by Paul R. Spitzzeri
As noted in a post here in January 2017, building activity in downtown Los Angeles, during this latest real estate and development boom in the region, has been the heaviest since the 1920s, particularly the first half of that decade. That post noted that Walter P. Temple was an investor in two commercial buildings, the Great Republic Life and National City Bank structures located between Main and Spring and near 8th and 9th streets, that were financed with bonds offered by the prominent investment bond firm of S. W. Straus and Company.
Today’s post highlights a pair of artifacts from the Homestead’s collection, comprising a prospectus and flyer from another Straus bond offering for the Edwards & Wildey Building and Annex, located at the southwest corner of Grand Avenue and Sixth Street in downtown Los Angeles.
The main structure and two-story annex on Sixth were developed by a busy real estate development and construction firm, Edwards & Wildey Company, which was launched in 1904 as Edwards & Winters before Harry Winters left the firm and Otto Wildey joined Godfrey Edwards as a namesake partner three years later during another of the long series of booms that have characterized the region’s development.
Edwards was born in Esher, England, southwest of London, in 1873 and emigrated to the United States with his family when he was eleven years old. He became an American citizen in 1895 and was an upholstery company salesman there and in San Francisco, but was said to be trained as a civil and structural engineer, though not with formal education.
In 1904, he married Olive Hickson and the couple adopted five children, a point made obvious on the enumeration sheet for the 1920 census when the couple resided in Eagle Rock (they shortly after moved to a large mansion near Millionaires Row in Pasadena.) At the peak of his career in real estate and construction and not long after his namesake building was finished, Edwards died in January 1928 of double pneumonia at age 54.
Wildey was born in Centralia, Washington, southwest of Seattle in 1880 to a British father who was a farmer and a British-Canadian mother, and came to greater Los Angeles in 1895, graduating from Whittier College. He worked as a bookkeeper for the same Los Angeles branch of the San Francisco upholstery supply company that employed Edwards before becoming secretary and treasurer of Edwards & Winter and then principal of Edwards & Wildey.
In 1902, he married widower Nella Deardon Modie and the couple was married for about twenty years before separating, then divorcing. After Edwards’ death, Wildey, who was a fine musician and supporter of the arts, kept the firm going for a brief time and then formed his own real estate company, which was active in the development of North Hollywood. He died at his ranch in Covina in 1942 at age 62.
Among the best-known projects carried out by the firm (which, for a time, included partner, L.E. Dixon) were the Los Angeles Coliseum, Shrine Auditorium, the Title Insurance and Trust Company Building, and the Fine Arts Building, this last being a preeminent design of the prominent architectural firm of Walker and Eisen and known for its phenomenal details including large reclining statues (representations of sculpture and architecture) on the exterior of the third floor. The company also was very active in suburban home building, with major projects in Eagle Rock, Hollywood, Granada Hills, Glendale and Burbank, among others.
The Edwards & Wildey building, which opened on 1 June 1925, was also a product of Walker and Eisen, which also designed the Great Republic Life and National City Bank buildings as well as other structures built by Walter P. Temple in El Monte, San Gabriel and Alhambra. It shares many of the visual elements found in many of their commercial designs, including an abundant use of terra cotta, arched windows and openings, intricate cornices, and other details.
The two artifacts shown here include the Straus and Company flyer dominated by a photo of the Edwards & Wildney Building, with a note that the annex was to be built soon where an older two-story structure stood. At the top is a statement that “The Straus hallmark on a Real Estate Bond Stamps it at once as The Premier Real Estate Security,” while at the boom was their motto (which changed every year, naturally) of “Forty-Three Years Without Loss To Any Investor.”
The firm’s principal was Simon W. Straus, who was born in Ligonier, Indiana, near the Michigan border, in 1866. His father, Frederick, was born in Prussia in a family of bankers and came to America in 1852. He was a banker in Ligonier when Simon was born, but went on to form the predecessor firm to S.W. Straus and Company with his son joining the company at age 18. When Frederick retired, Simon took over management and changed the name of the business. In 1915, Simon moved to New York and was president of the firm until 1928, the year he formed Straus National Bank and Trust Company. He died in his hotel residence in New York in September 1930 as the Great Depression was worsening.
What was also getting more problematic was the actual condition, rather than the public face, of the company. While Simon Straus was lauded as a prudent businessman and financier, details emerged after his death that revealed something far less seemly. The Securities Exchange Commission opened inquiries into his practices with “bondholder protective committees” that shielded such entities during reorganizations of bond issues. The very powerful New York figure, Robert Moses, became a receiver after a court order of receivership of the firm was mandated in 1932 and soon resigned, calling the business a “shell” and insisting that he could do nothing to protect holders of Straus-issued bonds.
The prospectus laid out in great detail the terms and conditions of the $1,050,000 bond issue, comprising first mortgage leasehold 6 1/4% serial coupon bonds in denominations of $100, $500 and $1,000, with maturity dates ranging from a year-and-a-half to 15 and 1/2 years from the issue date of 15 October 1925. Yields were projected to be from 6.1 to 6.35% based on maturity dates. Interest was payable in mid-April and mid-October and subject to a 2% federal income tax. The bonds were about 60% of a “very conservative appraisal” valuation of the leaseholds for the land and buildings at just over $1.75 million.
The borrower was the Edwards & Wildey Building, Inc. (today it would be a limited liability corporation, or LLC), composed of the Edwards, Wildey and Dixon of the realty and construction firm. The document stated that the trio “are well and favorably known in Southern California . . . [and] enjoy the highest credit standing and are known to have extensive resources.” Straus bought the bonds issued by local firms, such as M. H. Lewis, “after a most careful investigation” and offered them “with our unqualified recommendation as a sound and amply secured investment.”
Projected earnings from leases of commercial and office units were expected to be 250% of annual interest charges and it was expected that surplus earnings would total a little over $70,000 per year, with projected earnings netting $167,000 and interest and other charges expected to be a bit above $96,000 per year. An amortization table gave projected figures for the bonds through April 1941, the last maturity date. It was observed that three-quarters of the spaces were rented before the structure was finished and that rate was 90% as of 1 October.
The building was touted as “one of the finest structures of its kind in California and represents the highest type of office building design and construction.” Details on the structure noted that it had 109 feet frontage on Grand and 95 on Sixth, with a 40’x109′ lot for the annex, while the main structure lease started in March 1920 and expired on 30 June 2019 and the annex from October 1925 to the same expiration date. Nearby structures such as the Pacific Mutual Building, Pacific Finance Building, The Jonathan Club (still under construction), and the recently completed city library were highlighted as complements to the Edwards & Wildey Building.
With 10 stores and 216 offices, the main structure “is of dignified and impressive appearance, of Romanesque design with street facades of light gray glazed architectural terra cotta.” Marble was used abundantly in the lobby and corridors, while hardwood trim was also extensive. Interestingly, the annex “foundations and structure . . . are designed to carry a height-limit building of 13 stories comparable to the existing building.” While the annex was built, it remains two stories ninety years later.
In October 1929 came the crash of the stock market in New York and the onset of the Great Depression. The Edwards & Wildey Building was sold, Straus and Company collapsed, and a new bond issue for the structure was executed in 1936. Not surprisingly, the building has been converted into lofts, known as the Milano, as downtown Los Angeles’ resurgence has not just led to a flurry of new construction, but the widespread conversion of older structures like the Edwards & Wildey Building.