Construction of the 1.8-million-sf project will begin by the middle of next year, officials at Los Angeles-based Lowe say. Called The Exchange, it will rise on the former aerospace plant's 104-acre site at Crenshaw Boulevard and the Century (105) Freeway.
The master plan for the development was approved by the Hawthorne City Council earlier this week. It calls for construction of a 260,000-sf retail center that will be anchored by a Lowe's Home Improvement Warehouse, the North Carolina-based chain that is unrelated to the development company.
Lowe Enterprises also will redevelop some of the existing buildings on the site to create 375,000 sf of office space and 260,000 sf of R&D space. Another 600,000 sf of industrial and warehouse space—about half of which will be used as a data center by AT&T —will be built from scratch.
Craig Furniss, the Lowe SVP in charge of the project, says that having AT&T and Lowe's Home Improvement at The Exchange will make it easier to fill the additional space. "Tenant interest in our development continues to be strong despite a slower economy, " he says, adding that many other prospective tenants are interested because the site is within minutes of LA International Airport, the twin ports of Los Angeles and Long Beach, and several major freeways.
An independent economic-impact analysis conducted by LA-based Kosmont Partners projects that the development will create between 2,000 and 3,000 jobs. It will also generate about $3 million in annual revenue for the city, the study says.
"The Northeast side of Hawthorne has long been promised a retail center and good jobs," says Hawthorne Mayor Pro Tem Ginny Lambert. "I am very happy that we are now able to fulfill that promise."
The city has been entertaining various proposals for the site ever since Northrop Grumman began phasing out its operations there in the 1990s. Lowe Enterprises purchased the parcel in 1999 and then began the laborious task of designing a project that would make most city officials and local residents happy while still providing an acceptable financial return.
To help gain city approval, Lowe Enterprises agreed to add turn lanes, automatic signal-timing systems and make other improvements at 10 intersections surrounding the parcel. It will also pay Hawthorne $1.4 million in development fees.
The project is one of the most ambitious ever undertaken by privately held Lowe Enterprises, which was founded by chairman and CEO Robert Lowe in 1972 as a five-person operation and since has grown into a $1-billion-a-year empire that employs more than 7,000 people in the US and Europe. The company is currently developing more than 3 million sf of commercial projects in Southern California and also manages more than $3 billion in real estate assets on behalf of its pension fund clients.
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