Gavin Newsom Cuts Legal Red Tape for $2B Project in LA

Gov. Gavin Newsom has tipped the scales to help win approval for a $2 billion housing, hotel and retail project in Downtown Los Angeles.

The governor issued an order to shorten the window for any environmental lawsuits against the 1,500-unit project by Denver-based Continuum Partners at Fourth Street and Central Avenue in Skid Row, next to the Arts District, the Los Angeles Times reported.

“For decades, we’ve let red tape stand in the way of these kinds of critical housing projects — and the consequences are in plain view all around us,” Newsom said in a statement. “Now we’re using California’s infrastructure law to build more housing, faster.”

The 7.6-acre project, dubbed Fourth & Central, would include 1,500 homes, 410,000 square feet of offices, plus a 68-room hotel along with shops and restaurants. An environmental review was launched in early 2022.

The development, announced in 2021, would raze a 130-year-old cold storage warehouse next to the Arts District and Little Tokyo to make way for 10 buildings containing 2.3 million square feet, including a 44-story residential skyscraper, with connecting walkways and parks.

Two buildings, including the highrise, were designed by Ghanaian-British architect David Adjaye, lead designer of the National Museum of African American History & Culture in Washington, D.C.

Continuum aims to construct 572 condominiums and 949 apartments, with at least 214 units set aside as affordable housing for low-income households.

The project requires approval from the L.A. City Council. If approved this year, the developer is expected to break ground next year and complete the project in five to seven years.

This week, Continuum announced an agreement with the Los Angeles/Orange Counties Building and Construction Trades Council to build Fourth & Central with all union labor.

Newsom’s decision aims to shave years off the construction timeline by fast-tracking a judicial decision in any litigation filed against the project under state environmental laws.

The expedited litigation timeline does not exempt the project from analysis under the California Environmental Quality Act, or CEQA, the 1970 law that requires developers to identify and, if possible, eliminate negative environmental effects, according to the Times.

It would shorten the length of any potential lawsuit against the project, however.

Litigation under CEQA has long been blamed for killing or dragging out construction, especially for large developments. Newsome’s action aims to wrap up litigation within nine months instead of what’s typically three to five years.

Edgar Khalatian, an attorney with the firm Mayer Brown who represents Continuum, said the rules will provide Continuum cost savings and development certainty while not diminishing the rights of possible opponents.

“There’s really nothing negative for anybody except for a petitioner, and even for a petitioner it’s just their lawyer has to work weekends,” Khalatian told the Times.

Challenges to the project, environmental or otherwise, may come from residents concerned about a gentrification of Skid Row and its potential to displace low-income residents. Groups from Little Tokyo are concerned it would reduce the neighborhood’s role as the historic center of the region’s Japanese community.

— Dana Bartholomew