Developer Mike Harrah of Caribou Industries is pivoting to residential for his One Broadway Plaza project in downtown Santa Ana.
Harrah wants to change course on the delayed 37-story mixed-use development in downtown Santa Ana and instead build 602 market-rate apartments, the Orange County Business Journal reported.
The shift reflects a market reshaped by remote work and stubbornly high office vacancy, Harrah said.
“The uses have changed because the economy has changed,” Harrah told the outlet, noting the pandemic’s lasting effects on office markets across Greater Los Angeles.
The latest proposal for the 800,000-square-foot project at 1109 North Broadway adds 187 units compared to the 2020-approved plan, along with an eight-level parking structure, a grocery store and about 70,000 square feet of retail.
The project dates back more than two decades, as Santa Ana officials approved an office tower for the site in 2004.
In 2020, Harrah cut down the planned office space and added 415 residential units, which was approved that year. If completed, the 37-story tower would be the tallest building in Orange County.
Rather than building affordable units on-site, Harrah is opting to pay a $4.7 million in-lieu fee that would go into the city’s general fund.
“I felt it was a better use of the money,” Harrah said. “That money is used to build parks and things in the city, rather than putting 19 affordable units out of 600.”
The project is expected to cost about $400 million. Financing for the endeavor has not yet been arranged. Harrah will need city approval to boost the housing from 415 to 602 units.
The developer is pitching the effort as a catalyst to transform the Civic Center area into a housing hub, especially as the city and Orange County faces a housing crisis.
Apartment vacancy in Orange County is below 2 percent, Harrah said. Meanwhile, the city’s office market hasn’t rebounded from the pandemic, with direct vacancy at the end of last year sitting at 21.5 percent, per Kidder Mathews. Office vacancy in Santa Ana was at 10 percent In 2019.
“By the grace of God, I’m glad we didn’t build it as a commercial building,” Harrah said. “Because it would be empty with all the rest.”
— Chris Malone Méndez
Read more
Los Angeles
Trump’s tax law could help raise office tower in Santa Ana
Commercial
Los Angeles
WareSpace makes California debut with $32M Santa Ana warehouse buy
Commercial
Los Angeles
LA office availability increases “amidst uncertainty over industry consolidation”