City’s old names grace trendy new residences
As stately downtown buildings of yesteryear are reborn as high-end lofts and condos, some storied pasts are being dusted off too.
By Cecilia Rasmussen
Times Staff Writer

March 25, 2007

As downtown’s new residential conversion marches deeper into old Los Angeles, architects and developers are tapping into history, paying homage to pioneers and perhaps to a tree.

Some of the building names — Brockman, Blackstone, Douglas — were practically forgotten in the years when downtown sank into decay. Now, many of the buildings are enjoying a revival as they’re converted into high-end lofts and condos. Downtown’s mostly young new residents tell one another, “I live at the Higgins” or “at the Douglas.”

Art Astor isn’t in that demographic. He’s 82, and he may be one of the few who bought a piece of downtown for reasons of nostalgia. He owns a sixth-floor corner loft in the newly refurbished Chapman Building at 8th Street and Broadway.

“My father had his law office here from 1930 to 1960,” Astor said in a recent interview. He owns four radio stations and a private Anaheim museum of vintage cars and antique radios and telephones.

Astor recalled going downtown every Saturday with his father. From the office window, he could see every theater along Broadway.

“He’d give me a dime and send me off to the movies while he worked,” Astor said.

“All of his mail was addressed to A.M. Astor at the Chapman building,” Astor said. “Street addresses weren’t necessary. Everyone knew the Chapman Building.”

His father, who changed his name from Astor Arakelian to A.M. Astor, was an Armenian who immigrated to America in 1910, at 21, to escape slaughter in Turkey, Astor said.

“His parents were killed by soldiers right in front of him, when he was about 4 years old,” he said. “He ran to a neighbor’s house and hid under her skirt. She turned him over to an orphanage, where he was educated by Methodist missionaries.”

Once in the U.S., Astor said, his father “worked as a soda jerk while putting himself through USC law school.”

The Chapman, a 13-story beaux arts building, was constructed in 1912, more than a decade before Broadway became downtown’s jazziest entertainment district, lined with motion picture palaces. The Los Angeles Investment Co. built it at a cost of $1 million. Designed by architect Ernest McConnell, the building was said to be fireproof. It has mahogany doorways, sweeping marble stairways and wrought-iron letters “LA” marking each stair railing.

“It’s built like a battleship,” Astor said, referring to the strength of the materials.

In 1920, Charles Clarke Chapman — Fullerton’s first mayor and the chief benefactor of Chapman University — bought the building for $1.6 million. The so-called Orange King of California — who built his fortune on citrus and real estate — made it his headquarters. He added bronze elevator doors ornately embossed with the letter C.

At the Chapman, “everyone advertised with gold lettering on the windows,” Astor said. But in the 1930s, business was so slow that his father “was almost swatting flies.” That is, until the day a poorly dressed elderly woman walked into his office with a brown paper bag.

The woman, whose name Astor has forgotten, told the senior Astor that every day she’d meet a man in Pershing Square. They shared coffee and muffins and became friends. One day the man didn’t show up, but someone else did: a stranger who handed her the bag. Her friend had died the night before, he explained, leaving her everything he owned. As the stranger walked away, the woman opened the bag and saw “stocks and bonds worth nearly $400,000, even in the late Depression.”

As she walked out of the park, the woman looked up and saw Astor’s name and sign on his office window — “A.M. Astor, Attorney at Law.”

“She had no idea that her friend had been wealthy, and my father became her executor.”

Greg Fischer, an aide to Councilwoman Jan Perry, wields such knowledge of downtown’s historic past that you’d think he’d lived there since the early 1900s. He can rattle off details about old buildings as if they were family.

Here are a few of downtown’s residential projects that have pioneer names:

• Brockman Building, 530 W. 7th St. In 1912, mining magnate John Brockman staked half a million dollars that 7th Street would become the heart of downtown’s shopping district. He was right. The 13-story renaissance revival building at 7th Street and Grand Avenue was designed by architect Harrison Albright. Brockman leased several floors to J.J. Haggarty clothing store.

By the mid-1920s, the sidewalks and electric streetcars were bustling with shoppers. Brooks Brothers traditional men’s clothing store anchored the building for decades.

• Douglas Building, 257 S. Spring St. Thomas Douglas Stimson, a Chicago and Seattle lumber baron, industrialist and financier, made a fortune before retiring to Los Angeles in 1890. He turned to banking, built the most expensive mansion in the city and erected a 42-room boarding house at 3rd and Spring streets, called the Stimson Block.

He dreamed of another grand office complex across the street, handing the task to San Francisco architects James and Merritt Reid, whose credits include the Hotel del Coronado in San Diego. Stimson died in 1898.

His family continued the project and etched “Douglas” deeply into terra cotta over the entrance, probably in honor of his middle name.

But it could also have been a nod to the type of tree — Douglas fir — whose wood was shipped from Stimson’s timberlands in Oregon and Washington and used to decorate the interior.

• Blackstone’s Department Store Building, 901-909 Broadway. Nathaniel Blackstone, former business partner and brother-in-law of department store founder J.W. Robinson, began building the flagship of his own emporiums in 1917.

The six-story beaux arts building at 9th Street and Broadway was designed by architect John Parkinson. In the 1920s, Blackstone hired beauty specialists to give tips on hairstyles and makeup, provided customers with mah-jongg lessons and offered classes in interior decorating and landscape gardening, according to Times stories of the era. Blackstone died in 1930.

