LA Mayor Bass proposes allocating $360 million from Measure ULA funds for affordable housing, while the "mansion tax" is revealed to primarily hit commercial deals. The Oceanwide Plaza's $470 million offer faces bankruptcy court pushback, with Cityview emerging as a backup bidder. KB Home is relocating its headquarters from LA to Arizona, highlighting corporate exodus trends.
SUBJECT LINE: ULA Tax Shifts to Affordable Housing; Oceanwide Plaza Saga Continues PREVIEW TEXT: $360M in ULA funds earmarked for affordable housing; Oceanwide Plaza deal faces pushback.
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# LA Development Insider ### Sunday, April 12, 2026 | LA Development Intelligence
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## PERMITS & MAJOR FILINGS Los Angeles affordable housing developers are poised to receive a significant boost, with Mayor Karen Bass and City Councilmember Ysabel Jurado proposing to allocate over $360 million from Measure ULA tax revenues. These funds are earmarked for building and preserving affordable housing across the city, providing a much-needed capital injection for projects struggling with financing. The initiative aims to leverage the controversial "mansion tax" to address LA's deepening housing crisis.
This proposed allocation follows the recent revelation that Measure ULA, initially sold as a "mansion tax," has predominantly impacted commercial real estate. Over the past three years, the tax has generated $1.1 billion from nearly 1,600 deals, with 56% of that revenue stemming from commercial transactions, including office buildings and apartment complexes. This data underscores the broader financial burden the tax has placed on the commercial sector, shifting its initial perception.
Meanwhile, Long Beach is witnessing a significant transformation as Onni Group begins demolition at the Marina Shores shopping center, located at 6500 Pacific Coast Highway. The Vancouver-based developer acquired the 6-acre site for $68 million five years ago. This teardown paves the way for a major redevelopment, signaling Onni's intent to reshape a key waterfront parcel in the city. The project's scope and future plans are highly anticipated by local stakeholders.
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## ENTITLEMENT WATCH The Oceanwide Plaza saga continues to unfold with Sean Burton's Cityview emerging as a potential backup buyer for the graffiti-covered downtown Los Angeles eyesore. The latest $470 million offer for the property is reportedly facing pushback in bankruptcy court, creating an opening for Cityview's all-cash offer, which The Real Deal previously reported. This development adds another layer of complexity to the distressed asset's future, as stakeholders weigh the best path forward for the long-stalled project at 1101 S. Figueroa Street.
In a unique play, a former Los Angeles mansion is testing the market's appetite for unconventional office space. While specific details regarding the applicant, address, or variance type were not immediately available, this move highlights a growing trend of adaptive reuse and creative solutions to address evolving workplace demands. Developers and investors are closely watching to see if this residential-to-office conversion gains traction, potentially opening new avenues for property utilization in a competitive market.
An appliance outlet has acquired a retail building in the Los Angeles area, though specific details on the applicant, address, or price were not provided. This transaction indicates continued activity in the retail sector, particularly for essential goods and services. The acquisition suggests confidence in brick-and-mortar retail for specialized outlets, even as the broader retail landscape undergoes significant shifts. Further details on the location and the outlet's expansion plans are expected.
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## LAND DEALS & ACQUISITIONS Goodman Group and DataBank Holdings have formed a joint venture to develop LAX2, a new data center in Vernon, just south of downtown Los Angeles. Construction is already in full swing for the 140,000-square-foot facility, located at an undisclosed address in the Vernon industrial corridor. This partnership underscores the surging demand for data infrastructure in the region, driven by cloud computing and digital services.
The project represents a significant investment in critical digital infrastructure, with Goodman and DataBank aiming to capitalize on LA's strategic position as a major connectivity hub. The facility will provide essential services for businesses requiring high-speed data processing and storage, further solidifying Vernon's role as a key industrial and technological center.
KB Home, a prominent homebuilder, is relocating its corporate headquarters from Los Angeles to Tempe, Arizona, by spring 2027. This move marks another significant corporate exit from California to the Phoenix metro area, following a trend of companies seeking more favorable business environments. The decision by KB Home, a long-standing LA-based entity, reflects broader economic pressures and operational considerations influencing corporate strategy.
This relocation highlights the ongoing challenges faced by businesses in California, including high operating costs and regulatory burdens. The Phoenix market continues to attract companies with its competitive real estate, talent pool, and business-friendly policies, creating a notable shift in corporate presence across the Southwest.
