Playa Vista: From Spruce Goose to Google
October 23, 2017
Seventy-five years after Howard Hughes built a hangar to house construction of the Spruce Goose, the biggest plane in the world, Google is gutting the massive structure for its Los Angeles headquarters.
Peeking through cracks in the gray metal cladding, the giant rounded girders of the original hangar are clearly visible, stretching wide enough to accommodate the wooden flying boat’s 320-foot (98 m) wingspan. Though Google’s project is shrouded in Howard Hughes–style mystery, the company is reportedly building a three-story steel complex within the space, including more than 400,000 square feet (37,000 sq m) of offices.
The hangar is part of the final phase of Playa Vista, one of the largest and most debated master-planned developments in Los Angeles’s history. For decades, developers, environmentalists, and planners squabbled over the fate of the west L.A. land, which Hughes used as an airport and a manufacturing plant for his dream planes. From the attempt by Hughes heirs to create a skyscraper community to visions of the site as a new Hollywood, Playa Vista has been a long-running soap opera, full of celebrities and unexpected twists and turns.
As recently as five years ago, with projects stalled and office vacancy rates soaring, many observers questioned whether the mixed-use concept was appropriate in a city built on suburban sprawl. “There was quite a bit of skepticism about how it would perform,” says Petra Durnin, CBRE’s head of research in southern California. “It didn’t seem like it would work.”
Today, the 460-acre (186 ha) development is almost completely built out, and Playa Vista is home to more than 10,000 people. A Main Street–style retail zone opened in 2015, and the office space has developed as “Silicon Beach,” home to regional offices for Yahoo, YouTube, Facebook, and Microsoft, with space commanding some of the highest rents in the city.
Once viewed as an early experiment in postmodernism, Playa Vista is now a living, breathing community, a large-scale attempt to create a live/work/play environment.
“Finally, now it is what it was envisioned to be,” says John Miller, head of the Los Angeles office of developer Tishman Speyer.
Density Comes to West L.A.
On a sunny weekday afternoon, Playa Vista is an island in the midst of the hubbub of Los Angeles. Not far from the crowded interstate highways 405 and 10, the streets and parks are quiet except for a few joggers and couples taking power walks. The east side of the property is bordered by hills and the campus of Loyola Marymount University; the southwest end abuts carefully preserved marshlands.
The master plan for Playa Vista’s flat landscape calls for low-rise clusters with distinct residential, retail, and commercial zones. Instead of the rigid grid system of wide roads common in many southern California neighborhoods, Playa Vista is a jumble of narrow streets with sidewalks. It has 29 parks, including a central park with a bandstand, and three dog parks. An elementary school focused on science, technology, engineering, and math (STEM) opened in 2012, and the Runway, a 300,000-square-foot (28,000 sq m) residential and retail complex completed two years ago, includes a Whole Foods Market, movie theaters, and an array of restaurants.
There is a buzz of activity throughout the project. “A Blue Bottle Coffee just opened,” says Alison Girard, director of marketing at Brookfield Residential, Playa Vista’s community developer, as she shows a visitor a map of the property. The very hip Oakland-based coffee chain, promising “coffee made from beans that are less than 48 hours out of the roaster,” is part of the Brickyard, a sleek new white-brick complex, designed by architect Michael Maltzan and Gensler, that opened this year with more than 400,000 square feet (37,000 sq m) of office space.
Calgary-based Brookfield bought 110 acres (45 ha) of Playa Vista in 2012 for about $250 million from Playa Capital, an investment group that includes Goldman Sachs and Morgan Stanley. Since 2014, Brookfield Residential and other developers have built about 2,800 homes, primarily apartments for rent, as well as condominiums and detached homes that typically sell for $1 million to “the high $4 millions,” Girard says.
Playa Vista has almost reached its planned total of 6,046 homes, including about 3,300 rental apartments and 360 senior and assisted living units. The plan calls for a total of 450 “controlled-price unit” homes, reserved for community-serving employees like firefighters and teachers who are first-time homebuyers, work within five miles (8 km) of Playa Vista, and meet income restrictions.