• Roosevelt Building, 727 W. 7th St. Named for President Theodore Roosevelt, the renaissance revival office building opened in 1927. The Roosevelt was once a popular address for doctors and dentists.

Before Christmas in 1943, an aggrieved patient shot and killed his surgeon, then killed himself. In 1946, the state Supreme Court ruled in Hunt vs. Authier that the slain surgeon’s heirs had the right to collect damages from the killer’s estate. Victims’ families have filed wrongful-death suits ever since.

By ALEX VEIGA AP Business Writer
News Fuze
Article Launched:03/16/2007 02:04:31 PM PDT
LOS ANGELES- For years, mortgage banker New Century Financial Corp. was flying high amid the strong housing market and a seemingly insatiable demand by borrowers for sub-prime home loans to chase the American Dream.

Riding historically low mortgage interest rates, the Irvine-based company became the second-largest provider of expensive home loans to borrowers with less-than-perfect credit.

Just four months ago, CEO Brad A. Morrice gave a roundly positive outlook at an investors’ conference.

Despite acknowledging the growing challenges of sub-prime lending, Morrice said it was “an excellent business for the long term.”

“We don’t have a great crystal ball. I can’t tell you when everybody gets healthier,” he said. “What I can tell you is we’re going to be there when it happens and ready to profit on the next up cycle.”

Now, faulty accounting and rising mortgage defaults have left New Century on the brink of bankruptcy. Its stock has collapsed and creditors are pressuring it to buy back billions of dollars in loans.

“They don’t have the liquidity to operate the business,” said Matthew Howlett, an analyst with Fox-Pitt, Kelton in New York. “Clearly, it’s in rough shape.”

New Century was founded as a mortgage lender in 1995 by Morrice, Robert K. Cole and Edward F. Gotschall.

Its primary focus was providing sub-prime loans that it then sold to investment banks, using that revenue to fund more consumer loans. In 2003 and 2004, Fortune magazine listed New Century on its list of 100 fastest-growing companies.

Like other sub-prime lenders, New Century profited during the real estate boom, when appreciation rates soared and equity protected most homebuyers from defaulting on their loans. Most could simply refinance or sell homes at a big enough profit to pay off mortgages and move on.

Investment banks also jumped in, eager to buy loans from sub-prime lenders then slice them up into bond products to sell on Wall Street.

“New Century was the prime beneficiary of it, as they were sort of in the sweet spot, having the sales force out there to capture the growing market,” Howlett said.

That helped New Century stock hit its historic high of $65.95 in December 2004. Its earnings a year later also reflected a company that was riding high, despite mounting concerns over the weakening housing market. New Century posted net earnings that year of $411.1 million, or $7.17 a share, up from $375.6 million, or $8.29 a share, in 2004.

Its loan production for 2005 hit a record $56.1 billion as it racked up four consecutive dividend increases. However, it held off on providing Wall Street with full-year guidance for earnings per share or loan production.

By 2006, the housing downturn had led to weaker price growth and even declines in some pricier markets. Homeowners were left with few options if they fell behind on payments.

Default rates and foreclosures shot up as a result. New Century, like other sub-prime lenders, began to see loans go bad.

That spelled trouble, as New Century’s deals with investment banks required the company to buy the loans back if borrowers default early in the loan.

“Now that housing is flattening or declining, all the problems in the industry are coming to the surface,” said Chris Brendler, an analyst with Stifel Nicolaus.

Despite the faltering market, New Century’s financial reports showed continued profitability through 2006.

Morrice hinted in November that he wasn’t thrilled with its third-quarter performance, but he reassured investors that New Century was nevertheless on sound financial footing.

A company statement boasted it was able to “add liquidity, add financial strength,” even though it expected loan repurchases to increase.

“As we look at our own situation, we feel, despite the challenging market, that we’re very well positioned to compete and continue to profitably grow market share,” Morrice told investors at the time.

On Feb. 7, the outlook changed drastically.

New Century informed the Securities and Exchange Commission that it would have to restate financial results for the first three quarters of 2006. The problem: The company had failed to accurately tally losses from loan repurchases.

Earlier this month, the company said it be unable to file its annual report on time, but advised it expected earnings for 2006 would be significantly lower than previously reported.

This week, New Century revealed its lenders had cut off funding or announced their intent to do so. It also said it did not have enough capital to pay outstanding loan repurchase obligations.

The company also stopped accepting new loan applications.

Speculation grew on Wall Street that the company could be close to filing for bankruptcy protection as its creditors began demanding payments. The apparent financial meltdown spurred several analysts to change their outlook on New Century stock, advising investors to dump it.

On Monday, the New York Stock Exchange halted trading of New Century shares and said it would seek to have the company’s stock delisted from the exchange.

The company’s stock has tumbled 96.8 percent since its 52-week high of $51.97 last May.

It also faces federal probes by the SEC and the U.S. Justice Department. And shareholders, angry over their losses and alleging mismanagement by the company’s directors and officers, have fired off several lawsuits.

“Most likely, the final outcome will be determined in a bankruptcy type auction,” Howlett said. “Clearly, it’s going to be bid out and segmented.”