Caruso Files Palisades Village Plans with City

By FRANCES SHARPE | Editor-in-Chief

In an exclusive interview with the Palisadian-Post, developer Rick Caruso revealed that Caruso Affiliated has submitted its full entitlement application to the City of Los Angeles and remains on schedule to open its Palisades Village project in Fall 2017.

The all-encompassing plans, which were submitted on July 24, contain the same elements Caruso promised at the December 2014 community meeting held at Palisades Charter High School—a five-screen movie theater, a specialty grocer, an open park area, an underground parking structure, a community room, eight residential apartments and many single-level retail and restaurant options.

Caruso told the Post he will be building 116,000 square feet of rentable space across the 3.17 acre property, which includes the storefronts on the south side of Swarthmore between Sunset and Monument, the parking lot behind those buildings, most of the storefronts on the north side of Swarthmore and a number of storefronts on Sunset between Swarthmore and Monument.

“Our plans include only about 40 percent of the floor area we’re allowed to build,” Caruso said. “We could build about 275,000 square feet, [but what we’re building] is in keeping with the nature of the Palisades and the community.”

A COMMUNITY CORNERSTONE

From day one, community involvement has been the cornerstone of this project, according to the developer.

“It is driven by broad community support, and we want it to reflect the wishes of the majority of the Palisades,” he said.

To date, the project has received overwhelming support from the Palisades community as well as from the city.

“The main thing I hear from people in the community is that they want the project done faster,” Caruso said.

At the city level, Councilmember Mike Bonin’s office, Mayor Eric Garcetti’s office and City Planning have all indicated to the developer that they are impressed by the unprecedented amount of support for the project.

“Mike and the Mayor have never seen this much support,” Caruso said.

An influx of new retailers in surrounding commercial properties also indicates a show of support.

“Because of this project, people have now identified the Palisades as a great place to open a business,” Caruso said.

For example, the highly anticipated arrival of the wildly successful Sweet Rose Creamery in the 970 Monument building, which also houses Pinocchio in Cucina and Palisades High-Tech, marks a vote of confidence for the area.

Caruso thinks the Palisades Village project will quiet some naysayers who argue that the Palisades can’t support retail and said it will be a real boost to employment.

TENANTS STILL UNDER WRAPS

Many Palisadians have flooded the Post and Caruso Affiliated with suggestions for a specialty grocer, restaurants and retailers.

At this time, Caruso is remaining tight-lipped about any future tenants, confirming only what the Post reported earlier this year that City National Bank, the construction lender on the property, will have a branch in the project.

Although he wouldn’t go into specifics about tenants, Caruso did say the search for a specialty grocer to occupy the 11,000-12,000 sq. ft. planned market has been narrowed to Trader Joe’s, Whole Foods and Erewhon.

As he has said previously, Caruso confirmed that the project will not include chain stores and instead will feature unique independent retailers and restaurants.

He anticipates five to six restaurants, ranging from casual family style to more fine dining, in addition to a great bakery.

Tenant announcements may start trickling in at the beginning of 2016.

Who will operate the movie theater also has yet to be decided.

“We’re talking to a couple operators and keeping the option open to do it ourselves,” said Caruso, adding that the firm is currently working on the theater’s interior layout and design.

The Farmer’s Market, he assured, will continue to be held throughout construction. As construction gets underway, the market may shift down Swarthmore closer to Sunset or may temporarily move to another street. Once construction is complete, the market will continue to operate on Swarthmore, which will be one-way only from the alley to Monument.

As for the current retailers, “Everybody has expressed interest in staying,” Caruso said.

If they do stay, they will have to come in at the new rent rates, which are not being released yet.

NO NEW ACQUISITIONS YET

Caruso has made no secret of the fact that he would prefer to have control of all the properties on Swarthmore and continues to have conversations with building owners about buying them out.

“They say they’re not interested in selling,” Caruso said of the properties—P2, US Bank and the structure that houses Madison—that were not included in his initial purchase.

In September 2014, the Post broke the news that Caruso had entered an agreement to purchase the Exxon Mobil gas station at the corner of Swarthmore and Sunset.

Mobil’s owner Saeed Kohanoff plans to relocate the Exxon Mobil gas station and convenience store to Via de la Paz and Sunset, the current site of the Shell station, which he purchased in May 2014.

Kohanoff has presented plans for his convenience store but has met with opposition from the Pacific Palisades Design Review Board and some adjacent neighbors.

Caruso confirmed that he has a firm contract to acquire the Mobil station that is not contingent on approval of plans for its new site. The transfer of ownership will be finalized in 2016.

A SPECIFIC PLAN

In Pacific Palisades, commercial building projects typically must adhere to the Pacific Palisades Commercial Village and Neighborhoods Specific Plan. The Palisades Specific Plan includes height restrictions, parking requirements, setback guidelines as well as a number of things that don’t apply to Caruso’s Palisades Village project, according to the developer.

