Reoccupying Paper Mate: there go the best laid plans

Re-using old buildings is a good thing; so why is it bad for Santa Monica that a new buyer of the Paper Mate factory is going to turn it into offices? It boils down to the three eternal verities of real estate: location, location, location. The factory sits on a crucial piece of land.

But before I get into that, if for you traffic counts are the most important metric for urban planning, stop reading now. You’re going to be happy with the new project, at least as it compared to the Hines project. Based on the EIR for the Hines project, turning 200,000 square feet of old factory into offices will generate (by 2030) approximately 1,900 car trips a day; the final Hines project was projected to generate 6,700.

No one, however, is going to notice the difference. There’s already about 2,000,000 square feet of commercial development in the immediate area and the 26th Street freeway ramps attract traffic from the eastern portion of Santa Monica and down into Venice and Marina del Rey. The existing traffic counts on Olympic and 26th Street are in the tens of thousands without Paper Mate.

Further, nearly half of the Hines project was going to be housing. Very little of the traffic associated with new residents would have been added to the afternoon outbound commuter traffic that drives us Santa Monicans crazy. With respect to commuters, you’re talking about a difference of 200,000 square feet of commercial development between the Hines project and the new one. Santa Monica has more than 10 million square feet of offices.

Moreover, Hines was going to pay for mitigation measures at many affected intersections. The new owners won’t need to do that because they have avoided anything that would subject their project to discretionary development review (although employers in the new project will have to implement some traffic demand management (TDM) procedures).

So, no surprise, traffic around 26th and Olympic will be miserable for a long time. What are we losing that was in the old project? (And, yes, I know, the old project could have been better.)

It’s hard to prove a negative—that what might have been would have been better than what we’re getting. There is also, the question of metrics: many Santa Monicans couldn’t care less about what we might have lost. They already have their jobs, or retirements, and housing, and they don’t care what happens to the old industrial areas that they have no reason to enter anyway. People who might have lived on the Paper Mate site won’t be heard from. (Some in the SMRR leadership will still wring their hands about the jobs/housing imbalance, but what’s it to them? Potential residents don’t vote.)

But there was a reason that people like Kevin McKeown pooh-poohed the idea that Hines would “walk away,” or that Diana Gordon, of the Santa Monica Coalition for a Livable City, assured us that Hines was “posturing” when the developer said it could reoccupy the factory. (This reminds me of the last big development battle in Santa Monica prior to Hines—over the downtown Target in 2001. Back then traffic-fearing residents killed what would have been one of the country’s first City Targets, but told us Target would be back with a plan to build somewhere else. Fourteen years later people are still driving outside of the city to buy a toaster, and who is it who complains loudest that there’s nothing in downtown that serves residents?)

But back to Paper Mate. Everyone who thought seriously about what should be built across the street from Bergamot Station (and I guess that includes McKeown and Gordon) knew that the old factory should be replaced with a development that, using the language the City used to express the public purposes of the project, created “a well-designed and financially feasible gateway project containing a complete community.”

We’re not getting that. Although it’s possible that people might be able to walk through the project (although the current drawings indicate that the site will be fenced in), and it’s possible that the City could build a sidewalk along the north side of Olympic connecting 26th and Stewart, there’s not going to be any plaza making the corner a gateway between the station and a new, active district. There won’t be any vehicles passing through the site either: one of the most beneficial aspects of the old project was the introduction of a street grid, as shown in this map, much of which was dependent on cutting streets through the Paper Mate superblock. A grid allows local traffic to be dispersed, taking pressure away from crowded arterials.

Map showing future streets planned for area in and around Paper Mate site

Map showing future streets planned for area in and around the Paper Mate site

But the biggest negative impact is that without the new streets, the LUCE and the Bergamot Area Plan, for most of the old industrial areas, are dead.

To understand why that’s bad, think about what LUCE is, or was. In 2004 Santa Monica began to update its land use and circulation plans to control inevitable pressures for growth. After six years of conscientious effort, the City adopted a well-coordinated plan to direct growth to designated areas (downtown, the old industrial areas, and boulevards) where it would have the least impact on residents. The LUCE is the plan that critics of development say Santa Monica doesn’t have. Turning the Paper Mate site into a gateway was crucial. Location, location, location.

