely to leave anytime soon. Plus, the 100 senior housing units are long since spoken for.

There were lots of bumps and bruises along the way. Until MacFarlane took over in mid-2001, Ira Smedra had been lead developer on a project that had been delayed by everything from financing difficulties to the construction of the Metro Rail station across the street.

UNIVERSAL SHOPPING PLAZA

Location -- San Gabriel

Tenants -- Supermarket, Restaurants, Retail

SUPERMARKET-anchored complexes have become the centers of activity in the largely Asian communities of the San Gabriel Valley and no center typifies that more than Universal Shopping Plaza.

Built in 1991 by 99 Ranch Market founder Roger Chen, the 220,000-square-foot complex has become a prototype of retail development in the area. Anchored by a 45,000-square-foot 99 Ranch Market, the three-level center filled up quickly by attracting retailers like Diamond Bakery and Evergreen Books, as well as restaurants like Sam Woo Barbecue. The process has repeated itself at other 99 Ranch-anchored centers in L.A. and Orange counties as the Asian community has migrated east and south.

Whereas street front retail near the center on Valley Boulevard just west of Del Mar Avenue will rent for less than $2 a foot, Universal Shopping Plaza space will rent for $2.50 to $3.50 a foot.

BP PLAZA

Location -- Downtown Los Angeles

Tenants -- Financial, Law Firms

THE orange statue by sculptor Alexander Calder fronting BP Plaza is not the only thing that makes the 55-story, 1.4 million-square-foot tower stand out among its Bunker Hill peers.

Over three decades, the granite-clad tower at 333 S. Hope St. has maintained a consistent

tenant roster and occupancy base amid the market's usual ups and downs. The biggest tenant is the super-secret investment firm, Capital Group Cos., which has 230,000 square feet of space. Last month., Bank of America was lured from its longtime Arco Plaza home in a $43 million deal for 169,000 square feet. The bank also gets naming fights.

Designed by A.C. Martin Partners Inc. in 1974 as headquarters of the dearly departed Security Pacific National Bank, the building sits at a 45-degree angle to the street, affording some of the best views of downtown.

Last year, Beacon Capital Partners bought the property from longtime owner MetLife Inc. for $270 million, almost $200 a foot. Of the six Bunker Hill area office properties that have been sold since last March, only Library Tower has traded at a higher level.

HOTEL CASA DEL MAR

Location -- Santa Monica

Tenants -- Hotel

SHUTTERS on the Beach started the resurgence of luxury hotels just south of the Santa Monica Pier, but these days it's hard not to give the edge in luxury, hipness and roominess to the Hotel Casa del Mar, located right across the street.

If you have any doubt, try waiting for your car at both places.

Originally built as a hotel and beach club in 1926, the property had operated as a low-rent hotel and then as a series of diet, longevity and drag rehabilitation centers between World War II and the mid-1990s. Beverly Hills-based Edward Thomas Cos., which also operates Shutters, renovated and restored the Italian Renaissance-designed structure for $60 million.

Reopened as a 129-room hotel in 1999, the Casa del Mar, has been able to maintain occupancy levels in the mid-70 percent range as well as its $300-plus room rates - quite a feat during these troubled times for hotel operators.

On Saturday nights, it's also a happening place for the under-30 crowd as they pretty much take over the mammoth bar and lounge area (although the recently opened Viceroy is providing keen competition on the bar scene).

STAPLES CENTER

Location -- Downtown Los Angeles

Tenants -- Sports and Entertainment Facility

AFTER less than four years, it's hard to A remember downtown L.A. without Staples -- although watching the Lakers win three straight NBA titles since moving from Inglewood hasn't hurt the venue's instant identity.

Developed by Anschutz Entertainment Group for $375 million, Staples already has hosted a wide range of events, from Lakers, Kings and Clippers games to the Grammy Awards and the 2000 Democratic National Convention.

Even the nearby environs have been spruced up a bit, but overall revitalization is a work in progress. Efforts earlier this year by the Anschutz group to develop an NFL-sanctioned stadium were quickly pulled after the first hints of political stonewalling, and a convention center hotel that would be the centerpiece of an entertainment-retail complex is going nowhere fast because of funding problems.

But even all by its lonesome, Staples has made an impression.