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When Fast Food Leaves
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| The closure of the McDonald's location in the Fine Arts Building at 811 W. Seventh St. is evidence, some say, of a strengthening "retail spine" running through Downtown. Photo by Gary Leonard. |
Two Restaurant Closings on Seventh Street Start a 'McFlurry' of Theories
by Kathleen Nye Flynn
When two staple fast food eateries disappeared simultaneously from the corner of Seventh and Figueroa, more than a few people took notice.
"It's the new health-focused higher-end population of Downtown," economic experts opined.
"It's the resurgence of Seventh Street," city officials gloated.
"It's corporate America," said one passerby wondering why her McDonald's was suddenly gone.
The restaurants vanished last month. Burger King, at 800 W. Seventh St. at the corner of Flower, was the first to go. McDonald's quickly followed, officially shutting its doors two weeks ago in the Fine Arts building at 811 W. Seventh St. A sign in the window says that it has moved to 404 W. Seventh St., at the corner of Hill Street.
Set to open in Burger King's spot is Wokcano, an upscale version of the Asian fast-casual restaurant that has moved from its previous location near the Staples Center. The restaurant is asking city approval to stay open late, have outdoor seating and serve beer and wine, said Amy Raine, a broker for Cushman & Wakefield, the real estate firm that negotiated the deal. The McDonald's spot is still in negotiation, said Steve Provencio, an acquisitions director for Alliance Commercial Partners, who now owns the Fine Arts Building.
A slew of fast food restaurants opened during the first Downtown boom in the early 1990s, when the area was ripe with the nine-to-five corporate lunch crew flocking to the new office buildings. With the chains' cheap prices, they held together through the market's subsequent plunge.
Now the quick and easy eats might have met their match, some Downtown experts say, and it's in the form of the hip, health-conscious loft dweller who likes to stay up late, drink a double soy latte and start a meal with a side salad.
"Landlords are looking to upgrade their retail while restaurants are moving to full service to take advantage of the new Downtown market and the evening diners," said Derrick Moore, a retail property advisor for the Urban Redevelopment Group. "If you look at other urban centers in Southern California, they're switching out quick service buyers for a more hip, more urban bar and lounge, full-service setting. It's because the population is changing and it's what the residents are demanding."
That's what partly happened to the Fine Arts Building's McDonald's, said Provencio. The restaurant's lease was up, and the new owners are now looking for something that will complement their building's commercial clientele.
"We intend to go through a leasing process and scour the market for a retail tenant to add to the building," Provencio said. "Maximizing the rent isn't what we are after. We would like a tenant that will improve the leasing ability of the building and create a better asset all around."
Elusive Mid-Level Meals
The new downtown population needs restaurants to stay open later, and preferably locations that include bars, Moore said. With the recent Downtown boom focusing on residential as opposed to just offices, the full-time crowd needs full-time fare.
But, he warned, Downtown should also maintain mid-level restaurants too, even if it sacrifices of the low-end options along the way. The area already has cornered the market with the white linen-tablecloth establishments like Pinot, Patina, Noé and Traxx, but that's not necessarily food to eat while on the run.
"Downtown is doing a fine job at going upscale, but it would be wise to bring in more mid-scale restaurants," he said.
Moore listed El Torito and Applebee's as examples of restaurants that are an upgrade from fast food, but only by a couple of dollars. Library Court's collection of healthy-but-inexpensive grab-and-go restaurants, including Wolfgang Puck's Gourmet Express, Loose Leaf Salad and Mitaki Sushi, are good examples of the push for mid-level fare that can still feed the lunchtime rush, he added.
Fast food isn't being pushed out, he said, just pushed to the sidelines: to mid-block sites, less popular corners like McDonald's new location at Hill and Seventh streets, or inside shopping centers, like its California National Plaza and Macy's Plaza locations, Moore said. This leaves free prime corners such as Seventh and Flower streets and historical buildings - supple ground for plush eateries.
