Downtown Cultural Buildup Is Driving L.A.

Follow the money in Los Angeles these days, and there’s a good chance you’ll wind up at a concert or a ballgame or in a flat downtown, gazing out at the twinkling skyline.

Just a couple of weeks ago, Denver billionaire Philip Anschutz’s firm AEG announced that it was about to kick off work on a $1-billion commercial development around Staples Center, which it owns. The complex will boast hotels, theaters, restaurants and stores across the street from the arena, replacing a string of parking lots that sit there now.

A mile or so north of Staples, billionaire financier and onetime home builder Eli Broad, real estate executive James Thomas and Los Angeles County’s redevelopment agency are preparing to build the Grand Avenue Project. The undertaking will include $300 million in public parks and roadways along with $900 million in residential and commercial properties.

Meanwhile, more than 5,000 apartments and condominium units are being developed in downtown L.A., just as these entertainment projects are preparing to break ground.

So, what’s going on here?

Throw in Walt Disney Concert Hall, the California Science Center, the Cathedral of Our Lady of the Angels and other sites, and you begin to notice the revival of an urban core in which, as Broad says, “cultural tourism” is the key.

Historian Kevin Starr, author of five books on California with a sixth on the way, takes the long view -- backward and forward. He sees what’s unfolding downtown both as “a resurrection of history” for the 223-year-old city as well as a bold step into the future.

“This is a daring postmodernist experiment,” Starr says, “that must have strong economic and pleasure-oriented underpinnings to succeed.”

Already, some of the savviest investors in town are convinced that’s happening.

“Asian tourism has been slipping,” says Tim Leiweke, president of AEG, “but now we are renewing the attractions.”

Using culture -- highbrow and low -- as an economic driver is different from the way cities have traditionally evolved. The old model, the one that Los Angeles followed into the early 1960s, featured large corporate offices and banks located at the center, where men (and it was always men) could meet and conduct business.

But that model died, not only because people fanned out to live in suburbs but also because modern computing and communications decentralized economic life.

Nowhere was this trend more powerful than in Los Angeles. The city lost almost all its big banks and corporate headquarters but today serves as home to more small and medium-size companies than anywhere else in the country.

Now suddenly people are flocking back. “The reversal of suburbanization is real,” says developer Dan Rosenfeld of Urban Partners, which is working on a variety of projects downtown.

Yet what’s luring people this time isn’t commerce, although commercial real estate also is on the rebound, as evidenced by the impressive sales price paid last week by Trizec Properties Inc. for the old Security Pacific bank building on Hope Street.

The main impetus -- for younger folks and empty- nesters alike -- is entertainment. “The attractions are the social and cultural amenities, restaurants, theaters,” Rosenfeld says. “It’s nice to be among people.”

Downtown Los Angeles is not just any place, either.

“You buy food in your neighborhood and your clothes at a local mall,” Rosenfeld says, “but you come downtown for the one-of-a-kind attractions -- the Lakers and Kings at Staples or concerts at Disney Hall.”

Jeff Lee of Lee Group, which has built and sold 91 condominium units in the Flower Street Lofts in the last two years, points out that property values are rising and residents are happy: “My buyers hear of the Staples extension and say, ‘We were early and we were right.’”

In formerly dingy downtown streets, the old office buildings that developer Tom Gilmore has converted into apartments had been purchased in the 1990s for $4 to $8 a square foot. Today, they are worth $50 to $70 a square foot.

Buildings near Transamerica Center were fetching $50 a square foot in 2001. They are going for $150 now.

For men like Broad, such numbers represent a vindication of a vision long in the making. “Finally,” he says, “Los Angeles will be the center of a region of 15 million people.”

Actually, that may be overstating things a bit. Given the nature of our sprawling metropolis, it is unrealistic to expect that downtown will ever become the place to go. But it is quickly turning into a place to go -- a destination equal in its drawing power to Santa Monica or Westwood or any of the other hubs in this vast region.

And that in itself marks a big change -- socially, culturally and economically.

*

James Flanigan can be reached at jim.flanigan @latimes.com. For previous columns, go to latimes.com /flanigan.