34-Unit Development in Downtown San Pedro San Pedro Neighborhood Council Presentation December 19, 2018

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1 34-Unit Development in Downtown San Pedro San Pedro Neighborhood Council Presentation December 19, 2018

2 Table of Contents Leadership Team...3 Location & Market Dynamics...10 Development Progress & Due Diligence...30 Scope & Design of Development /19/ Unit Mixed Use Development in Downtown San Pedro 2

3 12/19/ Unit Mixed Use Development in Downtown San Pedro 3

4 Leadership Team ARK Construction & Development Inc. Project Role: Management of Construction, Material Selection & Cost/Quality Control Founded in 1986, ARK has constructed more than $300M worth of new construction projects focusing primarily in residential multifamily sector. Has built/developed over 750 new residential units/homes. Specializes in condominiums, apartments and townhomes, many of which being 4-6 stories in height. Led by Fred Kamdar and Kambiz Kamdar with a combined experience of over 45 years in real estate development. More information at South Bay Developers, LLC Project Role: Design Leadership, Financial Accounting/Reporting, Back Office, Project Management Specializing in the entitlement of in-fill properties such as residential apartment buildings, mixed use projects and small lot subdivisions. Experience includes the construction and rehabilitation of single family homes and condominiums. Led by Nate Hobba with over 12 years of experience in real estate development, construction and investment. More information at BREEN Engineering Inc. Project Role: Architectural/Engineering Design BREEN Engineering is a multi-disciplinary consultancy firm offering expert MEP, Civil, Structural and Fire Protection design services, both independently and in collaboration. BREEN specializes in multi-unit buildings. Founded in 1997, located in Torrance, CA. Led by Paul Breen with over 30 years of engineering experience. More information at 12/19/ Unit Mixed Use Development in Downtown San Pedro 4

5 ARK Construction Recent Project in Beverlywood (LA Mid-City) Completed in /19/ Unit Mixed Use Development in Downtown San Pedro 5

6 South Bay Developers Past & Current Projects Silver Lake 9-Home (Under Construction) Eagle Rock 13-Home (Design Phase) Gardena 14-Unit Mixed Use (Design Phase) 2 nd Street San Pedro Duplex (Completed 2017) 12/19/ Unit Mixed Use Development in Downtown San Pedro 6

7 South Bay Developers Past & Current Projects Wilshire Grand Tower Downtown LA (2017) Metropolis Towers Downtown LA (2018) Playa Vista Mixed Use (2017) South Park Downtown LA (2015) 12/19/ Unit Mixed Use Development in Downtown San Pedro 7

8 Address: Neighborhood: City: County: State: 336 W 7 th Street San Pedro Los Angeles Los Angeles California 12/19/ Unit Mixed Use Development in Downtown San Pedro 8

Downtown San Pedro Attributes Supporting Residential

sense of place. Walkable downtown environment.

Lower-cost alternative to other coastal cities.

development projects in Manageable commute to Long

9 Downtown San Pedro Attributes Supporting Residential Development Authentic port atmosphere and unique sense of place. Walkable downtown environment. Growing number of amenities plus LA Waterfront pipeline. Burgeoning community of artists and galleries. Lower-cost alternative to other coastal cities. Many new retail, mixed use and residential development projects in pipeline. Manageable commute to Long Beach, South Bay and Downtown Los Angeles workplaces 12/19/ Unit Mixed Use Development in Downtown San Pedro 9

Downtown San Pedro Zone Change Effective 6/26/2018 On May 17, 2018 the LA City Council voted to adopt a Community Plan Implementation Overlay (CPIO) for the downtown San Pedro area.

10 Downtown San Pedro Zone Change Effective 6/26/2018 On May 17, 2018 the LA City Council voted to adopt a Community Plan Implementation Overlay (CPIO) for the downtown San Pedro area. The CPIO went into effect 6/26/2018. The CPIO increases the maximum height and max density for many properties in the downtown San Pedro area. Due to this dramatic zone change to downtown San Pedro, it is expected that much development will occur over the coming years. 336 W 7 th St. (Subject) Subject property is located in the Central Commercial Subarea E in CPIO. S 12/19/ Unit Mixed Use Development in Downtown San Pedro 10

11 San Pedro Waterfront is Currently Under Major Transformation S 336 7th St (Subject) 12/19/ Unit Mixed Use Development in Downtown San Pedro 11

Downtown Harbor Completed Project 12/19/2018

12 Downtown Harbor Completed Project 12/19/ Unit Mixed Use Development in Downtown San Pedro 12

Nearby New Developments in Downtown San Pedro 13 10 12 7 S 6 336 7th St

13 Nearby New Developments in Downtown San Pedro S th St (Subject) /19/ Unit Mixed Use Development in Downtown San Pedro 3 13

1 Re-Alignment of Samson Way, Connecting 7 th Street (2.5 blocks away) $4.9M project to be completed in 2018. Will improve traffic and increase importance of 7 th Street. http://developsanpedro.