"These are nice, established corners," Moore said. "The fast food restaurants are moving to more in-line spaces, which still works well for them."
Others say that it really isn't a trend at all - that the specific places closed because the stores just aren't the right size or shape that's good for business anyway. Including the location moving to Hill Street, there are still five McDonald's and a slew of Quizno's and Subway locations in business in Downtown.
"These closures aren't necessarily market-driven," said Dick Carter, a real estate consultant who has worked for both McDonald's and Burger King. He said that the McDonald's space, with its second story and odd floor plan, had always been awkward and the Burger King space, at 6,000-sqaure-feet, was always too large. While it's evident that Downtown is attracting new, high-end restaurants, the two fast food joints in question weren't necessarily chased out, he said.
After all, the Carl's Jr. nearby at Grand and Sixth streets remains - although it's currently closed while the building is under construction.
That's just because they have a three-year lease, however, said Izek Shomof, the owner of the building.
"We had a lot of big, upscale restaurants trying to move in here," Shomof said. "But Carl's Jr. has a few years left on their lease."
He agrees with those that say low-end restaurants are losing out due to the high-end residents. He points to the opening of a high-end pizzeria at Sixth and Spring streets and an upscale coffee house that's replacing LA Café on Spring Street. Even the Carl's Jr. at the base of his building is following the upgrade trend and "spending a lot of money in renovating the place," Shomof said.
Amy Raine, the broker for Cushman and Wakefield, negotiated the deal to fill Burger King's new space and participated in the search to fill the old McDonald's storefront. Although a Burger King representative said that the company can't release any information on why the store closed, Raine said that the rent in both places was high - McDonald's had paid about $15,000 a month - and both of the restaurants' leases were up.
"McDonald's did inform us that it was an underperforming location for them," said Ted Reis, the president of Blue Realty, who owned the Fine Arts Building from 2002 until earlier this year. He added that McDonald's lease for the space was signed in 1985.
McDonald's representatives did not return phone calls.
"I think some of the existing fast food places in Downtown will do better now, but overall the whole population here is changing and the restaurants will change, too," Raine said. "It will create a void for a few people, but it makes the place more interesting."
LaShawn Penson, a loft resident at Fifth and Spring streets, couldn't help but stop and read McDonald's closing sign as she walked by on a recent Wednesday.
"It's corporate America," she said, referring to the people working in Downtown. "They're starting to eat healthier, and they're not after this type of food."
Lucky Number Seven
According to Carol Schatz, president of the Downtown Center Business Improvement District, the restaurants' closures are not merely indicative of the resurgence of Downtown, but, more specifically, demonstrate the renaissance of Seventh Street.
"It's been a high priority of the BID to make Seventh Street into the retail spine of Downtown," Schatz said. "All these new tenants there point to it being successful."
Seventh Street was once the hub of Downtown; that changed in the last couple decades as more energy poured into Bunker Hill development and the Metro Red Line construction chased away foot traffic and retail.
Now, three new loft buildings are set to open within the next year surrounding the corner of Seventh and Flower, including the Brockman Building at 530 W. Seventh St., the Coulter and Mandell buildings at 500 and 518 W. Seventh St. and the Roosevelt building at 727 W. Seventh St. Altogether, they account for nearly 360 new units in the area.
Developers of the Roosevelt Lofts building, which is under construction, say that they will upgrade their low-end eateries, which includes La Salsa and Great Steak and Potato Company. Further bolstering the nightlife, 213 Ventures, the company responsible for the popular Broadway Bar and the Golden Gopher, will open the Seven Grand bar at 515 W. Seventh St.
"Seventh Street is going to become a residential street," said Brady Westwater, president of the Downtown Los Angeles Neighborhood Council. "Sit-down restaurants will be good for the area because they help to develop a sense of community, to integrate residents, and give new comers a chance to know the community better."
