Meeting_Body
PLANNING AND PROGRAMMING COMMITTEE
FEBRUARY 19, 2020
Subject
SUBJECT: WESTLAKE/MACARTHUR PARK JOINT DEVELOPMENT
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer (“CEO”) to execute a short-term Exclusive Negotiations Agreement and Planning Document (“ENA”) with the Walter J Company (“Proposer”) for the joint development of Metro-owned property at the Westlake/MacArthur Park Station (“Site”) for a period of six months, with an option to extend up to three additional months.
Issue
ISSUE
Staff have completed evaluation of an Unsolicited Joint Development Proposal (“Conceptual Proposal”) for development of the Metro-owned property at the Site along with adjacent property under the control of the Proposer. Staff have determined that the proposal to develop Metro’s property may yield significant affordable housing, community benefits and improvements surrounding the Site, and recommends entering into a short-term ENA to further refine the proposal with additional stakeholder and community input prior to considering entering into a full-term ENA with the Proposer.
Background
BACKGROUND
On December 22, 2017, Metro received a Conceptual Proposal from the Proposer. In accordance with the Joint Development Unsolicited Proposals Policy (“JD UP Policy”), an evaluation committee made up of Metro staff from Joint Development, Operations, and Program Management reviewed the Conceptual Proposal and determined that it warranted additional consideration. After receiving CEO approval to proceed in February 2018, the Proposer was invited to submit a Phase 2 proposal (“Detailed Proposal”). After several phases of evaluation, the committee recommended advancing the proposal to the CEO. On June 14, 2019, per Federal Transit Administration requirements, Metro published its interest in the joint development of the Site for a 30-day period and ultimately recommended moving forward with the Proposer.
Discussion
DISCUSSION
The Conceptual Proposal includes the redevelopment of the existing Metro plaza in conjunction with the construction of high-rise buildings on two adjacent lots owned by the Proposer (see Attachment A). The plaza redevelopment will enhance connectivity and transit access at the Site while providing additional residential, commercial, and community space. The towers will provide housing and space for hotel units. In total, this transit-oriented development proposes:
• 665 residential units, with 120 units of affordable housing
• 252 hotel rooms
• 67,791 square feet of commercial space, and 75,679 square feet of open space amenities
• Significant enhancements to the Metro plaza promoting activation and connectivity of the station area
• A cooperative marketplace designed to support local artisans and vendors, with 20% of the commercial or retail floor area dedicated to minority-owned businesses and businesses that are owned and operated by Westlake/MacArthur Park District residents
Findings
The evaluation committee concluded that the Conceptual Proposal offers significant Transit Oriented Community (“TOC”) benefits that would not be possible if the development were to proceed without Metro’s property. Nor would it be possible for Metro to achieve the same degree of TOC benefits were the property to be developed on its own. From 2002 to 2017, Metro has been in various stages of negotiation for development of the Metro property at the station. These negotiations ended when it became clear that appropriate transit-oriented development was infeasible without using adjacent property as further discussed below. Staff’s analysis of the proposal indicates that the total value of development would be substantial enough that combining Metro and adjacent private property could overcome these hurdles.
Upon completing the review of the Conceptual Proposal, the committee recommended that it be advanced for the following key reasons:
1. Adjacent land enables a more substantial development project to overcome the challenges of a complex site: The Metro-owned property at the Site is constrained by two station portals, an elevator, vent shafts, and a shallow station box that runs diagonal below the site. These physical constraints make it challenging to build above the station and deliver transit-supportive densities. A prior JD project was recently terminated in part due to the inability of the developer to deliver a financially feasible and desirable project given the Site’s constraints. The Proposer’s two adjacent properties, combined with the Metro-owned property, create a unique opportunity to span the station box and provide a mixed-use project with a significant number of housing units adjacent to transit.
2. Affordable Housing Provision: Metro’s JD Policy sets a goal for 35% of the total housing units in the Metro Joint Development portfolio to be affordable for residents earning 60% or less of the Area Median Income (“AMI”). The Proposal would provide 120 affordable housing units (18% of total housing units) on the combined site. Including Metro’s property allows the Proposer to increase the project’s overall floor area ratio making it possible to build more affordable and market rate units than if the Metro property were to be developed on its own.
3. Developer Team Experience with Metro: The Proposer’s team has experience working with complex development sites and constructing over Metro subway portals. The Proposer’s team architect designed and developed Solair, a mixed-use 22-story condo project above the Wilshire/Western station entrance.
4. Recent Community Experience: The Proposer’s team has experience working with the MacArthur Park community. They will soon be breaking ground on a 41-story residential project with cultural/performance space at 1930 Wilshire, which is around the corner from the Site.
Short-Term ENA Deliverables
After careful consideration, the proposal has several areas that staff believes need to be addressed before moving forward with a full-term ENA. This includes requiring the developer to conduct initial community outreach to solicit input on the proposal and considering potential refinements to the project scope including the housing composition, parking quantities, and design integration with adjacent development opportunities. In addition, addressing concerns about gentrification and ensuring the protection of Metro’s subsurface infrastructure will be critical. The short-term ENA will serve as an interim step that will allow the parties to directly communicate and address these areas of concern.
Equity Platform
Partnering to build a transit-oriented development with affordable housing falls into Pillar III-Focus and Deliver, of the Equity Platform by supporting affordable housing in an Equity Focused Community (as defined in the Values Framework of the Long-Range Transportation Plan update).
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
Approval of this item will have no impact on safety. Operations staff will review and comment on the proposed development to ensure that the proposal will have no adverse impact on the Westlake/MacArthur Park Station, portal and public-serving areas on Metro’s property. In addition, the eventual implementation of this Joint Development project will offer opportunities to improve safety for transit riders through better pedestrian, bicycle, and mobility connections.
Financial_Impact
FINANCIAL IMPACT
Adoption of the ENA would have no significant financial impact to the agency.
Impact to Budget
Funding for the Joint Development activities related to the ENA and the proposed project is included in the FY20 budget in Cost Center 2210, Project 401038.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
The proposed project allows for a development that is in line with Goal 3 of the Strategic Plan, enhancing communities and lives through mobility and access to opportunity. The addition of affordable housing and community spaces adjacent to transit will increase ridership and activate the station area enhancing the community and the lives of community members through mobility and access to opportunity.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The Board could choose not to proceed with the recommended action and could direct staff to seek new development options via a competitive process. Staff does not recommend proceeding with these alternatives as the Proposal will yield greater affordable housing and TOC benefits than Metro would be able to achieve with its property alone.
Next_Steps
NEXT STEPS
Upon Board approval of the recommended action, staff will execute the short-term ENA and Metro staff and the Proposer will commence preliminary negotiations in parallel with community outreach to engage stakeholders in a dialog about the development proposal and address the mentioned areas of the proposal that require refinement before returning to the Board to request a full-term ENA.
Attachments
ATTACHMENTS
Attachment A - Project Site Plan
Attachment B - Proposed Project Rendering
Prepared_by
Prepared by: Olivia Segura, Senior Manager, Countywide Planning & Development, (213) 922-7156
Wells Lawson, Senior Director, Countywide Planning & Development, (213) 922-7217
Nick Saponara, DEO, Countywide Planning & Development, (213) 922-4313
Holly Rockwell, SEO - Real Estate, Transit Oriented Communities and Transportation Demand
Reviewed_By
Reviewed by: James de la Loza, Chief Planning Officer, (213) 922-2920
