De La Hoya bid to buy landmark L.A. Sears distribution center KOÆd
A tentative plan announced in July by acclaimed Los Angeles boxer Oscar 'Golden Boy' De La Hoya and partners to acquire the iconic 1920s Sears, Roebuck and Co. catalog distribution building near downtown Los Angeles has fallen through and the historic East Los Angeles building is back on the market.
The more than $70 million deal between the current owners and De La Hoya's company, Golden Boy Enterprises LLC, in partnership with two Southern California developers, Manarino Realty and Highridge Partners Inc., fell through on Dec. 31 when the De La Hoya joint venture failed to release an initial $2 million deposit.
De La Hoya had hoped the development of the 22-acre site as a mixed-use residential/retail development would help revitalize the low-income area east of downtown Los Angeles where the boxer grew up.
Escrow on the former Sears property was extended from October to the end of December and the purchase was set to close by mid-February. As the end-of-the-year deadline approached, however, the De La Hoya team began intimating that they wanted more time to renegotiate the terms of the purchase as real estate prices have tumbled in the area. The current owner Mark Weinstein of MJW Investments rejected a further extension.
Weinstein paid $40 million for the property in 2004 and had plans to develop the property into a mix of condominiums, apartments and retail, with added new construction surrounding the Sears building. According to reports in the Los Angeles Times, Weinstein spent at least $15 million on the development before deciding to sell the property.
In the three years since MJW began working on the deal the demand for housing in the area has fallen off appreciably. Since the De La Hoya team first began looking at the property earlier this year, the recent national credit crunch and the sub-prime implosion of the Los Angeles housing market have dramatically shifted the dynamics of real estate development in the region.
Weinstein told the Los Angels Business Journal that since the De La Hoya deal fell through, MJW has already met with other potential buyers. He told the journal that he would like to make a decision on what to do with the property within the next 30 days.
When the block-sized multistory Art Deco building at Olympic Boulevard and Soto Street was completed in the 1920s as a retail, office, and distribution center for Sears, the building's 14-story tower was one of the largest buildings in the still-nascent Los Angeles area. The retail store remains in operation on the ground floor, but the massive catalog fulfillment center on the other floors was closed in 1992 as part of a cost-cutting measure by the struggling retailer.
The building is so large that workers on the 200,000-square-foot distribution center floors used roller skates to quickly pull merchandise.