Contact Kathleen Nye Flynn at kathleen@downtownnews.com.
page 1, 9/4/2006
© Los Angeles Downtown News. Reprinting items retrieved from the archives are for personal use only. They may not be reproduced or retransmitted without permission of the Los Angeles Downtown News. If you would like to redistribute anything from the Los Angeles Downtown News Archives, please call our permissions department at (213) 481-1448.
"It's the new health-focused higher-end population of Downtown," economic experts opined.
"It's the resurgence of Seventh Street," city officials gloated.
"It's corporate America," said one passerby wondering why her McDonald's was suddenly gone.
The restaurants vanished last month. Burger King, at 800 W. Seventh St. at the corner of Flower, was the first to go. McDonald's quickly followed, officially shutting its doors two weeks ago in the Fine Arts building at 811 W. Seventh St. A sign in the window says that it has moved to 404 W. Seventh St., at the corner of Hill Street.
Set to open in Burger King's spot is Wokcano, an upscale version of the Asian fast-casual restaurant that has moved from its previous location near the Staples Center. The restaurant is asking city approval to stay open late, have outdoor seating and serve beer and wine, said Amy Raine, a broker for Cushman & Wakefield, the real estate firm that negotiated the deal. The McDonald's spot is still in negotiation, said Steve Provencio, an acquisitions director for Alliance Commercial Partners, who now owns the Fine Arts Building.
A slew of fast food restaurants opened during the first Downtown boom in the early 1990s, when the area was ripe with the nine-to-five corporate lunch crew flocking to the new office buildings. With the chains' cheap prices, they held together through the market's subsequent plunge.
Now the quick and easy eats might have met their match, some Downtown experts say, and it's in the form of the hip, health-conscious loft dweller who likes to stay up late, drink a double soy latte and start a meal with a side salad.
"Landlords are looking to upgrade their retail while restaurants are moving to full service to take advantage of the new Downtown market and the evening diners," said Derrick Moore, a retail property advisor for the Urban Redevelopment Group. "If you look at other urban centers in Southern California, they're switching out quick service buyers for a more hip, more urban bar and lounge, full-service setting. It's because the population is changing and it's what the residents are demanding."
That's what partly happened to the Fine Arts Building's McDonald's, said Provencio. The restaurant's lease was up, and the new owners are now looking for something that will complement their building's commercial clientele.
"We intend to go through a leasing process and scour the market for a retail tenant to add to the building," Provencio said. "Maximizing the rent isn't what we are after. We would like a tenant that will improve the leasing ability of the building and create a better asset all around."
The new downtown population needs restaurants to stay open later, and preferably locations that include bars, Moore said. With the recent Downtown boom focusing on residential as opposed to just offices, the full-time crowd needs full-time fare.
But, he warned, Downtown should also maintain mid-level restaurants too, even if it sacrifices of the low-end options along the way. The area already has cornered the market with the white linen-tablecloth establishments like Pinot, Patina, Noé and Traxx, but that's not necessarily food to eat while on the run.
"Downtown is doing a fine job at going upscale, but it would be wise to bring in more mid-scale restaurants," he said.
Moore listed El Torito and Applebee's as examples of restaurants that are an upgrade from fast food, but only by a couple of dollars. Library Court's collection of healthy-but-inexpensive grab-and-go restaurants, including Wolfgang Puck's Gourmet Express, Loose Leaf Salad and Mitaki Sushi, are good examples of the push for mid-level fare that can still feed the lunchtime rush, he added.
Fast food isn't being pushed out, he said, just pushed to the sidelines: to mid-block sites, less popular corners like McDonald's new location at Hill and Seventh streets, or inside shopping centers, like its California National Plaza and Macy's Plaza locations, Moore said. This leaves free prime corners such as Seventh and Flower streets and historical buildings - supple ground for plush eateries.
"These are nice, established corners," Moore said. "The fast food restaurants are moving to more in-line spaces, which still works well for them."
Others say that it really isn't a trend at all - that the specific places closed because the stores just aren't the right size or shape that's good for business anyway. Including the location moving to Hill Street, there are still five McDonald's and a slew of Quizno's and Subway locations in business in Downtown.
