Soft Market Pushes Back Craft Museum’s Home Plan

Harder-to-get loans and investor reluctance in a slumping real estate market have caused officials at the Craft and Folk Arts Museum to push back from 1992 to 1994 the projected completion of a proposed mixed-use museum home.

Officials say the delay will not affect their ability to operate the multicultural museum or to get exhibits. It has been in the Wilshire-Fairfax May Co. building since 1989, when museum officials moved it out of its Miracle Mile home because that building was not up to earthquake code.

Since the move, the museum and its developer, Ratkovich Co., have run into a soft real estate market. These days, museum officials said, banks and other investors weary of the poor market want more money up front if they are to back the project, which is planned to include condominiums and shops.

“The criteria for lending has changed” since the plans for a new museum home were announced in 1990, said museum director Patrick Ela. “In the late 1980s, one could build with 10% equity, now you sometimes have to have 40% down.”

In response, Ratkovich Co. has recently put on hold its search for loans until the stricter loan requirements are rolled back or until investors who can front the extra cash are found.

Cliff Ratkovich, the venture’s manager, said he has had promising meetings with several investors. “This project is in a good position to receive financing when the market improves,” he said.

The plan would integrate 66 condominiums and a number of shops as “an economic engine” to cover construction and design costs. The museum has raised $7 million of the $12 million needed to build its portion of the venture.

The 22-story mixed-use project is slated for the museum’s former home at Curson Avenue on Wilshire Boulevard’s Miracle Mile and would give the museum 57,000 square feet, including 15,000 square feet of exhibition space.

Ratkovich said the two-year delay will mean a slight retooling of the project’s conceptual plans. Ratkovich Co. has used the extra time, for example, to add more condominiums, which Ratkovich said would make the project more attractive to investors.

The 18-year-old museum, established to promote multicultural crafts and folk art, moved its exhibition hall to the fourth floor of the May Co. building in 1989 because its Miracle Mile site was not up to earthquake code standards. Museum officials also had in mind plans to redevelop the old site because, they said, its 8,000 square feet just weren’t enough to house its displays.

May Co., California spokesman James R. Watterson said the department store has agreed to allow the museum to stay until the scheduled opening of its new home.