L.A. Live Project has Friends in High Places

Posted by: Chris Palmeri on December 4, 2008

LA LIVE.JPG

L.A Live is having a grand opening tonight. The $2.5 billion “content campus” adjacent to the convention center in downtown Los Angeles will feature a couple of concert halls, an ESPN Zone/broadcast studio, a bowling alley, movie theaters and ten restaurants. There is also a music industry themed Grammy Museum. The complex is being called Los Angeles’ Times Square.

The project will also feature 224 luxury condominiums on the top floors of a 54-story Ritz-Carlton hotel that will open in early 2010. Tim Leiwicke, who runs the site’s developer Anschutz Entertainment Group (AEG), says 140 of the condos are sold. They start at $1.1 million for 1,000 square feet. Asked who the buyers are he said local businesses looking for a corporate suite, some wealthy foreigners from Mexico and the Middle East, fans of the L.A. Lakers basketball team which plays in the AEG-owned Staples Center across the street, and parents of kids who go to the University of Southern California down the road.

Other notable residents will include Lakers star Kobe Bryant, soccer great David Beckham (who plays for the Anschutz-owned L.A. Galaxy team) and California Governor Arnold Schwarzenegger. Beckham reportedly paid $8 million for a 3,000 square foot pad. Leiwicke will live there as well. He paid $1.8 million for his two bedroom unit.

Leiwicke said he hasn’t lowered the asking prices on the condos although a number of downtown residential projects have either switched to rental units or sharply cut their prices amidst the housing slump. Leiwicke says he isn’t even actively marketing the properties. He said he’s got a six figure advertising budget but isn’t using it because he thinks it’s just not the time to be selling luxury real estate. Leiwicke can afford to take his time because L.A. Live is ultimately owned by Denver billionaire Phil Anschutz, an investor known for waiting patiently for long shot bets to pay off.

Despite its deep-pocketed benefactor, L.A. Live hasn’t been shy about asking for favors from the government. Last year AEG lobbied successfully to secure money from a $50 million state fund intended to help the homeless. The company is using it for street improvements around L.A. Live. This year AEG sought to get state legislators to lift a ban on electronic billboards alongside highways so they could put some up near the project. That effort was shot down in September. According to the Los Angeles Times, executives affiliated with Anschutz have given $2.7 million to state political funds, including $583,000 to the governor’s campaigns. With friends like that no wonder the Terminator’s moving in.

Reader Comments

BusinessWeek Economics Editor Peter Coy

December 4, 2008 3:16 PM

Passing along this reax to Chris's post from a p.r. person for PMI:

In his post, Chris refers to borrowers frustrated with handling foreclosure through a different bank than originally issued the loan. The volatility of subprime loans and adjustable rate mortgages has led to repurchasing and movement of troubled assets, meaning that some borrowers entering foreclosure won’t deal with their original lender. In these cases, it can be difficult to find the contact information for an appropriate person to speak with or to navigate the maze of banks that have acquired each other.

PMI Group (www.pmi-us.com) has a free educational resource for struggling homeowners at Home Safe PMI (www.homesafepmi.com), part of the Hope Now Alliance (www.hopenow.com) of foreclosure prevention resources. We have several sections that can arm your readers with vital information and strategies to make foreclosure more manageable:

Our Get Help section (http://homesafepmi.com/gethelp.html) offers one of the most comprehensive lists of lender and bank contact numbers and websites available online. This includes a list of non-profit foreclosure prevention organizations with 24 hour help lines.

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Our Q&A section (http://homesafepmi.com/qa.html) offers basic information on how foreclosure impacts your credit score, what first steps to take and how to protect yourself from distressing collection practices

We also offer video walkthroughs of mortgage workout programs, short-sale solutions to foreclosure and general advice on managing the sale of your home and seeking a new residence that makes sense for your budget and income.

Snoz

December 4, 2008 4:58 PM

LA Live is DOA because Downtown LA is dead. It is dead because homelessness, lawlessness, and residentless. The poor huddle masses from all walks of life congregate in downtown LA for free shelters at charity organizations or at freeway underpass. In the early evening, they line-up for food handouts; at night the desperate cruise for sex and the drug scene. Because of high unemployment and the survival instinct among the destitutes, major to petty crimes abound in downtown LA. No sane person would want to make downtown LA his permanent residence. Consequently, there are no major food retailers such as Vons, Ralphs, or StaterBros in Downtown LA. Only in your dreams will you find retailers such as Gelson's, Nordstrom, Saks Fifth, Chanel, Armani,etc in LA. What you will find at any time of day are graffti, garbage, walking zombies, unlicense pharmacist and hookers. It is not surprising that Major department stores had left LA decades ago for better suburban pastures. Downtown LA is like the whores who patrol its creepier streets. It gets used, abused and abandoned. Policemen, firemen, office workers, and government workers live in the comfy suburbs like Simi Valley, San Fernando Valley, or San Gabriel Valley, but trek down to use and abuse downtown LA for their pleasure safely and quickly departing by 5PM. Despite receiving hundred of millions of taxpayer's CRA dollars for the past 30 years, downtown LA remain a blighted area, a black hole that sucks up precious resources. The Staple Center, conceived as a catalyst for the revitalization of Olympic-Figueroa and vicinity, has failed its collateral purpose. Rather, it has reinforced the practice that people come to downtown LA to get their kicks in various sport entertainment and then a quick departure. Just as the Staple Center has serviced the sport clients a la "Wam Bang thank you LA," so will LA Live. "White flight," "Brain flight," and "Money flight," have abandoned downtown LA long ago, leaving it to the various minorities to cope with never ending fiscal crisis, escalating crime rate, and police-and- politician corruptions. Welcome to southern California, the land of milk-and-honey, just as some real estate developers would want you to believe.

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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