An elaborate commercial and residential development designed by Frank Gehry and intended to be sited across the street from his signature Walt Disney Concert Hall could finally get off the ground after a Chinese builder put $290 million into the venture, it was reported Wednesday.
Construction on the $1 billion Grand Avenue Project will begin next year, according to New York developer Related Cos., in part because of its partnership with one of China’s largest state-owned companies, China Communications Construction Group, the Los Angeles Times reported.
The Beijing-based company builds transportation infrastructure such as roads, bridges and tunnels and reports annual revenue of more than $67 billion. The Grand Avenue Project is the initial venture in the U.S. for a subsidiary set up to carry out foreign development.
“For our first project in the U.S. we want to be in a city with a large population and a stable economy,” Vancouver, Canada-based Mark Guo, director of business development for the Singapore subsidiary, called CCCG Overseas Real Estate Ltd., or CORE, said in remarks reported by The Times. “Gateway cities such as Los Angeles are the most attractive targets.”
The Grand Avenue complex of condominiums, apartments, shops, restaurants and a hotel has been delayed several times since 2004, when Related was selected by city and county officials to transform land left mostly vacant since the former residential neighborhood was razed about 50 years ago in an urban renewal program.
But this time, with CORE’s help, Related will finally be able to proceed, said its president, Ken Himmel. “This is a milestone unlike any other in the history of this project,” he said. “It’s a total game changer.”
The $290 million cash injection means Related and CORE have now raised more than $400 million for the project, Himmel said, according to The Times. Typically, real estate developers borrow 70 percent or more of the funds they need to start building.
“This should say to everyone that this project is not over- leveraged,” Himmel said. “It’s a tremendous vote of confidence to see that amount of equity go into the project.”
—City News Service
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