by Paul R. Spitzzeri
As 1929 dawned, the plan put forth by Clarence C. Bigelow of the Southwestern Investment Corporation to level Bunker Hill and surrounding areas in downtown Los Angeles, including the purchase and resubdivision of some 1,250 properties, the realignment of streets and the introduction of significant infrastructure, continued to garner major media attention.
Under a headline of “BUNKER HILL DEMOLITION PLANS ROUNDING OUT,” Charles C. Cohan of the 27 January edition of the Los Angeles Times provided “salient points” in the scheme, including, for the construction, reducing just north of 400 acres to the grade of the Second Street tunnel at a cost of $15.5 million between five and six years with excavated earth used as fills elsewhere; using finished areas while work continued; and keeping main streets open during the project. A pair of maps showed existing and anticipated grades and conditions.
As to the funding, the eastern underwriting, with no named sources, for a bond issue was emphasized, while the purchase of parcels with resale after grading either on an all-cash basis or that involving bonds, cash and stock, plus retirement of stock at double par value in addition to dividends. Moreover, it was broadcast that the regraded section’s value was to be about equal that of surrounding areas, currently at nine times the value. Lastly, it was noted that the project “will remove [a] tremendous traffic barrier, open [a] great area to [the] north and west and enhance values far beyond [the] actual area of work.”
Cohan began the article by asserting that,
When batteries of steam and electrically drive shovels are eating their way through Bunker Hill in downtown Los Angeles, to bring that topographical bulge to the level of the Second-street tunnel, they will be following an engineering plan dealing with one of the most outstanding municipal developments on record.
It was reported that “during the last few months, the physical phase of the Bigelow plan . . . has been rounding into form compatible with the financial set-up devised for the project,” while this was “based on simplicity and thorough convenience.” This entailed property owners having “an equitable means of participating” as well as receiving “logical compensation” as investors could expect “a substantial return . . . from the expected financial increment.”
Cohan continued that preferred stock at $50 per share as well as dividends could be used in lieu of cash to reacquire project area parcels owned by Southwestern for up to half of the total resale price, subject to director approval. No-par common stock was not to received dividends until all of the preferred stock was retired or called in for that purpose. The issuance of one share of preferred and three of common, as well as one of no-par, stock per sold unit was expected to “give that stock an increasing market value from its issuance date.”
No further detail was offered about the underwriting, other than that it would come from “eastern bankers” and that the funds from the bond issue would pay obligations against property, provide the cash for those owners electing to be paid by that medium, cover demolition, regrading and construction costs and handle carrying charges “for a period of years.”
With respect to street work, the tentative idea was to begin on the north to south thoroughfares with Figueroa and Hill, provide temporary traffic lanes while work was done on those, as well as Flower Street and Fremont Avenue, which latter now runs between 1st and Temple streets. Then, the east-to-west streets would be undertaken, starting on the south end of the project area at Fifth Street and moving north, up to Third after the first year, to First at the end of the second year and so on. It was added that Hope Street, Grand Avenue and Olive Street would be “necessarily unavailable for through traffic while regarding is under way.”
Concerning buildings, Cohan recorded, “there is to be nothing like a wholesale demolition of structures,” though “various of them will have to be torn down,” even as significant salvaging of materials was anticipated. Other edifices were to be moved, lowered or raised to the new grade, or remodeled with stories underneath, as required. In the meantime, utilities were to be provided to buildings until they were leveled.
In all, some 230 acres of the area were to be devoted for resale and over 160 were to be “dedicated as public streets and alleys,” with the former to be from 80 to 120 feet wide and the latter 30 feet. Also emphasized was the plan for “pedestrian ways through the center of the longer blocks approximating the arrangement of the Arcade Building,” also known as the Broadway-Spring Arcade Building.
Cohan concluded his article, of course, by pushing the plan’s projected property value increases, citing engineer Walter S. Cooper’s data that stated that Pershing Square, at the south end of the project location “had a valuation of something like one-half the entire Bunker Hill area, or about thirty-three times the average valuation there.” This led the journalist to end with “it is contended that such [a] large valuation gap is attributable to the grades existing on the hill, its impediment to traffic and its other unfavorable conditions, the elimination of which will enable developments that will be reflected in mounting valuations as the work progresses.”
The Los Angeles Express of the final day of February published a feature on the “BUNKER HILL PROJECT” and the “Bigelow Plan,” with emphasis on the “great traffic barrier” which the landform posed, as well as the $100 million property valuation increase which was anticipated by backers, much less what was expected to rise in adjacent sections. The account added that “it is believed probable that more than 95 per cent of the proposed area will come into the Bigelow Plan, by [owners] deeding their property to the proposed corporation.”
