This morning the Grand Avenue Authority granted a series of extensions for the Related Group to finish their construction documents and get their financing in place. Construction is now scheduled to begin in February 2009. If financing can not be obtained by then, then monthly extensions will be granted for up to two years and monthly payments will be made by Related of $250,000.
A 30 million dollar completion bond is also going to be posted by Related, part in cash and part via letters of credit and language prioritizing the affordable component of the project proposed by Jan Perry is also being added to the extension document.
Finally, if no financing can be had by February 2011, then the Authority is under no legal obligation to give any further extensions. But if the Authority finds that other projects of a similar size are also unable to get financing, they will have the right but not the obligation, to enter into negotiations for another extension.
This way Related can deal with the lending market without having to constantly come back for extensions should the present dismal lending market get even worse in the short term. But it also sets guidelines on how long such extensions can be granted. This now resolved, the Authority can concentrate upon the development of the park (which will not be delayed by this extension) and the creation of a 501c3 to both fund raise, plan and run the park.
Lastly, in the public comment section of the agenda, I pointed out that in the history of public/private partnerships - and all major projects - in Downtown Los Angeles - dating back over a half-century - this project has moved faster and with fewer delays that any project it's size. It's also moved faster than most projects a fraction of its size. Added to that, virtually all of the delays are due to factors totally beyond the control of the developer.
First there was an extensive public outreach process, then a lengthy and much debated EIR review, then came a lawsuit over the hotel, then came the collapse of the credit markets which made it hard to get any finance, and lastly - then came the new lending requirements that 80% of the construction documents have to be completed prior to getting loan approval.
And any developer on any project this size would have needed to delay any project for these reasons just as any major project always has delays from the original deadlines no matter what the environment is.
But these facts makes the carping over the much touted delays even more perplexing, since virtually every major project that has been public/private to any extent has taken over ten years to get going and sometimes 20 years or longer! But no one seems to have the institutional memory to know this.
Staring with the overall Bunker Hill project - the initial planning for that started in the 1930's and 1940's, the serious planning began in the 1950's and the building didn't begin until the 1960's. The Music Center project started in the mid-1950s and didn't open until the the mid-late 1960's. The other big Grand Avenue Project, Cal Plaza, stated in the 1970's - and still isn't finished almost 30 years later.
Disney Hall started in the 1980's but didn't open until the following century. Even a project like a simple supermarket - Ralphs - took well over ten years. And the infamous new Convention Center hotel - well, that started in the 1970's, then fell apart, then picked up steam again in 1980's - then fell apart again, then started again in the 1990's, then fell apart, then in this century it went from private to public/private to private with public assistance - and with multiple partners in and out of the deal - and it is still not finished.
And here, in contrast, we have one developer, one plan that is almost unchanged - and a few comparatively minor delays due - totally - to outside forces beyond the developer's control.
But you would never know that from reading the press.
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