Jerry Snyder: An Experienced and Successful Housing Developer On The Los Angeles Market

Mr. Snyder, before we delve into the many development projects in which you are involved, why don't you brief our readers re the breadth and scope of your development work? Do you specialize?

Most developers specialize in one type of product. We are a little different in that we do three things: residential, retail, and office. So, we are doing projects in many cases that involve all more than one of those aspects. It gives us the opportunity to be agile in a changing marketplace. As an example, a few years ago I was getting ready to build a 400,000 square foot, two-story, high tech office park in Agoura. It was all designed and ready to go. One night, I woke up at three in the morning and I realized there wasn't a market for this office development. We proceeded to convert the project into 336 residential units, which are almost completed and are being rented with success. So there was an example of being able to change courses quickly and not worry about our capacity to build a different type of product.

I've been doing this for 50 years. In the first 40 years, I built about 40,000 residential units all over the country. Now we're strictly a Southern California development company. Today, we're different than we were ten years ago in that I wasn't doing retail, and I wasn't doing office fifteen years ago. The office market is slow right now, but we've built several million square feet of offices-Water Garden, Wilshire Courtyard, etc. And we're doing a lot of retail, which I currently enjoy. Right now, we are doing approximately five or six major projects, and we have four or five on the burner.

Let's segue to your firm's interest in the Grand Avenue Project in downtown Los Angeles. What do you see as the opportunity and how have you gone about tackling the challenge?

It is a three million square foot opportunity and quite a challenge. Basically, our pitch is that we're local, and we know how to work here in Southern California. We do all three types of projects. We see a need right now for a major retail project between the Disney Hall and Hill Street. We see a need for housing, which has been proven in downtown. So, two of the three we could do immediately, meaning as soon as you can get your design approved and your entitlements done. The office market will have to wait for a tenant to come along. But, the Grand Avenue Committee would like to see something happen very shortly, and we have the ability to go out and do the job without needing to line up partners.

What attracted you to compete for the Grand Avenue project?

Well, my partners felt that this was the project to be built in Southern California, and that the J.H. Snyder Company had no right not to compete.

Each of the teams has pressed their own strength. One of the teams is saying it's not about the developer's capacity, it's about design. You're advocating that your strength is that you've done it all and you are local. How should the competitors be judged? What criteria?

First of all, I'm into design. I live for design. The fact of the matter is we have John Jerde, who has done some great work for us and has built all over the world. Johnson Fain has done some great work all over the world, and particularly here in Southern California. But this is not a design competition. The fact of the matter is, you cannot delete an architect from your team, but you can always add an architect to your team. In fact, one of my competitors is going to say, "if we get the job, we'll hire anybody. We'll hire Frank Gehry if his team loses." We're not saying that. The design is very important. Our architects will make a presentation as to what their vision is.

Let's turn to projects now being developed by your firm. At the Huntington Beach Mall, you are converting a traditional enclosed shopping mall into a more modern lifestyle center. TPR recently carried interviews with both David Doll from Westfield and John Given from CIM Group. Each talked about the next generation of retail malls. Could you elaborate on what you're doing in Huntington Beach? Is it cutting edge?

Huntington Beach was approximately a one million square foot mall that was pretty much dead-anchor tenants Broadway and Montgomery Wards were closed. It's a great location at the intersection of the 405-Freeway and Beach Boulevard. The shops and stores along the freeway were doing all right-Barnes & Noble, Circuit City, Maggiano's Restaurant, and Staples-but the rest of the center was dead. A lot of people had tried to de-mall it over the years, but it didn't work.

When we were brought in, we redesigned it totally. Instead of demolishing the Broadway building, we were able to save it-it was a beautiful building-by moving Kohl's in there. Kohl's has a 96,000 square foot store there that opened last March, and it's one of their better stores. We did some roadwork and landscape work and that fit in with the part of the center that was open. Then we went into our marketing program. We have since leased 80% of the total center, which is probably close to one million square feet. We have a 4,000-seat Century Theatre, an amphitheater for entertainment, Bed Bath & Beyond, Cost Plus, REI, and some more typical tenants like California Pizza Kitchen and Islands.

Jerry, one of the quotes from David Doll at Westfield was, "as we look at our properties today and continue to look at the retail environment, those planners, retailers and owners who are looking in the rearview mirror for ideas or trends are frankly, an accident waiting to happen." What's the relevance of his observation?

