Los Angeles County Buys Gas Company Tower for $200 Million
Board of Supervisors Approves Purchase of Iconic Skyscraper
The Los Angeles County Board of Supervisors has approved the purchase of the Gas Company Tower, one of downtown LA’s most prominent skyscrapers, for $200 million. The move is expected to transfer thousands of workers and public services out of the city’s civic center.
Vote and Objections
The board voted 4-1 in favor of the purchase, with Supervisor Janice Hahn casting the lone dissenting vote. Hahn expressed concerns that the purchase would harm the city’s civic center and lead to a "soulless" office tower on Bunker Hill.
Background and Justification
The county has been considering the purchase of the 52-story tower, located at 555 W. 5th St., for some time. The building was widely considered one of the city’s most prestigious office buildings when it was completed in 1991. It has nearly 1.5 million square feet of space on a 1.4-acre site at the base of Bunker Hill.
The county has been facing a dilemma with its current headquarters, the Kenneth Hahn Hall of Administration, which is vulnerable to collapse in a major earthquake. The building is also in poor condition and requires costly upgrades, making a new, safer skyscraper an appealing alternative to some on the board.
Benefits and Concerns
Proponents of the purchase argue that it will save the county hundreds of millions of dollars compared to the cost of upgrading the Hall of Administration and other county buildings. The move will also provide a more modern and efficient workspace for county employees.
However, opponents, including Hahn, argue that the purchase will harm the city’s civic center and lead to a "soulless" office tower on Bunker Hill. They also express concerns about the use of funds meant for capital projects to finance the purchase.
Financing and Closing Costs
The county has agreed to pay $200 million for the building, which is a deep discount from its appraised value of $632 million in 2020. The county will also pay up to $5 million in closing costs.
Future Plans and Redevelopment
The county plans to occupy the building and has agreed to assume existing tenant leases. The building’s current owner, an affiliate of Brookfield Asset Management, defaulted on its debt and the property was put in receivership.
The county’s Department of Public Works has reviewed a seismic report for the tower and agrees with its findings, which will remain confidential until the deal closes. If the county elects to complete a seismic retrofit and other improvements to the building, it can realize a future return on its investment by selling the building when the market recovers.
Conclusion
The purchase of the Gas Company Tower is a significant move for the county, which aims to provide a more modern and efficient workspace for its employees while avoiding costly upgrades to its current headquarters. While there are concerns about the impact on the city’s civic center and the use of funds, the move is expected to save the county hundreds of millions of dollars in the long run.
Frequently Asked Questions
Q: Why is the county buying the Gas Company Tower?
A: The county is buying the Gas Company Tower to provide a more modern and efficient workspace for its employees while avoiding costly upgrades to its current headquarters.
Q: How much is the county paying for the building?
A: The county is paying $200 million for the building, which is a deep discount from its appraised value of $632 million in 2020.
Q: What are the concerns about the purchase?
A: Some concerns include the potential harm to the city’s civic center, the use of funds meant for capital projects to finance the purchase, and the building’s location on Bunker Hill.
Q: What are the benefits of the purchase?
A: The purchase is expected to save the county hundreds of millions of dollars in the long run, provide a more modern and efficient workspace for employees, and avoid costly upgrades to its current headquarters.