"These closures aren't necessarily market-driven," said Dick Carter, a real estate consultant who has worked for both McDonald's and Burger King. He said that the McDonald's space, with its second story and odd floor plan, had always been awkward and the Burger King space, at 6,000-sqaure-feet, was always too large. While it's evident that Downtown is attracting new, high-end restaurants, the two fast food joints in question weren't necessarily chased out, he said.
After all, the Carl's Jr. nearby at Grand and Sixth streets remains - although it's currently closed while the building is under construction.
That's just because they have a three-year lease, however, said Izek Shomof, the owner of the building.
"We had a lot of big, upscale restaurants trying to move in here," Shomof said. "But Carl's Jr. has a few years left on their lease."
He agrees with those that say low-end restaurants are losing out due to the high-end residents. He points to the opening of a high-end pizzeria at Sixth and Spring streets and an upscale coffee house that's replacing LA Café on Spring Street. Even the Carl's Jr. at the base of his building is following the upgrade trend and "spending a lot of money in renovating the place," Shomof said.
Amy Raine, the broker for Cushman and Wakefield, negotiated the deal to fill Burger King's new space and participated in the search to fill the old McDonald's storefront. Although a Burger King representative said that the company can't release any information on why the store closed, Raine said that the rent in both places was high - McDonald's had paid about $15,000 a month - and both of the restaurants' leases were up.
"McDonald's did inform us that it was an underperforming location for them," said Ted Reis, the president of Blue Realty, who owned the Fine Arts Building from 2002 until earlier this year. He added that McDonald's lease for the space was signed in 1985.
McDonald's representatives did not return phone calls.
"I think some of the existing fast food places in Downtown will do better now, but overall the whole population here is changing and the restaurants will change, too," Raine said. "It will create a void for a few people, but it makes the place more interesting."
LaShawn Penson, a loft resident at Fifth and Spring streets, couldn't help but stop and read McDonald's closing sign as she walked by on a recent Wednesday.
"It's corporate America," she said, referring to the people working in Downtown. "They're starting to eat healthier, and they're not after this type of food."
According to Carol Schatz, president of the Downtown Center Business Improvement District, the restaurants' closures are not merely indicative of the resurgence of Downtown, but, more specifically, demonstrate the renaissance of Seventh Street.
"It's been a high priority of the BID to make Seventh Street into the retail spine of Downtown," Schatz said. "All these new tenants there point to it being successful."
Seventh Street was once the hub of Downtown; that changed in the last couple decades as more energy poured into Bunker Hill development and the Metro Red Line construction chased away foot traffic and retail.
Now, three new loft buildings are set to open within the next year surrounding the corner of Seventh and Flower, including the Brockman Building at 530 W. Seventh St., the Coulter and Mandell buildings at 500 and 518 W. Seventh St. and the Roosevelt building at 727 W. Seventh St. Altogether, they account for nearly 360 new units in the area.
Developers of the Roosevelt Lofts building, which is under construction, say that they will upgrade their low-end eateries, which includes La Salsa and Great Steak and Potato Company. Further bolstering the nightlife, 213 Ventures, the company responsible for the popular Broadway Bar and the Golden Gopher, will open the Seven Grand bar at 515 W. Seventh St.
"Seventh Street is going to become a residential street," said Brady Westwater, president of the Downtown Los Angeles Neighborhood Council. "Sit-down restaurants will be good for the area because they help to develop a sense of community, to integrate residents, and give new comers a chance to know the community better."
Contact Kathleen Nye Flynn at kathleen@downtownnews.com.
page 1, 9/4/2006
© Los Angeles Downtown News. Reprinting items retrieved from the archives are for personal use only. They may not be reproduced or retransmitted without permission of the Los Angeles Downtown News. If you would like to redistribute anything from the Los Angeles Downtown News Archives, please call our permissions department at (213) 481-1448.
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