The first phase of the project, built between 2000 and 2012, had more than 3,200 homes, primarily targeting first-time homebuyers and young couples. For the second phase, Brookfield focused more on larger homes, 1,800 to 4,000 square feet (167 to 372 sq m), targeting growing families. About 30 percent of the buyers in the second phase were already residents of Playa Vista, Girard says. Many had moved in as singles, but were now married and had children, she says. The STEM elementary school was “a game-changer,” Girard says.
About 6 percent of Playa Vista homeowners work in the district; 28 percent of people working in Playa Vista live within three miles (5 km), according to Brookfield’s surveys. The property does not connect to the city’s growing rail system, but a shuttle bus roams the property, providing a link to bus stops in surrounding communities. Extra shuttles run on movie nights or for concerts in the park. Several companies offer their employees free bikes.
Playa Vista “brought much-needed density,” to west Los Angeles, says Stuart Gabriel, director of the Ziman Center for Real Estate at the University of California, Los Angeles. “It’s a very walkable area—very different from the rest of L.A. in that respect.”
Staying off the highways is a primary goal of most Angelenos. “The car has always been king in southern California,” Gabriel says. “People are craving areas that diminish focus on the automobile.”
A Tortuous Path
For decades, the 1,087 acres (440 ha) Hughes left to his family, constituting the largest chunk of undeveloped land on the Los Angeles Westside, was mired in political battles and litigation and subject to the roller-coaster of real estate economic cycles. In many ways, Playa Vista’s struggles mirrored the evolution of coastal real estate development in southern California. The project first came under review in the 1980s, when the environmental movement was gaining strength, fighting the type of high-density projects that defined the state in boom years.
Early plans for Playa Vista, developed by the Hughes family, called for an office tower and shopping mall–focused development similar to the existing Century City in Los Angeles. The plan quickly met with resistance from neighborhood and environmental groups who said it would destroy the sensitive Ballona Wetlands, the marshes on the southwestern edge of the property. The development plan stalled as opposition coalesced over concerns about traffic, air pollution, and the appropriateness of skyscrapers along the coast.
In 1989, Maguire Thomas Partners, one of the largest builders in Los Angeles, took over the project and spent eight years trying to turn the site into a modern mixed-use development, incorporating many of the ideas of new urbanism that were growing in popularity around the country. Small, low-rise coastal cities like Santa Barbara were used as a model. “Playa Vista was the beginning of the recognition that planning standards from the post–World War II era were wrong and counterproductive,” Nelson C. Rising, a senior partner for Maguire Thomas, told the New York Times in 2007.
In 1995, the project veered in a new direction, when the recently formed Dreamworks SKG—created by the partnership of entertainment industry titans Steven Spielberg, Jeffrey Katzenberg, and David Geffen—announced plans to turn Playa Vista into the home for its new movie studio, with modern soundstages and production facilities.
But the plan fell apart as Dreamworks’ fortunes ebbed and flowed, and the principals’ enthusiasm waned as litigation continued over environmental impacts. In 1997, faced with financial issues, Maguire sold the project to Playa Capital, the group led by Goldman Sachs and Morgan Stanley and including Oaktree Capital and several pension funds.
Development began in earnest in 2000 under a master plan that called for about 70 percent of the original Hughes property to be set aside for open space and parks. The final plan was a hybrid of the different plans, says Ruth Galanter, an environmentalist who represented the area on the L.A. City Council from 1987 to 2003. A road cutting through the wetlands was eliminated and open space was preserved, but many of the original high-density mixed-use ideas proposed by Maguire Thomas were watered down in the final design.
Maguire Thomas’s concepts “were light- years different than anything going on in L.A. at the time,” Galanter says.
The community was just starting to take shape in 2008 when the national financial crisis hit. The office market ground to a halt; several developers working at Playa Vista faced credit issues. At that point, many of the key amenities had not been built, including the retail center and a promised community center. By 2012, more than 40 percent of the existing office space was vacant, according to CBRE data.
Tech, Media, and Entertainment
Since then, Playa Vista has benefited from a “Google effect,” industry experts say. The tech giant’s commitment in 2014 to buy 12 acres (5 ha) next to the historic Spruce Goose hangar for $120 million signaled to tech companies that Playa Vista was going to be something more than an afterthought office space market.