The paper further informed readers that “the project conforms with Civic Center plans as well as facilitating municipal progress in other directions.” Eli P. Clark, who was quoted in a Times article from the prior year, this mentioned in part two of this post, was cited verbatim here as well as former city engineer John H. Dockweiler and capitalist Walter P. Story. The numerous organizations listed as supporting the effort totaled 26 from Los Angeles and surrounding cities and communities.
Nine tangible benefits were listed in the piece. First was that the city was “bottle up by the obstruction in question,” especially to the north, northeast and northwest, while it was claimed that traffic flow to and from the east from Fifth Street northward was “also impeded and forced to eddy around the obstruction.” This meant that “the loss of time daily to many thousands of people is a serious economic waste.”
Next, it was remarked that “Bunker Hill is causing a decentralization of business” and “forcing the central business district to expand along extended longitudinal streets,” meaning north to south thoroughfares heading the latter direction, “instead of being centralized as it would be normally.” The effect was “a waste of time to shoppers, business men and professional men” because they were “forced to traverse a more extended area to transact their business,” so that “a loss of time to the public means a loss of money to merchants and business generally.”
Then, the Civic Center plan could “never achieve the purpose for which it was intended and [the] full value for the taxpayers’ money placed there will not be realized” so long as “the most unsightly and serious traffic barrier of any large city in the world” was permitted to exist and exert its pernicious influence.
Tied to this was the contention that “Bunker Hill constitutes one of the most unsightly obstructions that the heart of any great city contains.” Because “the beautification of the heart of Los Angeles is an important public consideration,” the argument went, the completion of the razing project meant that “the area in question will become a beautiful section of the central business district.
A new argument was, essentially, that Bunker Hill was a fire danger because of the challenge of navigating its grades, while the new alleys and pedestrian ways “should tend to reduce the fire hazard and be reflected in the insurance rates.” The sixth point was that land values would skyrocket, while another previously undisclosed argument was that “employment over a term of years will be given to a great many people,” including architects, builders and contractors and laborers, while “a great stimulus [would be] given to many branches of industry.”
A remarkable position was that,
The Bunker Hill Project should have a favorable psychological effect on business in general throughout the metropolitan area. An undertaking of such size, financed privately and without an assessment district, should have a tonic effect on public confidence.
Finally, the effort would reflect “modern ideas in city planning” with respect to those alleys, pedestrian ways, underground utility elements in those former, which avoided tearing up streets and “wide thoroughfares suitable for modern traffic conditions.” This meant that the project “would have application in the heart of a great municipality.”
What was also a further elaboration about the concept was the fact that “the nature of this plan involves the consent of a very large majority of the property owners themselves,” though it was insisted that “the fact that such a large proportion . . . are expected to agree on the proposal is in itself evidence the soundness and financial rightness of the ‘Bigelow Plan.'” Yet, it was added that “unless at least 85 per cent of the owners do come in, there will be no Bunker Hill Project under this particular plan.” Moreover, it was noted that “all agreements, deeds, moneys, etc., will be placed in escrow until the final success of the undertaking is absolutely assured.”
The financing structure was one that some might have considered “radical” in that the promise to stockholders of a return of “two for one on their cash investment,” as well as that stock at $50 per share, the doubling of the par value, could be utilized for repurchasing of property, subject to director approval. Because the redevelopment’s expected result was to be that of making Bunker Hill land “the very highest class of downtown business property,” it was commented that, “it is safe to say that never in the history of any major financing have two provisions so radically in favor of the investor been incorporated in any security offering.”
Bigelow was also paraphrased as suggesting that the unusual investment returns, “which may be limited to the property owners on Bunker Hill,” was because “this project is a strictly a cooperative undertaking.” Those involved were anticipated to be “the owners of Bunker Hill properties” and the claim was that,
It is their property, their undertaking, and is possible only with their consent and cooperation. To them, therefore, should go the major share of whatever profit will accrue from the development of their properties.
Accordingly, the whole financial set-up has been designed with a view to making the deal so attractive to the property owners, so fair, plain and aboveboard that they cannot help but see that it is greatly to their advantage to accept the “Bigelow Plan” as an enormous profit is practically certain to accrue to them.
The article closed with the observation that “many business enterprises today are merging their interests for economic reasons” and the plan was “purely a merger or consolidation of interests to accomplish the same result,” something that no individual could achieve on their own.