14 1 Re-Alignment of Samson Way, Connecting 7 th Street (2.5 blocks away) $4.9M project to be completed in Will improve traffic and increase importance of 7 th Street /19/ Unit Mixed Use Development in Downtown San Pedro 14

15 2 San Pedro Public Market - $100M 30 Acre Development ETA /19/ Unit Mixed Use Development in Downtown San Pedro 15

16 3 AltaSea- $500M 35 Acre Development ETA 2019/ /19/ Unit Mixed Use Development in Downtown San Pedro 16

4 375 Unit Mixed Use Apartment Approved for 6 th St & Palos Verdes St (2 blocks away) 550 Palos Verdes Street project is under construction with Occupancy scheduled for early 2020.

parking stalls and approximately 5,000 SF of commercial space fronting 6th street.

17 4 375 Unit Mixed Use Apartment Approved for 6 th St & Palos Verdes St (2 blocks away) 550 Palos Verdes Street project is under construction with Occupancy scheduled for early The seven story midrise building provides 375 for-rent units (with 26 being reserved for low income families) with a mix of studios, one-, two-, three- and fourbedroom dwellings as well as 647 parking stalls and approximately 5,000 SF of commercial space fronting 6th street. The luxury apartments include high end finishes such as stone counters, vinyl plank floors, stainless steel appliances, NEST thermostats and most units have their own private balcony. Additionally, amenity spaces in the building include a pool and spa deck, three podium courtyards overlooking the water, a dog run, two story fitness center and personal training space, a golf simulator room, and a rooftop clubroom and adjoining sky-lounge. 550 Palos Verdes St The developer paid $24.4M for the property or $228 per sq. ft. of land prior to approval th St (Subject) S 12/19/ Unit Mixed Use Development in Downtown San Pedro 17

6 Pappy s Seafood at 6 th & Centre (2 blocks

com/pappysseafood The 5,000-square-foot lot

6 million on 11/19/2015, or $320 per sf.

18 6 Pappy s Seafood at 6 th & Centre (2 blocks away) Newly opened Pappy s Seafood is a new, hip restaurant in downtown San Pedro. The 5,000-square-foot lot sold for $1.6 million on 11/19/2015, or $320 per sf. of land Pappy s S 336 7th St (Subject) 12/19/ Unit Mixed Use Development in Downtown San Pedro 18

7 Port Town Brewery Opening at 785 7 th St (2 blocks away) Opening in Fall 2018, Port Town Brewing Company

hall and social gathering place. Years later, the building was called 7th Street Garage.

19 7 Port Town Brewery Opening at th St (2 blocks away) Opening in Fall 2018, Port Town Brewing Company will operate a production brewery and tap room, as well as offering brewery tours, beer to go and occasional special events. The group behind the project are owners of San Pedro Brewing Company, the oldest operating brewery in the City of Los Angeles. Port Town will be located in the 10,000 square foot historic Liberty Auditorium, built in 1921 as a dance hall and social gathering place. Years later, the building was called 7th Street Garage. It has been empty since the late 1990 s and the new brewery opening will bring new vibrancy and foot traffic to 7th Street in downtown San Pedro. Company / S 336 7th St (Subject) Port Town Brewery 12/19/ Unit Mixed Use Development in Downtown San Pedro 19

8 24 Single Family Development Under Construction at 8 th & Centre (4 blocks away) Acquired by William Homes in 2017, this San Pedro infill

numerous art studios, cafes, restaurants and bars. In addition, the site is only a short walk to the newly revitalized harbor waterfront.

views of the harbor. Project is currently under construction and expected to be complete by mid 2019.

