MerueloMaddux’s Union Lofts development will include 11,000 square feet of restaurant and lounge space that will be occupied by restaurateur Los Feliz LLC.

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Developer MerueloMaddux is playing a key role in the rebirth of downtown Los Angeles. Co-headed by President and COO John Charles Maddux, the company is downtown L.A.’s largest landowner, seeking out existing properties to rehabilitate into financially viable developments.

“We also buy land and do ground-up construction,” Maddux says. “But most of the older properties have higher and better uses, so those are the ones we look for.  

“Going forward, a number of our older industrial assets will either transition into residential or newer commercial uses as downtown Los Angeles reemerges as a place to live and play as well as a place to work.”

MerueloMaddux started as a family owned industrial developer more than 30 years ago and has grown into a large, publicly traded firm. The company says its property holdings represent the largest landowner portfolio in downtown Los Angeles and includes extensive facilities in the produce market and adjoining areas.

MerueloMaddux has a number of properties in the planning stages at prime development sites in Southpark, Little Tokyo and Art districts, as well as Chinatown and Glassell Park.

“Committed to sustainable, attractive and affordable growth, MerueloMaddux is also developing distinctive plans for mixed-use, master planned developments in Pomona, Covina, Sylmar and the City of Commerce,” the company says, “totaling several thousand residential units and extensive commercial space.

“The unique organization that comprises Meruelo-Maddux is an evolving, highly visible and experienced real estate company with roots in Southern California committed to a socially responsible approach to development.”

Today, 45 percent of the company’s business comes from the industrial sector, while another 45 percent is mixed-use residential/retail developments and 10 percent is in retail. MerueloMaddux owns 160 properties throughout the Los Angeles metropolitan area.

The company operates its headquarters out of an industrial building it plans to redevelop in the thriving produce district of downtown Los Angeles with more than 100 employees. MerueloMaddux went public last January and trades under the Nasdaq symbol MMPI.

Ideal Location
MerueloMaddux is in the middle of Los Angeles’ revitalization efforts with numerous projects in the industrial and mixed-use sectors.

One such project is 717 Ninth, a mixed-use high rise development located just two blocks away from the city’s main financial district. The area is just a few steps away from L.A. Live and its future hot spots including ESPN’s Deportes studio, ESPN Zone, P.F. Chang’s, a 7,200-seat Nokia Performing Arts Center and the Staples Center.

“This is probably the best located residential property downtown, or certainly one of the best,” Maddux says of the $150 million 717 Ninth Street residential development. “It doesn’t have the noise of being across the street from Staples, it is extremely convenient being across the street from the new Ralph’s Fresh Fare Market and within walking distance to L.A. Live and to work.”

The ground-up structure will have 214 residential units in a 34-story tower, as well as six levels of parking. A seventh-floor amenity deck will hold a 75-foot-long pool, Jacuzzi, outdoor fireplace, gym and gathering room.

Maddux also says 717 is being built to LEED-silver certification status. The ground floor will have 6,800 square feet of retail space, which will be occupied by a restaurant.

No Big Setbacks
Maddux says there have been no delays in construction, which he credits to the organization of Kajima, the construction manager on the project, as well as Lynn Beckemeyer, Meruelo Maddux’s executive vice president of development. The only potentially problematic task came when it was time to pour the mat foundation. Kajima called on 50 concrete trucks an hour for 10 hours to execute the task perfectly, according to Maddux.

“So far, the structure is going up well,” Maddux adds. “We’re at about the fifth level, so we expect in about four weeks they should have poured the seventh level of the large amenity deck and should be ready to begin the residential tower.” The project is expected to be completed in early 2009.

Problematic Process, Not People
While MerueloMaddux’s ground-up project is going smoothly, the rehabilitation process isn’t always as easy. Los Angeles and the state of California as a whole are notorious for an extremely long permitting and approval process and associated carrying costs.

“I don’t think the problem is the people; it is the process,” Maddux says. “There have been abuses of the more-shortened processes in the past. Proper notice has to be given and opposition has to be heard. Lots of buildings in the historic core here are underutilized. The city of Los Angeles has been wise in facilitating the redevelopment of downtown L.A. and L.A. overall. But it’s a long process.

“It would be nice if it could be shortened and made more efficient,” Maddux continues. “The collective development community including city officials and staff are working hard to try to figure out a way to facilitate smart growth and redevelopment.”

One of the projects Maddux points to as working well with the city and its processes is the soon to be completed Union Lofts project, located at the north-east corner of eight and Hill Street, an adaptive reuse of the former Union Bank building into 92 loft-style residential units with more than 11,000 square feet of groundfloor, and basement restaurant and lounge space.

According to Maddux, the developer and his team of contractors worked diligently to preserve the ornate details of the building, taking care not to alter the historic characteristics of the structure.

“There is a balance between preserving historic resources and redeveloping an asset to make it as productive as possible,” Maddux says.

“In the case of The Union Lofts, the end-product will embrace the building’s elegant past with the kinds of newer amenities residents are looking for in today’s residential market.”

Prestigious Restaurant Deal
In July, MerueloMaddux announced restaurateur Los Feliz LLC will open an upscale restaurant and lounge in the company’s Union Lofts development.

The 10-year lease agreement between MerueloMaddux and Los Feliz calls for Los Feliz to occupy 11,000 square feet of space in the Union Lofts building. Approximately 6,000 square feet of restaurant will occupy the the ground floor, and 5,000 square feet will be devoted to the lounge space.

According to MerueloMaddux, the restaurant and lounge space will retain many of the original bank interior design elements and ornate ceiling and wall motifs that were commonplace with bank headquarters buildings in the 1920s and ’30s. 

“A restaurant operator will typically wait until a residential building is almost fully leased before making a large, long-term financial commitment,” Maddux said in a statement. “We made a significant effort to identify the right restaurant and lounge operator for this property. However, we believe that it is the quality of the building and its location that makes this such a desirable opportunity for Los Feliz LLC.

“A high quality, well-run restaurant and lounge is a significant asset when marketing a residential property since its presence enhances the building’s desirability and prestige.”

“The level of activity taking place in and around the downtown corridor's tremendous as the area continues the process of transitioning from a primarily daytime employment center to a 24/7 business, social and entertainment destination for a growing number of residents,” CIO Ted McGonagle said in a statement.

“MerueloMaddux is well positioned to capitalize on this revitalization, as are the numerous companies that currently have properties under construction.”