Mayor Bass proposes $360 million from Measure ULA for affordable housing, even as the tax disproportionately hits commercial deals. Meanwhile, KB Home announced its corporate headquarters will relocate from Los Angeles to Tempe, Arizona, citing California's business environment. The Oceanwide Plaza saga continues with Cityview as a backup bidder for the $470 million project.
--- SUBJECT LINE: ULA Tax Haul Targets $360M for Affordable Housing PREVIEW TEXT: Bass and Jurado propose $360M for affordable housing; ULA revenue hits commercial sector hardest.
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# LA Development Insider ### Sunday, April 12, 2026 | LA Development Intelligence
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## PERMITS & MAJOR FILINGS L.A. affordable housing developers could see a significant boost from Measure ULA, with Mayor Karen Bass and City Councilmember Ysabel Jurado proposing to allocate over $360 million from the tax haul. This capital infusion, aimed at building and preserving affordable housing, signals a renewed municipal focus on addressing the city's housing crisis. Developers and non-profits are expected to vie for these funds, which could jumpstart numerous projects across the city.
The proposed allocation comes as new data reveals the true impact of Measure ULA, the so-called "mansion tax." Three years post-implementation, the tax has generated $1.1 billion across nearly 1,600 deals, with a staggering 56% of that revenue originating from commercial real estate transactions. Initially marketed to voters as a levy on luxury residential sales, the bulk of the financial burden has fallen on office buildings, industrial facilities, and other commercial properties, significantly impacting developers' acquisition and disposition strategies.
In Long Beach, Onni Group is moving forward with the transformation of the Marina Shores shopping center at 6500 Pacific Coast Highway. Five years after acquiring the 6-acre site for $68 million, demolition has commenced, clearing the way for a mixed-use redevelopment. While specific permit numbers for the full project are pending, this initial teardown marks a pivotal step in Onni's plan to replace the aging retail complex with a modern residential and commercial hub, signaling a significant shift in the Long Beach coastal landscape.
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## ENTITLEMENT WATCH The protracted saga of Oceanwide Plaza continues to unfold, with Sean Burton’s Cityview emerging as a backup bidder for the graffiti-covered downtown eyesore. A $470 million offer for the unfinished mixed-use project at 1101 S. Flower Street is currently facing pushback in bankruptcy court, complicating the path forward. Cityview's all-cash offer, previously reported, adds another layer of intrigue to the complex bankruptcy proceedings, as stakeholders grapple with the future of the stalled development.
The potential sale of Oceanwide Plaza remains fraught with challenges, including significant construction defects and the high cost of completion. While a specific planning date for a new entitlement review is not yet set, any successful acquisition will likely necessitate extensive engagement with city planners and community groups to address the property's blighted status and integrate it into the downtown fabric. The community reaction remains largely one of frustration over the prolonged inactivity and visual impact of the unfinished towers.
Lincoln Property Company (LPC) is bolstering its Southern California industrial team, hiring Sean Perrier as a Vice President focusing on industrial acquisitions. Perrier will target strategic opportunities across the region, reflecting LPC's bullish outlook on the industrial sector despite broader market fluctuations. This move signals continued investor appetite for logistics and distribution assets, with LPC aiming to expand its footprint in a highly competitive market.
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## LAND DEALS & ACQUISITIONS An undisclosed appliance outlet has acquired a retail building in the Los Angeles area, signaling continued activity in the local commercial real estate market. The specific address and price of the transaction were not immediately disclosed, but the deal highlights the ongoing demand for well-located retail spaces, particularly for essential goods and services providers. This acquisition reflects a strategic move by the buyer to expand its physical presence and capitalize on consumer spending trends.
KB Home, one of the nation's largest homebuilders, is joining the growing list of companies departing California, announcing it will relocate its corporate headquarters from Los Angeles to Tempe, Arizona, by spring 2027. The move marks a significant shift for the company, which has been based in Southern California for decades. While no specific address or price for the LA headquarters sale was provided, this decision underscores the increasing challenges and costs of operating a large corporation within the state.
