The anxiously awaited Planning Commission hearing on a modified business condos project at 8665 Hayden Pl. comes up for approval tonight at 7 in Council Chambers, City Hall, and both parties — protesting neighbors and the two builders — anticipate a long and emotional evening.
Partners Greg Reitz and Steve Edwards of Rethink Development Corp. recently have discussed at length how early they saw the global financial crash coming and how they have adapted with their Hayden Tract firm.
“We have multiple different contingency plans for projects that are under way,” says Mr. Edwards, which might also describe how they have reacted to year-long objections from neighbors to their proposed 8665 building as too dense and too tall.
Innovation has been a pillar of their success in a strongly competitive field. “We have ways for entering the market that we think are unique when compared to other product out there,” Mr. Edwards said. “If it doesn’t work, we have other contingency plans behind the scenes. But things are really bad out there right now.”
How Do You Know?
How do the shrewd developers know when to move on a project — from studying data? From researching history? Or from intuition? “It’s kind of a level of collective intelligence from the different people I talk to,” Mr. Edwards says. “A lot of people have much more knowledge and insight than I do in certain areas, for instance the private equity guys who represent CalPers and other institutional funds out there. They know what is going on. They know what their investors want, such as the Teachers Union. Kind of hearing what’s going on there. Hearing what’s going on at the banks. Hearing what’s going on with other developers, with sales agents, with just people in the market. So, we’re trying to get that collective intelligence so we can figure out, ‘Okay, we might be able to come out of this a little bit.’”
Then it was Mr. Reitz’s turn to speak up. “Looking at our business as developers,” he said, “it’s our job to put the pieces together, buying land, figuring out what to build on it or what to do with the building we acquire, finding financing, both that and equity, and then finding the people to fill up that building, either by selling it or leasing it, designing it. All of those pieces we have to pull together. But the gatekeepers are the people with the money. They open the gate. So we go to them and say ‘We want to do a deal. Can we do it?’ They are the ones who say ‘yes’ or ‘no.’”
Mr. Edwards speculated on the possibility of outlying areas, such as Palmdale, Riverside, Stockton, taking on ghost town qualities. By contrast, “I don’t think real estate will stay depressed long in metropolitan areas,” he said.
How has the company retooled in light of the financial emergency?
“First,” said Mr. Reitz, “we have not been aggressively pursuing any new projects in the short term, which is unusual. We make our money by doing new projects. So for us not to be looking, we are not making any money. We are fortunate we have several projects in the pipeline that will keep us busy for the next couple years, and that’s fine. They are at stages where we feel that when they come to the market, that the market will have recovered or stabilized by then. We are in pretty good shape that way. For us not to be aggressive right now, it probably is okay, as long as it doesn’t last too long. We also are looking at other opportunities for existing assets, less risky investments that banks might be willing to lend on, an existing building we could turn from a brown building into a green one, a building that is not going to be obsolete in five years but will continue to be wanted in the market place.”
Advantages of Being Young
Both gentlemen, idea people at their roots, are in the center of their 30s. In a way, said Mr. Edwards, that is an advantage. “We don’t have the huge houses in Beverly Hills or the Palisades we need to make payments on,” he said. “We live in modest little homes around the area, and we don’t have (lavish) lifestyles we need to support. That helps. I feel for those guys, though. But us being younger, well, we don’t have that big bag hanging over our heads. Also, we have worked in different industries, from technology to consulting. So there always has been rough times in those industries as well. Our attitude is, ‘Let’s figure out how we can get through this’ with our contingency plans, and ‘how can we make money?’ We don’t say, ‘Oh, my God, the sky is falling.’ We say, ‘Now what do we do next?’”
Both believe they can think their way through and out of a jam.
“We really love what we are doing,” said Mr. Reitz, “and I am sure we will find a way to continue doing it.”
Seriously committed environmentalists, both of the young men, said Mr. Edwards, “are very into reducing our impact on the environment with the buildings we build and the people we consult with on their buildings and their properties.
“As the real estate market has been teetering, the green market has gone up. We are kind of specialists in that area. A building we are building in Hollywood will be one of the greenest on the West Coast. We are pioneering out there. People who know what we are doing say, ‘You guys have kind of got something.’ That makes it fun and exciting, even in these down times.”
Tonight’s Story
As for 8665 Hayden Pl., tonight’s subject with the Planning Commission:
“The project is moving forward on our ever-changing schedule,” Mr. Reitz said. “It is a four-story office building in the historic 40 Acres portion of the industrial tract near the Hayden Tract. 40 Acres was a backlot from the Ince Studios. Then it was Selznick and Desilu, and a couple of others in there as well. Then it was developed into an industrial park.
“Our site here is where the Tara Ranch set was built for ‘Gone with the Wind.’ It also happens to be right at the edge of the industrial tract, with two boundaries with the residential property. It’s going to be a building that lives up to the history of the creativity that happened here, movies and television shows that were filmed here. We intend to host creative companies in this building.
A Pride Factor?
“One of the factors that distinguishes it, aside from being one of the greenest office buildings in Southern California, is that it’s office condos. Some people get a little confused about this. The condo just means you can own your office space rather than lease it. So we are actually selling office space to medium-sized businesses that want to make Culver City their home.”
Mr. Reitz said that neighbors who are just curious about 8665 or who feel more strongly about the project should know that the businesses moving in “will be invested in the community. They will not just be passing through on a three- to five-year lease. They are going to own the property. So they are going to care about the surrounding neighborhoods, just as homeowners in the community are invested in seeing the neighborhood remain a nice place to be.”