Caruso Affiliated worked closely with the city to create a new, unique Sub-Area (North Swarthmore Sub-Area) specifically for the Palisades Village project, Caruso revealed.

“The city said it will be easier to accomplish all of the things the community wants from this project with a new Sub-Area of the Specific Plan,” Caruso said.

In addition, the existing Palisades Specific Plan doesn’t have “proper development controls that, at the city’s request, would need to be in place for this project,” said Michael Gazzano, Vice President of Development at Caruso Affiliated.

“We’re not doing it to circumvent what’s allowed,” Caruso said. “It constrains us to the lower entitlements we’re asking for and it will allow retailers—whether current ones moving back or new ones moving in—to navigate through the city in a more efficient way.”

For example, the Sub-Area plan governs signage in a consolidated fashion so retailers won’t have to pull individual permits for their stores.

Another example?

“We like to have outdoor seating, but in the current Palisades Specific Plan, you can’t have outdoor seating on the sidewalk,” Caruso said. “In the Sub-Area plan, we can have it. We don’t have to ask for a variance.”

Caruso’s Sub-Area plan, which is considered to be an amendment of the existing Palisades Specific Plan, also allows for the proposed Bay Theater marquee, which will be reconstructed according to its original 1940s design as proposed by architect S. Charles Lee.

The property’s tallest architectural element, the marquee for the new theater would not have been allowed under the existing Palisades Specific Plan.

At the community meeting in December 2014, Palisades Design Review Board member Stuart Muller expressed excitement about the overall plans, but said the proposed Bay Theater marquee is “too big and might spread light into the neighborhood and probably needs to be brought down in size by about one-third.”

After hearing community input, Caruso reduced the size of the marquee by about 15 percent. With the new Sub-Area plan, the revised size is acceptable.

According to Caruso, the individualized Sub-Area plan is also intended to help fulfill his vision of making the property feel more like old Main St. with outdoor benches.

“During the holidays, it gives us permission to decorate. We don’t need to request a permit,” Caruso said.

The project’s plans also call for several aspects that will make it more environmentally sensitive. The theater and specialty grocery store will boast solar panels. In addition, a bike-sharing program will be in place and charging stations for electric vehicles will be available in the parking garage.

The project will be LEED equivalent at the Gold level, according to the developer. LEED certifications fall into four categories—Certified (the lowest), Silver, Gold and Platinum (the highest).

“It’s LEED ‘equivalent’ because there currently is no certification on retail,” Caruso explained.

The developer emphasized that the new Sub-Area plan applies only to the Caruso Palisades Village project and not to any other commercial projects in the Palisades.

TIMELINE 

After announcing on Nov. 25, 2014 that Caruso Affiliated closed escrow on the property, the developer didn’t hesitate to get the project underway.

On Dec. 8, 2014, efforts began on the environmental cleanup to address soil, soil vapor and groundwater contaminated with tetrachloroethylene, or PCE. Previous investigations revealed a historic release of PCE, most likely attributable to a dry cleaning business that operated at 1045 Swarthmore from about 1968 to 2000.

Today, all cleanup that had to be done above ground has been completed and only underground work is currently being done.

For now, Caruso’s main focus is getting through the entitlement process, which includes acquiring all necessary permits, such as liquor licenses.

To date, there have been only a couple of snags, including a pair of objections to a liquor license transfer from the former Oak Room on Swarthmore.

Ted Weitz, a 35-year Palisades resident of the Alphabet Streets, filed a protest with the Department of Alcoholic Beverage Control (ABC) on May 9, 2014. Another Alphabet Streets resident, Michael Branch, subsequently filed a protest with ABC on May 28 last year, citing past problems with the restaurant formerly at the location.

Caruso indicated that his firm has reached verbal agreements with the residents and expects the transfer to go through.

The developer anticipates acquiring three full liquor licenses, a couple of beer and wine licenses as well as one liquor license each for the specialty grocery store and movie theater. Since these will be new licenses, they will not be as restrictive as the former Oak Room license that is in the transfer process.

He estimated the path to entitlement will take about one year and is once again looking to the community for support.

“People tell us they want us to open sooner and express frustration asking why it isn’t happening sooner. We’re pushing as hard as we can,” he said. “What would be really helpful would be to have community support going into the LA City Council office to get it done quickly.”

The developer suggests Palisadians send an email to Councilmember Bonin in an effort to speed the project through the entitlement process.

If all goes smoothly, there will be a groundbreaking ceremony in spring or summer 2016 and the Palisades Village will open in fall 2017.

“You can bet we’ll throw a terrific grand opening party,” Caruso said.

SIDEWALK PLAQUES

Many residents have expressed concern about the sidewalk plaques that will be removed as part of the development of Caruso Affiliated’s Palisades Village project.

Developer Rick Caruso has promised the community that he will find a way to honor the names that were on the commemorative plaques that lined Swarthmore Avenue.

“We haven’t figured out how to put the names back out yet, but we are open to suggestions,” Caruso said.

If you have a suggestion email the Post at frances@palipost.com.