20 8 24 Single Family Development Under Construction at 8 th & Centre (4 blocks away) Acquired by William Homes in 2017, this San Pedro infill development site is ideally situated in the historic San Pedro Arts District, and will provide future residents with the ability to walk to numerous art studios, cafes, restaurants and bars. In addition, the site is only a short walk to the newly revitalized harbor waterfront. The homes are planned to have direct access garages, and rooftop decks providing valuable private outdoor open space, taking advantage of views of the harbor. Project is currently under construction and expected to be complete by mid th St (Subject) S 8 th & Centre 12/19/ Unit Mixed Use Development in Downtown San Pedro 20

10 120-Unit Mixed Use Apartment Planned for 511 Harbor Blvd (3 blocks away) Galaxy Holding is under contract to acquire a 33,200 SF parcel located at 511 Harbor Blvd.

21 Unit Mixed Use Apartment Planned for 511 Harbor Blvd (3 blocks away) Galaxy Holding is under contract to acquire a 33,200 SF parcel located at 511 Harbor Blvd. Galaxy Holdings constructed The Vue, a high-rise apartment building in downtown San Pedro in Their plan is to construct a 120-unit mixed use development. Construction is anticipated to begin in early Harbor Blvd 336 7th St (Subject) S 12/19/ Unit Mixed Use Development in Downtown San Pedro 21

11 SpaceX to Build Rocket Factory Across Water from Downtown San Pedro On April 16, 2018 the LA City Mayor and a SpaceX representative announced that a the

This new manufacturing plant is expected to be complete in 2020 and will employ more than 800 high-tech jobs. S 336 7th St (Subject) SpaceX Site https://www.

22 11 SpaceX to Build Rocket Factory Across Water from Downtown San Pedro On April 16, 2018 the LA City Mayor and a SpaceX representative announced that a the Port of LA will be leasing a large 18-acre parcel directly across the water from downtown San Pedro to SpaceX to build its Big Falcon Rockets. This new manufacturing plant is expected to be complete in 2020 and will employ more than 800 high-tech jobs. S 336 7th St (Subject) SpaceX Site 12/19/ Unit Mixed Use Development in Downtown San Pedro 22

12 80-Unit Hotel, Restaurant, with Roof-top Bar Planned for 544 Pacific Ave (1 block away) A boutique hotel is planned for a vacant lot next to the historic Warner Grand Theatre, according to

The project site, located at the corner of 6th Street and Pacific Avenue, is slated for the construction of a sevenstory building that would feature 80 guest rooms with ground-floor commercial uses

23 12 80-Unit Hotel, Restaurant, with Roof-top Bar Planned for 544 Pacific Ave (1 block away) A boutique hotel is planned for a vacant lot next to the historic Warner Grand Theatre, according to architectural plans posted by the Central San Pedro Neighborhood Council. The project site, located at the corner of 6th Street and Pacific Avenue, is slated for the construction of a sevenstory building that would feature 80 guest rooms with ground-floor commercial uses and a rooftop bar. Plans also call for 62 parking spaces in a partially underground garage. Renderings of the proposed development, which is being designed by AXIS/GFA, portray a contemporary mid-rise structure clad with a mix of smooth stucco, metal panels, and black brick Pacific Ave 336 7th St (Subject) S 12/19/ Unit Mixed Use Development in Downtown San Pedro 23

13 1,626-Unit Mega Redevelopment Project at Rancho San Pedro (3 blocks away) Rancho San Pedro, the 21-acre public housing area built in the 40 s, will be redeveloped into a mixed-income community

24 13 1,626-Unit Mega Redevelopment Project at Rancho San Pedro (3 blocks away) Rancho San Pedro, the 21-acre public housing area built in the 40 s, will be redeveloped into a mixed-income community with 1,626 residential units, along with a grocery store, pharmacy, Boys & Girls Club and other retail establishments. This project will be transformational for Downtown San Pedro. The city has selected its development partner led by The Richman Group. Rancho San Pedro th St (Subject) S 12/19/ Unit Mixed Use Development in Downtown San Pedro 24

Homes are expected to be completed in 2021. This project is 0.9 miles from the subject property. https://urbanize.

25 14 19 Single Family Homes Planned for 867 W 10 th Street Square One Homes is planning a 19-Unit small lot subdivision to replace the church and parking lot located at 867 W 10 th Street. Homes are expected to be completed in This project is 0.9 miles from the subject property th St (Subject) S 867 W 10 th St. 12/19/ Unit Mixed Use Development in Downtown San Pedro 25

26 Local Demographics 12/19/ Unit Mixed Use Development in Downtown San Pedro 26

Located in Federal Opportunity Zone The recently passed Tax Reform Act included a potential tax break for investors. An investor may defer capital gains taxes on the sale of any asset.