Those development pressures haven’t gone away. Now, however, after the Hines debacle, if you’re a developer with land in the old industrial areas, or along the boulevards, why propose building anything with public amenities, anything approaching a “complete community,” with housing and new streets, anything that achieves the goals of the LUCE, when you can make plenty of money repurposing an old warehouse or factory, or building a 32-foot high retail box?

Thanks for reading.

Sic transit transit center

Well, the other shoe dropped on the Paper Mate site. Hines sold the property and now the old factory’s 200,000 square feet will become offices, with another level of parking being excavated under the existing parking lots.

Turns out that the paranoia of City Council Members Terry O’Day and Gleam Davis was warranted. During the signature gathering on the Residocracy petition they warned, in an op-ed for the Daily Press, that the alternative to the plan the City Council passed was not a better version of the plan, but a repurposing of the existing building as offices, which would mean thousands of car trips, no traffic mitigations, and none of the $32 million in community benefits that were included in the Hines plan.

I’m waiting to see how long it will take for someone to accuse the developers of being greedy because they aren’t building, across from the Bergamot Expo station, plazas, streets, sidewalks, etc., accessible to the public.

Not to mention the nearly 500 units of housing we’re not getting—housing that a lot of people who work in Santa Monica could use, housing that would keep them off the streets, so to speak, during commuting hours. But housing was not a plus for many people who opposed the project, and that explains why they’re happy with the new plan.

If the paranoia of O’Day and Davis turned out to be prescient, Council Member, now Mayor, Kevin McKeown turned out to be not so good in the prediction department. In an op-ed he wrote for the Daily Press, headlined “Calling for more housing from Hines,” he said that fears that Hines would “walk away” from the deal were unfounded; that “[s]uch a walk away hasn’t happened in decades in Santa Monica.” Give McKeown his due; he’s not backing down now that Hines did walk away. Last week he told Santa Monica Next that, “[t]his project [the new one], even as adaptive reuse, will disappoint many of us, but the original Hines proposal failed in even more massive (and likely more permanent) ways to make appropriate use of a challenging site.”

I hope Mayor McKeown is right about the new plan being less permanent, but I doubt it. The “Pen Factory,” as the development is being marketed, will be around for a long time. Not only because it will take a while to amortize the considerable investment in the remodel (notably for underground parking), but also because once the offices are up and running and paying some of the highest rents in the region, the likelihood that an owner would shut the place down for the several years it would take to build a new project is slim. Expect that the Pen Factory will be there for 20 or 30 years at a minimum.

But McKeown was right that the Hines plan should have had more housing and less offices. I’ve been saying that since before the City Council approved the LUCE, which enabled the Hines plan, in 2010. The plan was flawed, and it may sound like blaming the victim, but I blame Hines as much as I blame anyone else for the plan crashing and burning. The Residocracy folks can’t help themselves, they’re going to oppose development no matter what, but Hines had a choice. Hines was warned as far back as 2010, by its friends, that if it added more commercial space and commuter traffic to the corner of 26th and Olympic, it was going to be in trouble.

Hines could have pulled its own chestnuts out of the fire. During the Planning Commission debate over the plan, Commissioner Richard McKinnon, with then-commissioner Sue Himmelrich’s support, proposed a reasonable alternative with less office and more housing. At City Council, Ted Winterer proposed much the same thing, and Tony Vazquez agreed with him. If Hines, at the commission or even at the council, had jumped up and grabbed this offer, the plan could have been approved at the City Council on a 6-1, rather than 4-3, vote.

That could have had a huge impact, because I doubt that Santa Monicans for Renters Rights (SMRR) would have joined Residocracy to oppose a plan that had had that much support among the SMRR-endorsed council members. Residocracy without SMRR might have been able to gather the signatures, but they wouldn’t have had much credibility looking ahead to November.

But then . . . maybe Hines didn’t care. The local Hines people put their heads, hearts and souls into the project, for six years, but headquarters back in Dallas probably figured they could find a willing buyer at a good price if the whole thing became just too complicated. Investors can’t wait forever. And Hines did follow the LUCE development standards, and they reduced their original project by 20 percent, so they legitimately thought they were playing fair. After the referendum, they had the right to feel that they’d never get a fair chance.

