Looking at Greenland's giant Metropolis project in Los Angeles: distinct logo, cascading design, finances in flux (which means sales)
Then again, Greenland USA may not be finishing it, and that's something for Brooklynites watching Pacific Park to ponder, since the developer, an arm of Shanghai-based Greenland Holding Co., is now marketing two properties within the project: the finished hotel, as well as the under-construction tallest tower.
The site, a former parking lot, is just east of a freeway, and not far north of the entertainment district that contains the Staples Center and L.A. Live. It's far less of a neighborhood than the Pacific Park site in Brooklyn.
The hotel and the first tower opened last year, and the full project is huge, some 3.5 million square feet over 6.33 acres. (Atlantic Yards/Pacific Park is 8 million square feet over 22 acres, but it nudges into established residential districts.)
In a brief visit to Los Angeles last week, I took a gander at Metropolis. The buildings are impressive in a giant-but-bland way, though I suspect the cascading skyline--as noted in the press release--and the shimmering facades (to freeway drivers) will ultimately be more distinctive.
|View from the south|
I was struck by the discreet but distinct logos for Greenland USA--click on the photo at left to enlarge and compare to the image below--and wondered if/when Greenland logos would appear on Atlantic Yards/Pacific Park buildings.
Greenland selling LA hotel
Greenland, the Real Deal reported 2/1/18, is selling the 350-room Indigo Hotel, relying on CoStar, which suggested that the developer may need the money to finish the project.
The reported asking price--some $280 million, or $800,000--would set a new per-room record for a hotel in downtown Los Angeles. The sale, the Real Deal suggested, relates to pressure from Chinese authorities to limit overseas investments.
|View from the southeast; unfinished tower at far right|
The reporting suggests a miscalculation on the developer's part. The Los Angeles Times reported 7/13/17:
U.S. developers would typically space out a big-scale project like Metropolis over several years to make sure the market could gradually absorb the new space, but Greenland moved as fast as it could to try to replicate the speed it is accustomed to building with in China.
|Looking from east|
In Los Angeles, Greenland has already changed real-estate agents for condo sales, trading Douglas Elliman for the Agency. (In Brooklyn, Greenland Forest City Partners traded Corcoran Sunshine for Nest Seekers' Ryan Serhant.)
Greenland selling unbuilt LA tower
On 2/20/18, CoStar reported another twist in the saga: Greenland USA is selling the unfinished 56-story tower, which would have 736 units, nearly half the total allotment. While the price is undisclosed, CoStar's source said Greenland is seeking about $450 million, which would be a discount.
And the building would not be condos, but rather rentals, according to CoStar, which, acknowledging Greenland's motives were unclear, again suggested this rationale:
However, a push by the Chinese government to limit capital outflow by its domestic companies is believed by many market observers to be curbing the ability of many Chinese firms to move forward on anticipated real estate projects.Greenland in flux, in New York?
The possible conversion of 1,500 condos to rentals, as well as the potential building sales, reminds us that it is not uncommon for real-estate projects to change and morph. (Remember, 8 Spruce Street, Forest City's Frank Gehry-designed tower, was originally supposed to include condos, but emerged with rentals.)
So Atlantic Yards/Pacific Park, which has already gone through some gyrations and changes--remember the original plan for four office buildings--surely will go through more. After all, we already know of the plan, not yet advanced, to move the bulk of the unbuilt B1 (aka Miss Brooklyn) tower over the arena plaza to Site 5, catercorner to the arena.
What we don't know is what other changes are coming.
Also, we know that Forest City New York is selling 461 Dean, the modular tower (and the only building it owns outright), and that the joint venture Greenland Forest City Partners tried, without success, to sell three development sites: B4, B12, and B13.
But if Greenland needs the money, maybe more sales are coming. Greenland in 2014 bought 70% of the project going forward. The joint venture built three towers (535 Carlton and 38 Sixth, both 100% affordable, and 550 Vanderbilt).
Greenland soon will own 95% of the remaining share (excepting those previously built sites) after the latest transaction closes.
It could sell pieces of future development sites. Perhaps it could, as 70% owner, engineer the sale of the three towers built by the joint venture. If so, the condo building 550 Vanderbilt would deliver the most money.
It raises a question: should New York State approve the latest sale without assessing whether, in fact, Greenland intends to finish the project?
Greenland: from speed to restraint?
All in all, it's a far cry from what the Wall Street Journal suggested in August 2014, just 3.5 years ago, that Greenland could move far faster than developers in the United States, because it had sufficient equity on hand to start projects without raising additional financing.
"They have a very determined agenda," Forest City Ratner CEO MaryAnne Gilmartin said at the time. "In many ways, they're a dream partner—they understand our business, they want to build quickly and they have the equity."
Maybe not so much any more. So it's again worth recalling a warning at a 3/28/14 board meeting of Empire State Development, the gubernatorial-directed authority that oversees and shepherds Atlantic Yards/Pacific Park.
Gib Veconi of the Prospect Heights Neighborhood Development Council focused on the state’s failure to consider the option of bringing in other developers for Atlantic Yards, which had not yet been renamed Pacific Park.
The pending Greenland transaction would not represent a multiple-developer strategy, Veconi observed, but rather a single-source development project, one "under the control of a partner exposed to one of the world’s most volatile economies.”
The volatility has continued.