It's not every day that a legislative change in a country on the other side of the globe has an impact on domestic real estate. But that's exactly what happened on May 18, 2006, when the government of South Korea raised the ceiling on investment in U.S. residential property from $300,000 to $1 million. As luck would have it, 100 of the 238 apartments at The Mercury, a $120 million adaptive reuse project in the Koreatown section of downtown Los Angeles, were scheduled to go on sale just two days later.
“We haven't yet tracked how many of the buyers were from South Korea, but probably 95 percent of them are Korean or Korean-Americans,” says Renata C. Simril, vice president of development at Forest City Residential West, the Los Angeles arm of Cleveland-based Forest City Enterprises. “Think of Koreatown as a little South Korea in the United States. They're very well-connected.”
Forest City had no inkling of any pending legislative changes across the ocean when it bought the building, located at the corner of Wilshire and Western, in 2004. The 23-story structure, once home to the Getty Oil Co., was a classic mid-century modern building, designed by architect Claude Beelman, that had seen better days. A smaller developer had originally bought the building and plowed $17 million into its adaptation to condos, going so far as to buy all the cabinets, fixtures, and tile and to frame the first six stories. (A confidentiality agreement prohibits Forest City from disclosing its purchase price.)
Forest City, which has been heavily involved in developing downtown Los Angeles for more than 35 years, might not have had its finger on the pulse of Seoul, but the veteran developers were certainly aware of the resurgence afoot in Koreatown, which has access to the Metro Red Line and is within minutes of Hollywood, Beverly Hills, and Santa Monica. “As Albert Ratner, our co-chairman of the board says, ‘We knew downtown L.A. was going to take off, we were just 25 years early,'” says Simril. “Koreatown is really hot right now, and The Mercury is the first luxury high-rise to go to market.” It's one of 10 developments within a five-block area of Koreatown that is currently under construction.
Of course, location alone isn't enough to make a building a success. It has to have a host of other assets, including good design and great amenities. For that, the developer turned to architects at TCA, formerly Thomas P. Cox: Architects, an architecture and planning firm with offices in Los Angeles and Irvine, Calif. An adaptive reuse project always has its own particular set of challenges, but the biggest hurdle faced by TCA was the fact that the Getty Oil building had already been partially adapted. “Our challenge was, do we go with what the previous developer did or tweak the original?” says project architect Daniel Gehman. Starting over and tweaking the original building made the most sense.
“The outside of the building is quite stately, but it had almost a generic '60s feel, with no expressive lid on the building,” says Gehman. “But it has that unmistakably mid-century vibe, so we tried to resurrect that. We conjured up the ghost of Mies van der Rohe and tried to explore something that was highly detailed with exquisite materials.”
Inside, TCA designed 10 floor plans that are priced from $375,000 to $3 million and range in size from 740 square feet to 1,500 square feet (studios plus one- and two-bedroom units). Bamboo floors, loft-style bedrooms, 10- to 11-foot ceilings, and stainless steel appliances give the apartments a hip urban feel. Street-level retail will include a coffee shop, a dry cleaner, and a gourmet deli. A separate parking garage connects to The Mercury via a partially covered walkway that's bordered by a long narrow pool and a marble wall.
“We modeled it after Mies' Barcelona pavilion at the 1929 International Exhibition,” says Gehman, adding that residents will use this approach much more than the main lobby entrance. “It's a passage that gives where you come home every day a little zip.”
“Going into this, we knew that there are two types of groups who are generally interested in moving downtown,” says Simril, “empty-nesters and younger professionals a few years out of college. What we underestimated were the number of Koreans and Korean-Americans who would be interested.” These run the gamut from older South Koreans buying second homes to younger Korean immigrants who have moved to the States for career opportunities.
Renderings of the ultra-sleek rooftop space, called 23, grab just about every buyer. The previous developer had planned to build a catering kitchen and meeting rooms on the top floor and had already erected some of the necessary walls. The views from this space were “amazing,” says Gehman, “but there was all this stuff blocking the view. So we reshuffled things, took away the walls and left the steel girders, adding a little steel ourselves down the spine of the roof. Now it looks like an archeological discovery of a Greek ruin.” There's even a huge fire cauldron and a swimming pool, fashioned out of stainless steel and put in place via helicopter. On a clear day, the views stretch to include the ocean, Catalina Island, the Hollywood sign, and the observatory.
“At the end of the day, it's a very glamorous building,” says Gehman. “The first night that the rooftop lights are lit, traffic on Wilshire and Western will stop. That should be right around the Ides of March.”
Kathleen Stanley is a freelance writer in Washington, D.C.