San Pedro Public Market Is Nearing Reality

This month, the LA Waterfront Alliance unveiled new plans for the Los Angeles waterfront development on San Pedro Bay. What, in summary, was shared? Where is this project today in the development cycle?

Wayne Ratkovich: The real significance is that we have arrived at a concept for the waterfront in San Pedro that we believe will work in the marketplace, support the revitalization of the San Pedro community, and serve as a connecting link among the various attractions there. Based upon the feedback we have received so far, there’s pretty widespread agreement. 

Could you elaborate on the vision and concept unveiled by the development team? 

We proposed a concept called the San Pedro Public Market.

The idea is to elevate the image and stature of San Pedro. We felt very strongly that the name “San Pedro” should be part of whatever takes place on the waterfront. There’s no reason to be shy about the name. It’s been around for a very long time. If you travel the freeways of Los Angeles, you’ll see signs to San Pedro virtually everywhere. Former Councilmember Tom LaBonge suggested that the Harbor Freeway be renamed the San Pedro Freeway—I think he probably had a good idea.

The idea of a very public development is essential to the concept. This is still publicly owned land—we only lease it.

We put those two ideas together. Then we looked at public markets around the country, and even outside the country, and borrowed the best ideas we could find.

How has the public responded to these plans? 

We have had a public response unlike anything I can recall ever seeing. We’ve been through a lot of public presentations and meetings over the years, but never have I seen one quite as enthusiastic and quite as unified as the response we have had from the San Pedro community. It startled us. We ended the public presentation and, at the behest of Councilmember Buscaino, everyone in the audience gave us a standing ovation. That’s never happened before to us and I’m not sure it’ll ever happen again!

The City of Los Angeles, yourself, and Jerico have been in negotiation for three years regarding development of the San Pedro Public Market project. Both you and the city have shared in earlier TPR interviews that new infrastructure was needed and essential for success. Elaborate on the infrastructure investment that’s now agreed to and is making your final agreement negotiations possible. 

The Port of Los Angeles has agreed and budgeted something on the order of $40 million for infrastructure improvements to the site. That includes things like streets, curbs, gutters, and utilities—the kinds of improvements that are essential to the success of the project.

With negotiations about to conclude regarding a 50-year ground lease, what challenges remain?

Our negotiation with the city has been going on for a very long time. We are particularly grateful to Mayor Garcetti, Councilmember Buscaino, Port of LA Executive Director Gene Seroka, and the harbor commissioners for having unified their views in support of what we’re doing. We are in much better shape now than we have been over the last three years. We have a remarkable alignment of interest. We’re working in the spirit of a public-private partnership and we are delighted that that’s the case.

Some issues remain but we don’t believe they are serious. We do have to go through some EIR and CEQA work before the lease can be signed, but we think that will be resolved satisfactorily. Given the distance we have come, with the support in the negotiations of the lease, we’re all very confident that we will be able to get to a signed lease within 30 to 60 days. We discussed and weighed that carefully before we had the public meeting, and came to the agreement that we had support in all quarters.

In a press conference following the aforementioned public meeting, Councilmember Buscaino said that plans for developing Ports O’ Call and that part of San Pedro have been in process his entire life—or over three decades. What explains the delay?

My own personal view is that the collapse of redevelopment has probably turned out to be a good thing, because it elevated the importance of the San Pedro waterfront. It caught the attention of the mayor, the port, and the harbor commissioners, who all recognized that the baton has been passed to the port and that there is a genuine desire for improvements to be made.

In the three-year period, we went through two mayors. We went through a change of four out of the five harbor commissioners and three changes of the executive director. I believe there have been four different lead negotiators on behalf of the port. It took a while for us to get the team assembled that we now have.

Regarding public leadership, how significant, for example, was the passage of State Senator Isadore Hall’s SB 399, which amended the Tidelands Trust Act to extend the maximum length of ground leases for developments such as the San Pedro Public Market?

Yes, the state modification of the lease term is important. We ultimately have to deal with that at the city level, also, because the 50-year term on a ground lease without extensions is not a healthy thing for the future of the project. We would not want what has happened to the Ports O’ Call site to happen to the San Pedro Public Market.  Specifically, after 20 or 25 years, nobody would invest in it and it would go straight downhill.

The financing of this project is at least a year, if not 18 months away. We have invited the counsel of respected real estate finance professionals and we believe financing will be available.  It is a bit early to focus on exactly how the financing will be structured.

It’s important to note that we’re planning to support the financing of the project from the private market. From the real estate point of view, building the building, making the necessary improvements to attract tenants, and marketing will all be done with private dollars. We’re not asking for the port to participate, support, or subsidize our development. But we are asking that the infrastructure be a part of their responsibility. The port’s commitment to build the infrastructure has been very helpful, even critical.

Could you share who you’ve assembled to design, build, and implement the project’s development vision?

The development team is a combination of Jerico Development Company out of San Pedro and the Ratkovich Company out of Los Angeles. We have been together now for three years and it has been a wonderful partnership. We share a common view of the future, we see the importance of the project to the San Pedro community, and we have a great working relationship.

The Jerico Group brings us a local family that has been in the area for decades. Jerico is one of the entities of the Johnson family, and the Crail-Johnson Foundation has been very supportive of the development along San Pedro Waterfront, including support for the Iowa and AltaSea.

Our job at the Ratkovich Company is to bring some of the skills of a more traditional developer to the team.

The design team for the San Pedro Public Market is a combination of TFO Architecture, led by Bill Taylor, and Tim Delaney of Tim Delaney Designs. Tim is a designer who has done a great deal of work for the studios, specifically for Disney and Universal. Between the two of them, they brought the talents that we felt were important for this kind of development. As it turns out, they were one of the competitors when we applied for the RFQ. We liked what we saw when they submitted their plan. While we ended up getting selected, we became interested in what their team could do, so we brought them aboard.

As revealed in your March press conference, the San Pedro Public Market project will roll out in phases. Elaborate on Phase 1, and share what triggers a Phase 2.

Our first priority is success in Phase 1, which will then trigger additional development.

A component of this project is a public park. In evolving this design, we borrowed the idea of a park that pays for itself. Exactly how that park is going to be designed is yet to be determined. We want it to be not only a place of entertainment but also a place of adventure and learning. The basic concept is to have an economic engine that drives a very public gathering place.

If we are successful with Phase 1, hopefully additional development will take place in a lot of directions—not just on our property, but also throughout San Pedro. One of the most important things that we could accomplish is revitalizing the community of San Pedro. It’s ready for it.

The second phase could go beyond the site itself. We did a master plan early in our involvement that shows how we could expand the site that we are leasing. There are lots of possibilities. 

You referenced the EIR—how challenging has an EIR been throughout this process?

It has been very helpful that the port dealt with much of the EIR and CEQA requirements in advance of going out with the RFQ. What remains to be done to make sure we conform to all of the requirements of CEQA will require a relatively modest amount of work.

If we have an opportunity a year from now to get an update on what the Alliance has accomplished in partnership with San Pedro, the community, and the ports, what will be the focus?

I hope that we’ll be talking about the improvements underway on the infrastructure, paving the way for the start of construction of our part of the project.

We probably will also be talking about a couple of anchor tenants for the property. We already have one in mind—the San Pedro Fish Market—and we will want a second one. By then, I think we will have our key tenants lined up and we’ll be getting ready to start construction, hopefully in 2017. 

What is the overall timeline as you see it today?

Open for business in 2020!