So, just how bad is the new project for Santa Monica? Pretty bad. But I’ll discuss how bad in a future post.

Thanks for reading.

Dear Hines: Please sell. Sincerely, Santa Monica

As I watched the City Council rescind its approval of the Hines Paper Mate site project what became overwhelmingly apparent was that by the end of the road, after seven years, Hines and its project were alone. Friendless. From the public, only the indefatigable Jerry Rubin spoke in favor of the project. All those supporters from before, vanished.

From the dais, there wasn’t much more support. Terry O’Day voted for the project again, but he acknowledged it was not the best it could be. Risk-averse, he voted for it because he feared the worst. Gleam Davis defended the project, but, conflict-averse, she voted to rescind. Bob Holbrook spoke little about the project, instead lamenting how nasty politics had become, and noting that change was inevitable. Pam O’Connor didn’t have to say anything.

The most profound silence came, however, from the developer. Ever since Hines got the four votes its execs thought were all they needed, the company has done nothing, at least in public, to defend its project. There was no campaign contra the signature gathering, and there were no offers to revise the project in the face of the opposition against it. Was this ambivalence or fatalism? Or arrogance?

Through my column (and occasionally over breakfast) I have been telling Hines for five years that to be approved Paper Mate had to be a residential project because adding even one car trip to the intersection of 26th and Olympic would drive people crazy. I’ve talked to brick walls that listen better.

In fairness to Hines, they thought they had a deal, because the City, in the aftermath of the Great Recession in 2008, wanted more commercial office space in the Bergamot area, and that’s what the LUCE called for. The council approved the LUCE on a 7-0 vote, and Hines had grounds to believe that that was the deal. Times change, however, and ultimately it is the developer’s responsibility to call an audible when they do. Hines should have asked to amend the LUCE so that it could develop a residential project.

The crucial moment took place in February when Hines got its four votes. Hines could have had six, which would have changed the political dynamic entirely, if someone from the company had jumped up that night to accept the offer that Ted Winterer made to approve the deal if 150,000 square feet of commercial development was shifted to residential. (Winterer had other concerns as well, notably about architecture, but one assumes they could have been resolved.)

Winterer’s proposal would have entailed more environmental review, because the scope of the environmental review had remarkably not included more residential development, and that would have created some uncertainty. But it would have created a better plan. If Hines had said that night that it could make the revised plan work, it could easily have had at least six votes to approve, since Tony Vazquez voted for Winterer’s motion, too.

Memo to developers: if you have a big project in Santa Monica, you need to count higher than four.

What now? I know that Terry O’Day hopes more than anything that his fears are proven wrong and Hines does not start the process to reoccupy the existing building, but it’s hard to dismiss his fears. If I ran Hines, that’s what I would do, because they no longer have friends to support them here during a new process.

But I have hope. There’s an alternative. My hope is that Hines sells the property to a new developer, one that specializes in urban residential development. There are good residential developers working in Santa Monica already, and there are others working in the region. Perhaps the fundamental problem with the project was that Hines is a commercial developer, and never seemed comfortable with building a place for people to live.

By the way, it’s a good time to sell, or at least to bring in a residential developer partner to take over. According to an article in today’s L.A. Times, the multi-family residential market is booming. Dear Hines: You’ll get your money back.

A new developer would not have to start from scratch. A lot of good planning has been done, such the new streets and pathways. Bring in new architects and planners, however. Let them reconfigure the open space to make it better suit a residential development. That wouldn’t mean there couldn’t be good public spaces connecting the station with the area to the north. There are many urban plazas around the world that are framed with residences.

According to the EIR, nearly all the new car trips the project would have generated would have come from the commercial development. Eliminate the offices, and the impacts of the project will be entirely different.

These seven acres across the street from the Bergamot stop on the Expo line need to be redeveloped to replace the hulking mass of the old factory. It’s time to get someone new to do it.

Thanks for reading.

The Paper Mate factory

The Paper Mate factory