Historic Refinancing Leads a Downtown Revival
Thanks to HUD financing from PNC, a neglected district of downtown LA is vibrant again.
The Old Bank District, a fixture of downtown Los Angeles since 1905, has been used as an evocative background in hundreds of movies, commercials and TV shows.
But on the other side of the cameras, the district was old and tired, dotted with underused buildings and wind-whipped parking lots. The Old Bank itself was an empty shell.
In 1998, developer Tom Gilmore had a vision - a Cinderella transformation of three of the historic buildings into a neighborhood that would attract the young, the hip - and even families - with glamorous loft-style apartments and condominiums, restaurants, art galleries and vibrant nightlife.
PNC has played a leading role in the drama from the opening curtain, providing a $33,600,000 HUD 221(d)(4) construction/permanent loan to finance reconstruction. In 2000, the first building - the 70-unit San Fernando - opened, followed the next year by the 104-unit Hellman Building and the 56-residence Continental.
Ten years later, Gilmore had not only fulfilled his vision, he accomplished something many said couldn't be done: a sustainable revitalization of downtown LA. The Los Angeles Downtown News called the Old Bank District Lofts the Project of the Decade. In announcing the honor, the publication noted, "without the Old Bank District, downtown would not have seen the residential revolution of the past decade."
"At the time the project opened, it was the largest, newest multi family development that had ever been done in downtown LA. But that was just the beginning. Since then more than 20,000 people have moved into the area," recalls PNC Real Estate originator Mark Ragsdale.
In 2011, PNC provided a HUD 223(f) loan for the refinancing of the property. "The Old Bank District redevelopment started as an experiment. Now it's a success story," Ragsdale notes.
"We were able to refinance the existing HUD debt with a 35 year mortgage, locking in a fantastic 4% rate," Ragsdale continues. "The new financing paid off all existing subordinate debt. The city can now redeploy its investment. The developer has met his historic obligation and is now free to develop the original Old Bank. In addition, Gilmore has seen additional annual cash flow of $400,000."