Open-air malls are leading retail megadeals in Los Angeles, signaling a strong comeback for this asset class. While specific transactions and addresses were not detailed, the trend indicates renewed investor confidence in experiential retail and community-centric shopping destinations. This resurgence is partly attributed to a "1999" moment, with younger demographics driving foot traffic and sales at these properties.
The performance of open-air malls contrasts with some of the challenges faced by enclosed malls, demonstrating a preference for outdoor, walkable retail environments. This trend suggests developers and investors should continue to focus on creating vibrant, mixed-use retail spaces that offer more than just shopping.
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## MARKET INTELLIGENCE KB Home, a long-standing Los Angeles-based homebuilder, announced its corporate headquarters will relocate to Tempe, Arizona, by spring 2027. This move is part of a broader "California exodus" trend, with the Phoenix metro market increasingly attracting companies. The decision reflects a strategic shift to optimize operational costs and leverage growth opportunities outside of California.
This relocation follows a pattern of businesses seeking more favorable economic climates, impacting California's corporate tax base and employment figures. Analysts will be watching to see if other major LA-based companies follow suit, potentially accelerating the decentralization of corporate headquarters from the region.
Executive compensation at Rexford Industrial Realty saw significant figures, with a $26 million payout for a pair of executives, while Kilroy Realty's CEO earned $7 million. These figures, revealed during proxy season, highlight the substantial financial incentives for top leadership in the industrial and office REIT sectors. The Rexford compensation package is particularly notable given the company's recent performance and strategic shifts.
These compensation details provide insight into the financial health and governance of major real estate players, offering a glimpse into how success is rewarded at the executive level. Investors often scrutinize these figures as part of their assessment of a company's overall value and management effectiveness.
Pricing residential properties in Altadena, particularly in wildfire-ravaged areas, has become "a dance," according to market observers. While agents may tout "plentiful market opportunities," the reality is a nuanced landscape where buyers and sellers navigate unique challenges related to insurance, rebuilding costs, and perceived risk. This creates a volatile market with significant disparities in property values.
The Altadena market exemplifies the complexities of valuing real estate in areas prone to natural disasters, where a healthy dose of skepticism is warranted. Developers and investors considering projects in such regions must account for these variables, including the long-term impact on property values and buyer sentiment.
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## QUICK HITS - Measure ULA, the "mansion tax," has generated 56% of its $1.1 billion revenue from commercial real estate transactions (The Real Deal LA). - Onni Group has begun demolition at the 6-acre Marina Shores shopping center at 6500 Pacific Coast Highway in Long Beach, purchased for $68 million (The Real Deal LA). - A Beverly Park manse at 77 Beverly Park Lane, once rented by Prince, is now listed for $68 million (The Real Deal LA). - Open-air malls in Los Angeles are leading retail megadeals, driven by increased foot traffic and investor confidence (Bisnow LA). - Goodman Group and DataBank Holdings are partnering on LAX2, a 140,000-square-foot data center in Vernon, south of downtown Los Angeles (The Real Deal LA). - Sean Burton's Cityview is emerging as a backup bidder for the $470 million Oceanwide Plaza project, which faces bankruptcy court pushback (The Real Deal LA). - Trophy buildings in Beverly Hills and Century City drove rent growth in LA's office market during Q1 2026 (Bisnow LA). - A massive fire, suspected arson, destroyed a 1.2 million SF warehouse filled with toilet paper in Ontario, Inland Empire (Bisnow LA).
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## WHY THIS MATTERS Today's stories paint a picture of a dynamic, albeit challenging, LA real estate market. The proposed allocation of ULA funds to affordable housing signals a shift in how the city intends to leverage controversial taxes, creating new opportunities for mission-driven developers. Simultaneously, the Oceanwide Plaza saga highlights the ongoing risks and complexities of large-scale distressed assets, while corporate exits like KB Home's underscore the persistent pressures on businesses in California. Developers and investors should closely monitor these policy shifts and market movements to identify emerging niches and mitigate potential risks in the evolving landscape.
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*Intelligence sourced from 4 LA real estate feeds. Published daily by ABR Media Group | ladevinsider.com*
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SUMMARY: LA Mayor Bass proposes allocating $360 million from Measure ULA funds for affordable housing, while the "mansion tax" is revealed to primarily hit commercial deals. The Oceanwide Plaza's $470 million offer faces bankruptcy court pushback, with Cityview emerging as a backup bidder. KB Home is relocating its headquarters from LA to Arizona, highlighting corporate exodus trends.