Even before Google made headlines, developers were eyeing Playa Vista’s office land, especially in the depressed market. In 2010, a partnership headed by L.A. developer Wayne Ratkovich, in a joint venture with Penwood Real Estate Investment Management, paid $32.4 million for 28 acres (11 ha), including the Spruce Goose hangar and the surrounding buildings, known as the Hercules Campus. Last year, Ratkovich sold to a Japanese investor for $270 million the hangar and three surrounding buildings that had been leased to Google, according to media reports.
As the Campus at Playa Vista started to take shape, there was little land or office space available on the Los Angeles Westside, especially in Venice and Santa Monica, the traditional homes for media and tech companies in Los Angeles.
“We’re kind of the last game in town,” says Miller of Tishman Speyer, which has developed 11 buildings in three phases in Playa Vista, including the new Brickyard. “There has been a tremendous amount of space leased in the last three or four years.”
Beyond simply being a “new Silicon Valley,” Playa Vista has developed as the point of convergence among the tech, media, and entertainment worlds at a time when more and more tech companies are trying to break into video and television. This is not the tech of programmers and chip heads: Playa Vista is home to Fox Interactive Media, IMAX, and the University of Southern California Institute for Creative Technologies, as well as big advertising agencies Group M and Ogilvy & Mather.
For Fullscreen, a company focused on creating videos for social media, proximity to Google’s YouTube office was a key driver of its decision to move to Playa Vista. The company spent two years searching Los Angeles for the right space, says Sheauen Chung, senior vice president of human resources for the company. Full Screen wanted access to convenient off-street parking near production facilities, and the type of lifestyle options essential to recruit and retain talent.
The company eventually settled on 58,000 square feet (5,400 sq m) in i|o at Playa Vista, a two-building complex across the street from the Spruce Goose hangar. “We felt we needed to be where things were progressing,” Chung says.
The six-story buildings that make up i|o were first developed in 2010, but were empty in 2014 when Clarion Partners bought the 302,000-square-foot (28,000 sq m) complex for $132.7 million. The buildings went through a complete makeover—new outdoor spaces, balconies, floor-to-ceiling glass, and separate entrances for tenants—designed to appeal to the new generation of companies.
“It didn’t have the authentic, cool, creative design element,” says Khalid Rashid, senior vice president of Clarion. Demand remains strong, he says. “We see the clustering effect,” Rashid says. “In this submarket, demand is driven by media and advertising.”
In the past two years, Playa Vista has become “the hot next submarket” in Los Angeles, Durnin says. Rental rates for prime office space in Playa Vista averaged $5.24 per square foot ($56.40 per sq m) in the second quarter of 2017, up 18 percent from $4.44 per square foot ($47.79 per sq m) a year earlier, according to CBRE research. In contrast, the average rent in Los Angeles County for the second quarter of 2017 was $3.47 per square foot ($37.35 per sq m), a 5 percent increase from a year earlier.
Companies are looking for alternatives to the high-density office complexes and towers found in other parts of the city, Durnin says. “There is demand for new campuses,” she says. “It doesn’t have to look like a cement fortress.”
Playa Vista still has its critics. A few years ago, a local professor referred to the “aesthetic doldrums” of the designs. In Los Angeles, there is an ongoing debate: did the project achieve the dream of creating a modern, walkable mixed-use project, or was it an ambitious project that fell short of its potential?
“What is better than I thought it would be is the mix of recreation and work places,” Galanter says. The project would have benefitted from stricter design guidelines and a more integrated approach to mixing the residential and commercial space, she says. But she also knows several people who opposed the project who now live there.
These days, Playa Vista is a functioning community. Families are attending the concerts in the park, the restaurants are packed on Friday nights, and there is a weekly farmers market.
Playa Vista has been able to “create an urban feel in a somewhat suburban area,” says Manny Gonzalez, a principal in KTGY, an architecture firm that worked on residential parts of the project. “That’s what Playa Vista is doing well.”
More than anything, Playa has succeeded in creating the “feel of neighborhood,” he says. “There is a feel to it, a vibrancy. Come down on a Friday or Saturday, and it’s pretty cool.”