27 Located in Federal Opportunity Zone The recently passed Tax Reform Act included a potential tax break for investors. An investor may defer capital gains taxes on the sale of any asset. These taxes can potentially be deferred until December 31, 2026, or the date of a sale (whichever is earlier). As discussed below, this original capital gains tax is reduced over time, and if held long enough, new appreciation on the investment can be realized tax free. The map to the right shows the area which has been designated as an Opportunity Zone. Because of its location in an Opportunity Zone the project is likely to find more favorable debt and equity capital, due to the preferential tax treatment th St (Subject) S Zones.aspx 12/19/ Unit Mixed Use Development in Downtown San Pedro 27

28 12/19/ Unit Mixed Use Development in Downtown San Pedro 28

29 Project Schedule Estimate Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Design & Permit Approval Building Permits Approved Construction Leasing of Units 12/19/ Unit Mixed Use Development in Downtown San Pedro 29

30 Development Progress & Due Diligence Entitlements / Design Approval No Planning Department entitlements are required for this project. A TOC Tier Check application was approved by Planning Department on 5/29/2018 for 32 residential units. Schematic Design drawings plan checked by LA Building & Safety (LADBS) on 7/23/18. Design Development drawings plan checked by LADBS on 11/28/18. LADBS Bureau of Engineering provided their requirements in a BOE Referral Form, which included a 5 foot widening of 7 th Street and 3 foot widening of sidewalk (8 foot dedication on 7 th St). No other issues of concern called out. Full permit approval is expected by end of April Architecture / Engineering Design Design Development drawings have been completed by architect, structural engineer, MEP engineer and civil engineer. Construction drawings are in-progress. Phase 1 Environmental Site Assessment Report Report is complete. No significant issues of concern found. Boundary/Topographic Survey Survey is complete. No significant issues of concern found. Soils/Geology Soils report submitted to city and approval received on 8/1/ /19/ Unit Mixed Use Development in Downtown San Pedro 30

31 12/19/ Unit Mixed Use Development in Downtown San Pedro 31

32 Scope of Development Project Unit Mix 12 x 1-bed (640 SF) 11 x 2-bed (1,000 SF) 3 x 3-bed (1,200 SF) 6 X 1-bed+den pent. (1,190 SF) Commercial Space 3,000 SF restaurant area 750 SF retail area Key Features 5 story building 2 levels parking (at / below grade) 4 levels residential above parking 32,500 leasable SF 41,300 gross SF (w/o parking) 59,300 gross SF (w/ parking) Top floor outdoor terrace Property/Zoning Information Lot size: 14,400 SF Max Height: 75 feet Max FAR: 5.6-to-1 Density bonus via T.O.C. Note: The building rendering on right is an example to show the scale of the future building and not an actual rendering of the design. 12/19/ Unit Mixed Use Development in Downtown San Pedro 32

33 7 th Street Front Façade. 12/19/ Unit Mixed Use Development in Downtown San Pedro 33

34 Ground Floor & Subterranean Parking Level Ground Floor Subterranean Parking 12/19/ Unit Mixed Use Development in Downtown San Pedro 34

35 Residential 2 nd Floor and 5 th Floor 2 nd Floor 5 th Floor 12/19/ Unit Mixed Use Development in Downtown San Pedro 35

36 Building Elevation View - East Facing 12/19/ Unit Mixed Use Development in Downtown San Pedro 36

Building Elevation View - North Facing 12/19/2018

37 Building Elevation View - North Facing 12/19/ Unit Mixed Use Development in Downtown San Pedro 37

38 Building Elevation View - West Facing 12/19/ Unit Mixed Use Development in Downtown San Pedro 38

Alternative Rendering (Brick Ground Floor) 12/19/2018

39 Alternative Rendering (Brick Ground Floor) 12/19/ Unit Mixed Use Development in Downtown San Pedro 39

Original Rendering (Stone Ground Floor) 12/19/2018

40 Original Rendering (Stone Ground Floor) 12/19/ Unit Mixed Use Development in Downtown San Pedro 40

41 End of Document 12/19/ Unit Mixed Use Development in Downtown San Pedro 41

April 12, 2019 ENVIRONMENTAL CASE NO.: ENV EIR PROJECT NAME: PROJECT APPLICANT:

April 12, 2019 ENVIRONMENTAL CASE NO.: ENV-2018-2294-EIR PROJECT NAME: PROJECT APPLICANT: The Morrison Project Morrison Hotel, LLC and Morrison Residential, LLC PROJECT ADDRESS: 1220-1246 South Hope Street,