Downtown Real Estate Players Praise Plan to Streamline Permitting
When it comes to building housing complexes and other projects in Los Angeles, there’s one word, often preceded by an eye roll, that tumbles out of developers’ mouths: bureaucracy.
Business officials have complained for decades about a lengthy and cumbersome city permitting process, saying it unnecessarily delays projects and raises costs. Although government officials have pledged to tackle the matter numerous times, few in the real estate industry say things have improved.
Now, there is another effort to streamline the permitting process for large projects. Mayor Eric Garcetti recently launched the Inspection Case Management Initiative, which is intended to reduce construction times and costs for 600 projects a year citywide. The effort is drawing initial praise from developers in Downtown Los Angeles and beyond.
Garcetti hopes the program will shorten project completion times by three to six months. It would apply to all developments with a budget of $10 million or more.
That would be a relief to people such as Tom Warren, head of Holland Partner Group’s Southern California division, which has built several Downtown projects, and in June broke ground on a $200 million effort dubbed Sixth and Bixel that will bring 648 apartments and 25,000 square feet of retail and commercial space to City West.
“It is a real challenge to secure permits in this town,” said Warren.
The Vancouver, Wash.-based company also recently purchased a parking lot atEighth and Spring streets. Plans call for a 24-story project with 320 apartments and ground-floor retail.
One enduring problem, Warren and others say, is that developers have to navigate numerous departments with disparate missions, and the offices can give conflicting directions. For example, Building and Safety has different concerns than the Planning department.
Under Garcetti’s initiative, the Department of Building and Safety would dedicate one case manager to each project valued at more than $10 million to coordinate inspections among departments.
Currently, 19 projects worth a combined $916 million are utilizing or have benefitted from the program. Downtown developments on the list include the housing complex G-12, the mixed-use effort The Bloc and the South Park mega-project Metropolis.
“This back-to-basics initiative cuts red tape and increases customer service to make L.A. more attractive to investments that create jobs,” Garcetti said in a prepared statement announcing the effort. “When you’re investing in L.A., City Hall should be there to help you and not add delays to your work order.”
From Project Inception to Occupancy Quicker
Ashley Atkinson, Garcetti’s planning and housing specialist, said this marks the first time the Department of Building and Safety has offered a service like this. Previously, she said, the developers had to manage the complicated construction inspection process, including making sure that the right inspectors were on site at the right times.
Now, she said, “clients will have one point of contact in the department to help manage this process, saving valuable time and money and getting buildings open for business more quickly.”
Warren said that, if the program works as planned, it would be beneficial to his company.
“I’m a real fan of what L.A. has to offer as an urban playground, so as a multi-family developer we go where our residents want to live,” he said. “But the reality is, the easier it is to deliver new housing the more units will be available on the market. And the more affordable units will be over time.”
Gary Toebben, president and CEO of the Los Angeles Area Chamber of Commerce, who has seen multiple permitting plans floated, said the initiative is one of the best things Garcetti and City Hall can do to create jobs.
“We regularly hear from developers and builders who do business across the United States that it takes longer to complete a project in Los Angeles than in other cities, including places like Chicago and New York,” he said.
Also applauding the effort is Joel Miller, the vice president of planning and entitlements for Psomas, an engineering and consulting firm based in the Financial District. He believes the program will significantly shorten the amount of time it takes to move from project inception to occupancy.
Further, the fact that the city is trying to help projects combats the claims that Los Angeles is not business friendly, he said.
A shorter construction period will mean more projects moving through the system. That would lead to more people living in Downtown sooner, said Carol Schatz, president and CEO of the Downtown Center Business Improvement District and the Central City Association.
“We are very supportive of this new program,” Schatz said. “It will allow medium-sized developers to tap into the case management services previously only available for the largest of projects. Obviously we have a lot of really large projects, and want to keep it that way, but everyone benefits when projects keep moving forward.”
By: Donna Evans
