Long Beach Moves to Raise Its Tertiary-City Status

LONG BEACH, CA–The Los Angeles submarket of Long Beach has a long history of revitalization. And with the introduction of more retail, office and hospitality properties, this Los Angeles submarket (population just north of 462,000) is looking to redefine itself and become the next great SoCal destination, according to principals in the local office of Lee & Associates.

In an exclusive GlobeSt.com Q&A, Sean Lieppman, senior associate, and Noel Aguirre, principal, both of Lee’s local office, do a deep dive into this community’s goals to become a live/work/play destination.

GlobeSt.com: You’ve both said that Long Beach has done much to draw both developers and investors as well as businesses in general. What steps have they taken/?

Sean Lieppman: The City has streamlined planning processes for development entitlements and approvals. In so doing, they’ve cleared the path for new and adaptive re-use projects. The City is motivated and quick to meet with principals and guide them through the processes.

GlobeSt.com: Why? What was driving the effort?

Noel Aguirre: The initial change in mindset came during the recession. While Long Beach didn’t sustain the kind of value inflation other locales did, there was a lack of funding that led to service cutbacks. They realized they had to figure out how to be more competitive in the marketplace and attract the private sector. That realization has recently kicked into high gear with the pro-development mindset of Mayor Robert Garcia and the new City staff.

There’s also been zoning updates, including the Downtown & Midtown Specific Plans as well as the recently approved 2040 General Plan, touching on land use and urban design elements. It addresses such issues as housing demand and development, increasing walkability and creating more local job opportunities.

GlobeSt.com: Any proof of success?

Aguirre: Douglas Park is a good example. It’s a 260-acre master-planned development that used to house Boeing manufacturing operations. With industrial, retail, office, medical, and hospitality assets, it’s adding to the 24/7 environment Long Beach intends to become. Douglas Park has attracted the likes of Virgin Orbit, Universal Technical Institute and Mercedes-Benz as well as retail tenants at LBX including Whole Foods 365, Orchard Supply Hardware, and Nordstrom Rack.

Lieppman: As a result of the city’s efforts, in addition to the traditional local and regional investors and developers, we’ve seen an influx of institutional capital entering the market over the past few years. In fact, there’s currently some $3.5 billion in development.

Many of these developments have stemmed from the sale of the former Long Beach Redevelopment Agency (RDA) sites primarily located in Downtown, Central and North Long Beach. These sites presented incredible opportunities for developers to come in and acquire large land parcels at competitive prices.  These sites are all committed but they will set the stage for the next wave of development projects.

GlobeSt.com: So, let’s go sector by sector. Retail?

Lieppman: There’s more than 500,000 square feet of retail in development, including CenterCal’s 100,000 square feet at 2nd & PCH; Burnham USA’s 160,000 SF at Long Beach Exchange (LBX); and around 250,000 SF of ground floor retail space at various mixed-use projects.

GlobeSt.com: And what of office?

Aguirre: There’s nearly 580,000 square feet of office under construction.  The majority of that is the Civic Center, which is a $520-million public/private partnership with Plenary Edgemoor for the new 274,000 square foot City Hall building and the 237,000-square-foot Port of Long Beach headquarters.

In addition, there’s roughly 3,500 apartment units in development as well as both new and adapted hotels. One is a new convention high-rise hotel by Seattle-based American Life, Inc. and another project of note is the adaptive re-use of the Breakers of Long Beach senior center that will become a boutique hotel. In all, there are more than 700 rooms currently in the pipeline in Downtown alone.

GlobeSt.com: So, how close is Long Beach getting to realizing its goal of becoming a 24/7 destination?

Aguirre: Long Beach is experiencing a renaissance, and a lot of that is driven by millennials coming in. It’s a coastal community that also offers urban  and suburban lifestyles. Plus, it offers residential rents that are discounted compared to Orange County and Los Angeles. Long Beach is strategically located between them, with a comprehensive transit system that delivers potential residents into the heart of L.A. The city planners are really spot-on in terms of what they want to achieve.