For more than a decade, there has been a grandiose plan to increase the residential-retail footprint in the Crenshaw District by constructing District Square at the corner of Crenshaw and Obama boulevards. It was a plan to not only improve the financial climate of the neighborhood, but also to attract in-demand shops and services to a rapidly changing part of South Los Angeles.
The 6 1/2-acre site was part of the vaunted “shovel-ready” series of construction plans during the Obama Administration. These were supposed to brighten and revitalize some of the nation’s most needy regions. They were designed to put people back to work during the Great Recession and leave a lasting imprint of modernization and progress.
A long wait for improvement
Nearby stakeholders are waiting patiently to witness this improvement. So far, all they’ve seen daily is a dusty vacant lot while a similar project planned roughly at the same time—the University Village at USC—has been up and running for two years. Construction of the Crenshaw/LAX Metro line is reportedly running on schedule, as is Los Angeles Stadium at Hollywood Park about three miles away. Residents so far have had to forgo this new commercial plaza, and city officials have essentially stopped addressing the matter. There is no new supermarket, no sit-down restaurant(s), no retail establishments and, unfortunately, no new housing in a city badly in need of more shelter, particularly for low-income residents.
The area has long been in need of basic goods—more clothing stores, eateries, fresh groceries, etc.–but the delay in needed aesthetic upgrades has some residents wondering if swift improvements are first and foremost on the agenda at City Hall.
“It’s a shame that they removed the grocery store and convenient shops and have not replaced them,” said Earl Richardson, a long-time resident of the Crenshaw District. “Now we have to travel a longer distance for simple things that ordinarily should be available within walking distance. What has turned out so far is very disappointing.”
Originally conceived in 2007
The project was suggested originally in 2007, with construction set to begin in 2012 and completion by early 2014, according to city planning documents. Other projects in the area have also not panned out, such as the new West Angeles Plaza that would have included a Fresh & Easy supermarket. This corporation would later close all of its 30 stories in Southern California. Then there was Marlton Square, another proposed shopping center in the Crenshaw District, which has been stalled for years.
Originally, the Charles Company would serve as contractor for District Square citing the development as the latest example of economic development along the Crenshaw Corridor. They had banked on the opening of several stations along the Crenshaw/LAX line—along with strategically placed street parking and a more “pedestrian friendly” environment—as a key to increased retail dollars that could be used to attract even more businesses along the famous thoroughfare that for years has been termed as “The Strip” as a counter to its more famous cousin the Sunset Strip across town.
The Charles Company’s original design was to include both upper- and lower-level parking with access to retail stores (Target, Ross, Marshalls) on all levels, while the remaining space would be leased to various vendors and retailers. To date, none of this has materialized.
A brief overview of what went wrong stretches back to it’s beginning. In 2010, Los Angeles City Council President Herb Wesson (10th District) recognized the need to revitalize this part of South L.A. and was an enthusiastic supporter of the project. Officials would soon secure $26.2 million in federal grants and loans, but trouble began a few years later when the developers used only a fraction of that money after purchasing the land, moving out the existing businesses, and beginning the demolition process. The federal assistance would be repaid by the developers using tax revenue generated by the new shopping center—instead of flowing back to city coffers.
The original consortium of developers began to ask for more money. One of these persons was Arman Gabay, co-owner of the Charles Company, who would later become ensnared in a bribery scandal. Then Target Corp. dropped out of it’s proposal to open a store. Wesson would offer to lend another $6 million toward the project called a “float loan” to keep construction on track. Because the project did not have sufficient tax credits needed for financing, Jan Perry, a former city councilwoman who once ran the Economic Workforce Development Department (EWDD), in 2015 issued the first of several default notices stating that the deadline for construction had passed.
In 2015, Wesson wanted to revive the project contingent on Perry’s halt of the default proceedings. At the time, Home Depot had placed its hat in the ring as an anchor store. Perry wouldn’t budge, telling Wesson that the EWDD had several discussions with the developers about repayment of money used so far. It was then that Wesson suggested that the city could pay off the loan’s $2.1 million balance by using federal funds not needed for another proposed development in the city.
Federal officials responded in 2016 that $1.9 million needed to be returned because the project was to be completed and operating in 2016. After a series of default notices issued by Perry, things have been at a standstill since then.
Wesson wants the developer gone. Unsatisfied with the proposed two-story design, a much larger seven-story tower has been proposed. Perry has since pushed to foreclose on the entire land parcel, but Wesson and Mayor Eric Garcetti have opposed such action. Garcetti wants to work with a new developer on a redesigned project composed of 573 apartments but less retail space. The city Planning Department has yet to grant approval to the new design. “The developer should get out of the way so the city or another developer can deliver a mixed-use project the community wants and expects,” according to a spokesperson for Wesson’s office.
Determined to see it through
Through a spokesman, Wesson has indicated that while he believes in the necessity of the development, he is beginning to lose patience with all of the delays. As late as last year, a consultant for the developers insisted they are pushing ahead with the plan despite years of broken promises to nearby residents. They contacted Wesson: “Let me state for the record, there has never been any intention to deceive, delay or misrepresent your office or the community as to our development plans and timing for the District Square development.”
Perry has remained steadfast that she is not the one hindering the project. “I never wavered,” she said earlier this year, “but I was not the ultimate decision maker in this process.”
Wesson has said Perry never met with him or anyone from his staff to iron out the problems related to the project. Wesson has, however, admitted to the unexpected difficulty in bringing new development to the Crenshaw District. “When you invest so much time, you’d like to see a result,” he said last year.
Garcetti has defended the need for the project, but believes it would be better to work with the developers on a redesigned plan. He prefers something with more residential space more in line with Measure H in effort to include badly needed low-income housing in the community.
Residents watch and wait
All may not be lost with District Square. The city planning department is expected to grant approval—possibly as early as this summer—and officials at city hall believe the project should have no trouble in attracting tenants and investors, once the financial issues are straightened out.
“The market will deliver something to this site,” said Steve Andrews who serves as an economic aide to the Mayor’s Office. But residents remain apprehensive, having endured a series of failed promises to help modernize not only this neighborhood, but other under-served settings in South LA.
“We certainly need a new shopping center for the community, but this long wait has left a lot of doubt in people’s minds,” Richardson added. “With all of the new construction taking place downtown and across the city, this is the one area that needs it most. I just hope most of us are around long enough to see it happen.”