An L.A. landlord and developer who owns a dilapidated 16-unit apartment building in the Pico Union neighborhood just west of Downtown L.A. wants to replace it with a six-story, 87-unit apartment complex. Then he wants to cash out.
But Rafi Shaoulian – who captured headlines in 2015 when he and his brother sold a development site near the Staples Center to a Chinese developer for $26 million – has seen the property fall out of escrow three times because lenders balk at the building’s “historical significance” in Pico Union.
That has made it difficult to sell the property, said Shaoulian, who claims to be unaware of any specific historical significance to the building, which was constructed in 1938.
Shaoulian, in an interview, conceded that he must fork out substantial legal fees to get the site developed – and sold. This week, he applied for a permit to begin the arduous task of getting entitlements and begin a tough historic district project review process.
“I need to hire someone to talk to the city to convince the city that this is not really a historical building,” he said.
“My dream is to develop this property for my family’s benefit,” said Shaolian, who bought the property back in July 2013 for $1.1 million. He transferred the site’s ownership to his LLCs, Westmoreland Manor LLC and Westmoreland Residences LLC.
Shaoulian said he was hoping to sell the property for health reasons.
The developer and investor said that he has retained Santa Monica architect Babak Bardi Chaharmahali to come up with drawings for the proposed project, which he estimates could cost $20 million or more to develop.
Shaoulian says he owns a tiny portfolio of office and residential structures, mostly in the Downtown area, including some in Little Tokyo, others on streets that crisscross near the Staples Center. He claims that his most valuable asset is located at 120 E. 8th St., at the intersection of 8th and South Los Angeles Streets — just a few blocks east of the Staples Center.
“I want to clean up my portfolio for my family,” he said of his motivation to develop the Pico Union apartment.
The Pico Union site, which is located at 1116 S. Westmoreland Ave., is eligible for density bonuses and other incentives as part of the city’s Transit Oriented Communities program, which provides incentives that encourage market-rate developers to include affordable units in projects located near transit hubs.
The program aims to streamline the development process and incentivize affordable housing development by implementing a section of Measure JJJ, which was passed by L.A. voters in Nov. 2016.
The apartment would reserve 12 units as affordable.