In its “People’s Forum,” the Express of 9 March included a letter from a reader, identified only as “F.W.K.,” in which the plan attracted their attention because “twenty-five years ago a body of engineers appraised the cost of removal of the hill at $20,000,000″ and that was considered prohibitive.” This reticence was considered by the writer to be a mistake as much of the excavated material, for example, could have been used as fill from Silver Lake’s reservoir to areas to the south.
A decade prior, continued “F.W.K.,” a conversation was had with Frederick W. Blanchard, music store owner and patron of the arts who also headed the city’s art commission, with his comment that the filling of a large ravine at Silver Lake could have used two Bunker Hill amounts of dirt for a proposed art center “with the buildings like the Parthenon at Athens.” Regardless of this interesting aside, the letter ended with a notable suggestion and a remarkable reference:
Were the Bunker Hill real estate assessed as it should be, the owners thereof would soon do something. Tax the hill and it will come down. We need a Mussolini type of man, vested with power to manage cutting that hill out of the way.
Four days later, the Los Angeles Record published a letter asking “are the authorities seriously considering the Bigelow plan of razing the [Bunker] hill?” with the response from J.R. Prince of the city engineer’s office division of street openings tersely replying “the Bigelow plan is not before [the City] council officially at this time.” One wonders what those in city government thought of the scheme.
What we do know is that there were at least some published concerns in the Record, which was the most liberal of the Angel City’s papers, with C.F. Hunt writing the editor for its edition of 30 April with a charge that, for project backers, “argument [in favor of the project] must have failed, since advocates of razing Bunker Hill have resorted to scurrilitiy [sic].”
Hunt cited an unnamed supporter as acidly remarking that “anyone who opposes us is either an ass or has ulterior motives” and “they go up and down dark alleys spreading propaganda.” Criticized was the claim that razed property on the hill was comparable to areas of downtown “built up solidly with tall buildings.”
He remarked that the concept would place all property titles in escrow “at present low values” and then borrow do conduct the work, but “the owners would come out of the deal with nothing, while the profits would be taken by promoters, wreckers, contractors, etc., and the owners of surrounding properties.” Hunt concluded,
If the thing is so sure, invent a square deal; have the whole city, which is to be benefited, assessed, and the land bought. The owners will sell at fair prices. Why confiscate their property?
In the Record‘s “Cutting It Short” column of brevities in its number of 1 May, the paper informed readers that the “Bunker Hill battle still goes on” as “property owners who opposed razing of [the] hill under [the] Bigelow plan ousted those in favor at [a] meeting last night.” From this point, moreover, nothing of significance was found in the press about the scheme for the rest of the year.
Then, in late October, came the crash of the stock market in New York City that led to the early stages of the Great Depression, though the Bunker Hill plan continued to be discussed and debated as the Roaring Twenties meekly came to a close. We will return to take this story into 1930 for part four, so check back with us then.
As noted in this post, the private financing behind the Bunker Hill plan was not disclosed and was only referred to as “Eastern banks.” I believe there were legitimate reasons for this, both from the perspective of the private sector as well as the public authorities.
Urban renewal projects, at any time and in any place, are highly sensitive, given the substantial financial interests possibly created; therefore, they often evolve into political wrestling under the table. At the same time, such projects often carry significant negative impacts, including large-scale displacement, the use of eminent domain, and extensive parcel reconfiguration.
Under these circumstances, limiting early disclosure of the actual investors may have been a practical way to avoid speculation, behind-the-scenes maneuvering, and public opposition during the initial stages. Moreover, the legal frameworks governing financial transparency and anti–money laundering were far less developed at the time than they are today, making such limited disclosure more acceptable in that era.
As highlighted in this post, a noteworthy point was raised by Charles Cohen in his 1929 article concerning the projected land value of Pershing Square. He estimated that, after the grading of Bunker Hill, this parcel located at the southernmost point of the redevelopment area could become extraordinarily valuable – up to 33 times the average acreage price accounting for nearly half of the district’s total land value.
It is unclear whether serious debate did take place, but the decision to preserve it as a public park rather than yield to financial gain is admirable. Such trade-offs are common in urban planning, where economic incentives often compete with long-term civic value.
In hindsight, retaining Pershing Square has proven to be a wise decision, as it continues to provide, generation after generation, an open space enhancing the value and livability of the surrounding downtown area, much like Central Park in Manhattan, albeit on a much smaller scale.