I totally agree, and that's what we've done here. We're not a mall. The roof's gone. Everything is facing fountains. We have an amazing amount of landscaping and water features and different areas for people to congregate. It's not a mall. If you look at our renderings, it absolutely defines the next wave of shopping centers.

Let's talk about the transit-oriented, mixed-use development in North Hollywood. Elaborate on the promise and potential of this TOD. What's the opportunity? What's the statement you're intending to make?

The opportunity here is at the corner of Lankershim and Chandler, the terminus of the Red Line and future terminus of the Orange Line bus transitway. Several developers have played with this opportunity. At one time, it was going to be studios. Then, it was going to be an office park. It was a horrible looking area when we took it over. As a result, we felt that we had to make a major statement-we couldn't just put a new project in the middle of a sea of old buildings. So, we are building 750 units, of which 436 are apartments and 291 are lofts. In addition, we are building 650,000 square feet of retail, supermarket, drugstore, etc. All of this is going up at one time, surrounding the railway station with portals feeding the Red Line.

Here's the opportunity: you have all new units, 20% of them affordable, where people can walk out (although we have plenty of parking) and take the subway toward downtown or go out to the west San Fernando valley on the high-speed busway. But, the greater accomplishment will be the establishment of a new neighborhood. I'm very much against redevelopment where you put a little project in a sea of old buildings.

As a developer of multi-family housing in the city, you know that the city is considering an inclusionary zoning ordinance. What are your thoughts about such an ordinance in the City of L.A.?

When we built our 580 units in the Marina area, we had 20% affordable housing. We have 20% affordable out there at North Hollywood. When we built our 336 units in Agoura, we paid a fee for inclusionary zoning. So, this is not a new thing for us. I have no problem with a citywide inclusionary zoning ordinance. It's something that has to come.

The City Council is also considering an ordinance related to banning big box developments like Wal-Mart. You've got a Target among your retail outlets in the West Hollywood Gateway. What are your thoughts about the efforts to block superstores from being included in major retail developments in the Los Angeles area?

Wal-Mart is going to a superstore concept, which includes groceries and competes with union stores like Ralphs, Vons, and Albertsons. The debate is all about what's going to happen to the middle class of America. The unions have done a great job of getting their message to the politicians. All of these redevelopment jobs that we do are all living wage jobs. Even the supermarket we're putting in NoHo will employ all union members. We could not put a non-union market in. That is what the debate is about and I do not have a personal opinion about it right now.

The Planning Report has frequently noted that a number of real estate developers and civic leaders lament that there is too little planning going on in the city. There's mediation, but no real planning, because we've stripped the planning agencies and related departments of the resources to do it well. What are your thoughts and reactions to that assertion? Is the city a capable partner re planning our neighborhoods and commercial corridors?

The private sector is better equipped to do planning. I have a hard time thinking of any great looking projects that were designed by the public sector. Our company is doing a lot of redevelopment work in a lot of cities, where we have assistance from the city for assembling land, etc. So, you might say that's a partnership. But they're not doing the planning, we're doing the planning. And I don't know any cities that have the capacity to do planning, and they never did. Ever.

What's the value of having community master plans or city plans that locate where uses might most efficiently be provided?

That's why we always have rezoning. Those plans may have made sense when they were put in place twenty years ago, but the times change. Right now, there's a tremendous need for housing. Everybody wants to build apartments. A lot of old buildings downtown are being converted into apartments and lofts. That may get overdone. The office market's starting to get stronger. You may see some more office buildings crop up. Planners and cities are and have to be flexible and change with the times.

In closing: Look out five, ten years. What are the best development opportunities in the Los Angeles basin generally and for your company? Will Los Angeles have a vibrant housing market for some time to come?

Very much so. One inescapable fact is that we have a population explosion, and you've read all the numbers and what's going to happen in the next ten, fifteen years. And we don't have enough affordable housing-housing prices now are in the stratosphere. That may change. But, J.H Snyder Company has more opportunity than we've ever had. We're visible. Cities are coming to us. Maybe they like the river that we built in Rancho Mirage. We're going to be doing a major retail and residential development in another part of the San Fernando Valley. We're very excited about the future of the Southern California market.