Residential Plans for L.A. Core Heat Up.

Just a week after news surfaced that six more old downtown office buildings are in escrow to be converted into market-rate residential lofts, several more developers have confirmed that they too are acquiring properties in downtown's historic core.

The largest of the new wave of projects, none of which has been publicly announced, involves the proposed conversion of the 97-year-old Pacific Electric Building on Main Street into at least 200 loft apartments.

That project is being pursued by Katell Properties and Capitol Vision Equities, the same duo that is currently developing Chesterfield Square, the first commercial project undertaken in South Central L.A. in more than a decade. The Katell/Capitol Vision partnership is currently in escrow to buy the Pacific Electric Building.

The top floor of the building was once home to the Jonathan Club, which is just one of its architectural advantages, said Jerry Katell, president of Pacific Palisades-based Katell.

"It is a perfect budding," Katell said. "It has a substantial number of parking stalls under the building, which other buildings that have been converted don't have."

The Central City Association, a downtown business group, is now estimating that the rush to build could result in more than 4,200 new or converted apartments by 2004. That estimate is based on the number of properties known by the group to be in escrow or to have been bought by residential developers. It would represent a huge supply of housing to downtown, where fewer than 1,000 people currently reside.

Carol Schatz, executive director of the Central City Association, said the wave of housing represents additional momentum to major downtown projects such as the next phase of Staples Center, Disney Concert Hall, and hotel conversions.

"You're going to begin to see the retail amenities situated down here. A grocery store. More coffee houses. More retail," she said.

But the flood of interest has not yet translated into finished projects, at least not beyond those of Tom Gilmore and Geoff Palmer, the first developers to move into downtown-area housing after the upturn in the economic cycle.

Developers such as Long Beach-based Urban Pacific Real Estate Group LLC that are in escrow to buy downtown properties are not quite in the market yet.

But others are clearly committed.

For example, Portland, Ore.-based developer GSL Properties is moving forward on the 200-unit apartment complex it is proposing to build from scratch on a site just west of the Harbor (110) Freeway and south of Good Samaritan Hospital, near the new Medici apartments.

And Greg Schem, managing partner at Elkor Realty Corp., which specializes in rehabilitating apartments, said Elkor is in escrow to buy a six-story building at 121 E. Sixth St. for conversion into as many as 95 units.

"We've got a number of proposals out," Schem said. "We think it's a great opportunity given the demand for loft creative-artist housing downtown. But we haven't closed on anything."

Schem conceded that moving into downtown now may not be the home run everyone is hoping for.

"I'm not sure there's all that much activity when it really comes down to it," Schem said. "There's really just two or three players. I think it's a really thinly traded market right now. Where it shakes out, how big an investment we ultimately make in downtown L.A. is really up in the air at the moment."

Still, it's not just conversion work. GSL Properties has plans to build 200 apartments just a few blocks from where the next phase of G.H. Palmer Associates' Medici apartments is set to go up. David Bantz, GSL's development manager, said the area west of the Harbor (110) Freeway is more attractive for development thanks in part to the Medici apartments.

"That Medici project has really pushed some of the development to the west side of the freeway," Bantz said.

GSL has done urban renewal projects in downtown Portland, the latest being a 15-story residential highrise. This marks GSL's first foray into the Southern California market.

Its project, called the San Lucas, would be mostly studios and one-bedroom units with sub-$600 monthly rents, and 25 two-bedroom units. GSL is planning two five-story buildings connected by underground parking. If it moves forward as planned, the project would be completed in summer 2002.

"We certainly think there's going to be a demand for these," Bantz said. "There's lots of units in this rent range, but they aren't new."

There are a number of other project proposals being floated, including

conversions like System Property Development Co.'s idea of creating loft-style apartments at the Subway Terminal Building, plus new construction such as Forest City Residential West Inc.'s plan to build a 200-unit loft project at 11th and flower streets.