The departure of KB Home from Los Angeles to the Phoenix metro market is part of a broader trend of corporate exits from California. The company cited a "business-averse environment" as a key factor in its decision, echoing sentiments from other firms that have recently left the state. This relocation will impact the commercial real estate landscape in Los Angeles, freeing up significant office space and potentially influencing other businesses considering similar moves.
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## MARKET INTELLIGENCE Atar Capital, a private investment firm, is expanding its footprint in Century City, relocating its headquarters to what is reportedly the most expensive office building in Southern California. While the specific address was not provided, this move highlights the continued allure of trophy assets in prime submarkets, even amidst a challenging office market. The firm's expansion signals confidence in the long-term value of high-quality, well-located office space, bucking the trend of downsizing seen in other sectors.
This relocation by Atar Capital underscores the bifurcation of the office market, where Class A+ properties in desirable locations like Century City and Beverly Hills continue to command premium rents and attract tenants. Data from Q1 2026 shows these submarkets leading rent growth in Los Angeles, with asking rents in these areas significantly outperforming the broader market. This trend suggests a flight to quality, with companies prioritizing top-tier amenities and prestigious addresses for their headquarters, even as overall office vacancy rates remain elevated.
Goodman Group and DataBank Holdings have formed a joint venture to launch LAX2, a new data center in Vernon, just south of downtown Los Angeles. Construction is currently underway on the 140,000-square-foot facility, which will cater to the surging demand for digital infrastructure in the region. This partnership represents a significant investment in the burgeoning data center market, with the project expected to provide critical capacity for cloud services and enterprise clients in the greater Los Angeles area.
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## QUICK HITS - Onni Group has begun demolition at the 6-acre Marina Shores shopping center at 6500 Pacific Coast Highway in Long Beach, acquired for $68 million. (The Real Deal LA) - A Beverly Park mansion at 77 Beverly Park Lane, once rented by Prince, is now on the market for $68 million. (The Real Deal LA) - Open-air malls are leading retail megadeals in Los Angeles, driving a comeback for the sector in Q1 2026. (Bisnow LA) - Goodman and DataBank have partnered on LAX2, a 140,000-square-foot data center in Vernon, just south of downtown Los Angeles. (The Real Deal LA) - Sean Burton’s Cityview has emerged as a backup bidder for the $470 million Oceanwide Plaza project at 1101 S. Flower Street. (The Real Deal LA) - Hypersonic drone maker Hermeus has moved its headquarters from Atlanta to El Segundo after closing a $350 million Series C funding round. (The Real Deal LA) - Trophy buildings in Beverly Hills and Century City are leading office leasing and rent growth in LA for Q1 2026. (Bisnow LA) - A suspected arson fire destroyed a 1.2 million square foot warehouse filled with toilet paper in Ontario, Inland Empire. (Bisnow LA)
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## WHY THIS MATTERS Today's headlines paint a complex picture of the LA real estate market, marked by both targeted municipal intervention and significant corporate shifts. The proposed $360 million ULA allocation for affordable housing, coupled with the revelation that commercial properties bear the brunt of the "mansion tax," underscores the evolving financial landscape for developers. Meanwhile, KB Home's exit to Arizona signals continued challenges for businesses operating in California, while the Oceanwide Plaza saga and new industrial/data center investments highlight the diverse opportunities and risks in the entitlement and development pipeline. Developers and investors should closely monitor these policy changes and corporate movements, recalibrating strategies to navigate both the incentives for affordable housing and the increasing operational costs impacting major players.
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*Intelligence sourced from 5 LA real estate feeds. Published daily by ABR Media Group | ladevinsider.com*
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SUMMARY: Mayor Bass proposes $360 million from Measure ULA for affordable housing, even as the tax disproportionately hits commercial deals. Meanwhile, KB Home announced its corporate headquarters will relocate from Los Angeles to Tempe, Arizona, citing California's business environment. The Oceanwide Plaza saga continues with Cityview as a backup bidder for the $470 million project.
