Public-private partnership eyes MacArthur Park.

RTD, Forest City plan $100 mil. mixed-use project

By the year 2000, the Southern California Rapid Transit District hopes to achieve what Los Angeles City Hall and the private sector never could: the transformation of MacArthur Park from a crime-infested, inner-city enclave into a bustling urban village.

If district officials get their way, a joint development agreement with a private builder will be inked and the RTD will have trailblazed one of the first government-business partnerships along Los Angeles' fledgling subway system.

"If you're going to change the city with a subway, you must take responsibility for what you leave in its path," said Karen Heit, the district's supervising planner. "It's common sense."

Late last September, the RTD board entered into an exclusive negotiation period with Forest City Development to determine the feasibility of Forest City building the proposed 12-acre project. Should it pencil out financially and receive all the needed city and state permits, the project would sit atop an underground Metro Rail station slated to debut when the subway opens early next year.

Construction on the so-called Westlake/MacArthur Park development would begin in earnest in 1993 or 1994 and wrap up around the year 2000 if all three tiers are built. The district-Forest City talks will likely end in December.

"This will be a public-private partnership that is innovative in addressing housing needs, economic development and quality of life," said RTD board member Nick Patsaouras, who has been championing mixed-use development along rail lines since the mid-1980s. "We have an obligation to the taxpayers to invest their money in best way we can."

Situated just west of downtown in the Pico Union neighborhood, the proposed development would be bounded by Seventh Street to the south, Wilshire Boulevard to the north, Bonnie Brae Street to the east and Alvarado Street to the west. Still, for a host or reasons, breathing new life into the MacArthur Park region could be an uphill road for the RTD, the Southland's bus agency.

First, as RTD officials admit, the proposed development is an ambitious endeavor in any economy. Preliminary blueprints calls for 280,000 square feet of office space, 230,000 square feet of retail space, 20,000 square feet for a community center and space for 300 affordably priced apartment units. Cost estimates for the three-tiered project range from $60 million to $100 million.

Next comes the issue of financing -- a major uncertainty in a Los Angeles real estate market suffering through its worst slump in decades.

But the greatest challenge, many believe, will be finding ways to make the area safe for subway passengers, entrepreneurs and customers.

Once a sleepy weekend recreational spot where families picnicked and took paddle boat rides on the lake, the MacArthur Park area during the last decade has degenerated into a magnet for the homeless, transients, drug dealers and petty gamblers, authorities concede.

"It got to a point where we stopped hassling (suspected criminals) because of the sheer volume of the problems," said Gerry Sola, a community relations officer with the Los Angeles Police Department's Rampart Division. "And you certainly didn't see many families hanging out there."

For the time being, the crime problem has been largely halted because subway construction workers have fenced off the park and lake. But there are other troubles as well.

Pico Union's population is predominantly Hispanic, with an unemployment rate between 50 and 80 percent -- a fact attributed to the large number of illegal aliens who call Pico Union their temporary home, Sola said. Past attempts to rid the park area of crime by the city, community groups and police have all generally failed, he added.

Meanwhile, most of the businesses around the park are mom-and-pop-type clothing, appliance, toy and grocery stores. The largest establishment is a Thrifty drug store.

And what few realize, police say, was that Pico Union was whacked hard by April's riot, even though South Central Los Angeles and Koreatown got the lion's share of attention. Damage in Pico Union is estimated conservatively at $30 million to repair the 86 structures that were either torched or looted.

Heit, the RTD planner, said the project's success rests on the district's ability to give area residents a "sense of ownership and pride" in the development. Establishing a minority business enterprise program -- a place where street vendors can sell their wares and a community congregation point -- are critical, she said.

Until 1990, the RTD was the lead agency overseeing the 17-mile Metro Rail system and had purchased land for planned subway depots around the city. Two years ago, after a bitter fight with the RTD, the Los Angeles County Transportation Commission won control of the $4 billion Metro Rail project. However, because the RTD had already started planning the MacArthur Park terminal, it maintained power over that station's destiny.

(RTD officials will operate the subway once it is up and running, just like it does the Los Angeles-to-Long Beach Blue Line.)

According to the district's conceptual plans, the project will be something akin to an urban "village center," with a focus on the transit user and pedestrian-customer safety. With that in mind, officials want the subway portals located near ground-floor shops, a police substation inside the retail section, well-lit open spaces and plazas and clear separation between commercial and residential uses.

Barring a turnaround in the commercial real estate picture, office space at the project would be targeted initially for doctors and health care-related businesses and later at government agencies.

Retail, on the other hand, would focus on two elements: goods for subway riders and products aimed at community residents.

Near the depot itself, planners envision fast food and convenience stores, card shops and newsstands.

Farther away, Heit and company want a mid-size grocery store, perhaps tailored to a Central American/Hispanic format, anchoring the community retail shops. Adjacent to the market would be a pharmacy, specialty stores, ethnic restaurants and possibly a multi-screen movie theater.

Again, warns Heit, safety and "user-friendliness" are key.

"If we have a station where people are afraid to come out, we're not doing the system any favors," Heit added. "We have to make the area inviting as a destination for the rider and for residents, a place they can spend an afternoon, shopping or going to see a film.

To make the deal inviting to a developer like Forest City, the RTD may offer to shoulder some of the financial burden.

Since it already holds title to much of the land, the district could apply for tax-exempt or low-interest financing available to public agencies, vastly lowering the loan payments that it and a developer would have to make under a joint-equity agreement, Patsaouras said. Likewise, the RTD could apply for a state tax credit allowed when affordable housing is built.

Details spelling out the up-front costs each side must cough up, as well as the revenues they would share from rent and property-value increases, will be addressed during the 120-day negotiation period.

"Obviously we have a lot of things to explore," said Steve Albert, president of Forest City's West Coast operations. "In this (economic) environment, we will need all the horsepower we can get."

Albert said, though the L.A. office market remains "tough," the demand for retail space is fairly stable.

Patsaouras, who also sits on the LACTC board and is a potential 1993 Los Angeles mayoral candidate, says the Westlake/MacArthur Park project is important for another reason besides revitalizing part of Pico Union. It could set a precedent for other joint development deals taking shape along Metro Rail's path.

After more than nine months of bureaucratic indecision and squabbling, Patsaouras earlier this year was able to convince the three main government players -- the LACTC and the city's Planning Department and Community Redevelopment Agency -- to form a standing committee to master plan other potential joint development deals near Metro Rail depots.

The result of that master planning has been blueprints, in various stages of completion, for public-private ventures above subway stations coming to Hollywood Boulevard and to the Mid-Cities area to the south.

The RTD, in its only other concrete joint-development deal, is working with Catellus Development Corp. to build the district's new $120 million office complex near downtown Los Angeles' Union Station.

"If we don't do things to improve the area around Metro Rail," Patsaouras concluded, "we'll have failed" to capitalize on our investment.