From the outside, the former toy factory at 1855 Industrial St. isn't much to look at. Tucked inconspicuously between the Warehouse and Arts districts, it's a boxy concrete structure surrounded by cold storage facilities, a long-defunct biscuit factory and a truck-washing depot.

Nonetheless, the developer of the 80-year-old building, LinearCity, hopes to position it as a catalyst for L.A.'s version of Tribeca, Manhattan's once gritty warehouse district that now boasts million-dollar lofts.

Even more compelling, at a time when most of Downtown's housing is rental, the Toy Factory Lofts has tapped into a relatively new but in-demand market - for-sale housing. At 119 units, the $25 million project is the largest of its kind in the city. It officially opens for sales on Feb. 14, but already more than 100 pre-qualified buyers are clamoring for a slice of urban life, priced at about $350,000 to more than $600,000.

"I remember when they started to develop the meat packing district of New York City," said Leonard Hill, one of three partners who make up LinearCity. "Everyone said that of all the bum areas in the city, it couldn't possibly be developed. Now, quality condos in that district are over $1,000 a foot. Downtown L.A., sparked by Disney and other developments, is a city with a very bright future."

According to the developers, that future is just around the corner. Within three years the group envisions multiple loft projects, some of which it plans to develop, as well as coffee shops, restaurants and bars. Even five years ago that vision would have been a tough sell. But with the median price of housing in L.A. County topping $350,000, and the supply of single-family homes in short supply, the appeal of urban living is spreading like wildfire. From L.A. to Dallas to Chicago to New York, decaying urban centers are turning to loft building as a way to revitalize their downtowns.

Fanning the flame of Downtown's renaissance are additions like the Walt Disney Concert Hall, a Ralphs supermarket to be completed next year, and nearly 2,500 units of housing set to open by year's end

"People in Southern California are thirsty for the taste of the urban lifestyle," said Hamid Behdad, director of Mayor Jim Hahn's adaptive reuse program. "We've had a little bit here and there, like Third Street Promenade in Santa Monica and in Old Town Pasadena, but they're commercialized. We've looked at New York and said if they can do it, we can do it too."

Standing atop the roof of the Toy Factory Lofts, where residents will soon lounge around the pool, it's easy to see the project's appeal. Wide vistas that take in the Downtown skyline, San Gabriel Mountains and L.A. River are a heady incentive for putting up with big-rig traffic, the nearby homeless or a lack of street life. A lower garden deck will host barbeques and urban picnics, creating a total of 5,000 square feet of open space.

"In effect, what Toy Factory is metaphorically is an urban cruise ship, a great ocean liner on which the quality of life is judged not only by the cabin you buy, but by the experience on the deck space," Hill said. "We've been able to achieve something that is virtually unique in Downtown development, which is a location in the urban core that also provides a nearly unlimited panoramic vista. That's the fantasy of being in an urban environment where you're not contained within the caverns of skyscrapers."

The Toy Factory's interior finishes are minimal. Units range from 780 to more than 2,000 square feet, and feature polished concrete floors, exposed pipes and ducts, and 11-foot ceilings. Bathrooms contain oversized, heavy-duty tubs, and kitchens have non-porous Caesarstone counters and stainless steel sinks. Three units on the third floor feature private garden access and come at premium prices - more than $500,000. The hallways and doorways are extra wide, a remnant of the building's past life when trucks once rumbled through the corridors.

But the selling point in every unit is the view through the original picture windows. To keep noise at bay, every piece of glass in the building was replaced with double-paned thermal insulated windows.

"I've always thought of the Arts District as the eye in the center of the storm," said Paul Solomon, who founded LinearCity. "It's very quiet here compared to the freeway noise and the rest of Downtown, which is more hectic. That's a nice quality about the area, but some people like the ambient noise during the day."

Solomon says the noise and grit is simply part of the area's rough-around-the-edges appeal. Solomon himself resides in one of the two small live-work buildings he acquired through LinearCity. Shortly after graduating law school, he worked as a real estate attorney for Paul Hastings. But after five months, he said he realized he would be better suited as a developer.

"The immediate lead for me to come here was I was watching a movie in November 1999, and it was The Limey with Terence Stamp," he said. "There were scenes filmed in the Arts District and when the camera panned across to Stamp and followed him through some of the film's intense scenes [there], I could tell that was perhaps the area I was looking for."

Ready to take on a bigger project, Solomon came across the toy factory, just off Sixth and Alameda streets. Originally built by the land development arm of Southern Pacific Railroad in 1924 for the Star Truck Warehousing Company, the building was purchased in 1974 by Ace Novelty and used as a factory. It was later acquired by the Play-by-Play Company. LinearCity bought the building after the owner declared bankruptcy. Renovations began last September, and move-in starts in April.

"It's significant that we're doing this project with no outside equity, no public funds, no tax subsidies, no third party investors," said Hill, who made his name and fortune as a writer and television producer. "LinearCity is the sole responsible entity for all aspects of design, financing and construction."

Yuval Bar-Zemer, who provided the construction and historic rehab know-how on the project, was formerly the vice president of construction for CIM, which has several major residential projects underway Downtown. The three partners are already making plans for their next residential project.

"When you consider how many desks there are in Downtown, compared to how many beds, there's a huge disconnect," Hill said. "The cynics say you will reach saturation in Downtown housing with 4,000, 6,000, 8,000 units; the optimists, and I count myself one, say we are so far from saturation that until we get to the rough equivalent between the number of desks and the number of beds - which is in the thousands - saturation is not the problem.

"The more units that get built, the more services and amenities that will be available," he added. "I believe we are not reaching saturation, but we are just beginning to achieve critical mass."

page 7, 2/16/04