“For Cleantech Companies, Land Is a Problem
Ryan Vaillancourt. Oct 15, 2012
DOWNTOWN LOS ANGELES - City officials and business leaders for years have been pushing the idea to transform the eastern edge of Downtown into a hub for green jobs and clean technology companies.
But there’s a problem. Today, if someone wanted to bring a manufacturing operation to the area to build, say, extra efficient batteries, it would be nearly impossible to find space.
The vacancy rate among the industrial properties in and around the Arts District has long hovered at about 2%. The tight market stems in part from the robust cold storage, produce and garment-related businesses that have long anchored the area.
There is, however, a significant stock of old warehouses and factory buildings that haven’t seen heavy manufacturing operations in decades. Instead, they are used for storage or shipping and receiving — operations that involve relatively few jobs.
Local leaders believe those buildings are ideal candidates for green or tech-related companies. Bringing those century-old industrial edifices up to current codes, however, looms over property owners like a dollar sign-shaped storm cloud.
“That’s the biggest challenge,” said Erik Johnson, president and CEO of Greneker Solutions, which makes mannequins out of soy-based urethane in a facility near Soto Street and Olympic Boulevard.
In 2010, Greneker was looking to start a new business manufacturing countertops out of recycled materials. They planned to invest about $1 million in a facility. They found candidates in empty or underused industrial buildings in Downtown, but none made financial sense, Johnson recently told 14th District City Councilman José Huizar and a room of developers.
“The sheer labor and cost it would take to go ahead and repurpose those buildings, to bring them up to current codes and adaptability to the type of machinery we were looking at, didn’t make sense,” Johnson said during an afternoon meeting at the Los Angeles Cleantech Incubator, a city-funded Arts District entity that aims to nurture fledgling companies. “I ended up doing it in Ohio.”
The Downtown meeting may have spurred what Johnson and other area business leaders believe could be a solution — an adaptive reuse ordinance for industrial properties. The term comes from the 1999 law that made it easier and less expensive for developers to turn old commercial buildings into housing. It directly led to the Historic Core residential boom.”
Via: Los Angeles Downtown News
Photo: Fred Walti is among a group of area advocates trying to make Downtown a better place for future clean technology companies. photo by Gary Leonard