Why the Broadway Trade Center Isn’t Turning into a ‘Tech Hub’ After All

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

5th street NYC/Broadway Trade Center

Six months after announcing bold plans to renovate the derelict Broadway Trade Center building, it appears metaverse startup Emcee won’t turn the aging 1.1 million square-foot property into a “tech hub” any time soon.


The building is now headed towards foreclosure after the owner defaulted on a $221 million loan to retrofit it. This means we likely won’t see the “Emcee Studio,” a proposed multi-use space including a hotel, members-only rooftop pool, restaurant and coworking offices in the near future. The space will be boarded up and sold at a bankruptcy auction.

Emcee founder and CEO John Aghayan didn’t respond to dot.LA’s requests for comment.

“The owner was listening to ideas like [a] metaverse gaming hub but we all knew there [was] zero chance they were going to raise enough money to make the building habitable let alone be profitable,” said one local real estate manager familiar with the deal who wished to remain anonymous for fear of damaging their business. “Nobody in their right mind would invest in that building in DTLA,” the source added.

A brief history of the hulking, scaffolded building you’ve likely seen many times while traversing Downtown Los Angeles: The Beaux-Arts style property at 8th and Broadway was built in 1906 as Hamburger’s Department Store, and later became the May Co. headquarters after it changed ownership in 1925. The May family vacated their department store in the mid-1980s, and since then it’s become known as the Broadway Trade Center, existing in a state of limbo and increasing disrepair after being gutted two years ago. In 2014, New York-based real estate investment trust Waterbridge Capital bought the building for an estimated $130 million.

Waterbridge Capital is run by Joel Schreiber, one of the first investors in WeWork. He’s running the building under a joint venture LLC called Broadbridge. In 2016 he secured a nearly $165 million loan on the property, and another loan worth $213 million in 2018. Still, after all these refinanced loans, no one was able to move in.

Waterbridge Capital is also reportedly in talks to buy the Union Bank Plaza office building Downtown for $155 million. The company didn’t immediately reply to a request for comment.

A longtime L.A. broker who’s been following developments on Broadway for decades and requested anonymity to avoid business conflicts speculated the Emcee announcement some months back could have been an ill-fated tactic to stave off the inevitable foreclosure when refinancing the loans was no longer an option.

“I hate to say it, but it sounded like some kind of cockamamie sham put together to find more time with the lender,” the source said. They added that the foreclosure process could take up to 18 months, during which time the building will fall into even more disrepair and added they believed it’s not even worth half of the total loan amount.

Now the question is, what to do with this behemoth of an empty building?

The same sources told me the city government could buy it back for pennies on the dollar now, but then it’d be on the hook for making it habitable – both brokers told dot.LA the elevators aren’t even up to code, much less anything else. Also, it's got no parking lot, and parking’s a critical need for any large-use building Downtown, those sources said.

“Housing is our critical need right now,” the broker said. “But it’s just too big of a challenge. There’s no government agencies to do it [and] it’s a monster floor plan.”

Subscribe to our newsletter to catch every headline.

Cadence

Pasadena's Numerade Believes Tutoring Is The Solution To Online Schooling Setbacks

Decerry Donato

Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

kid looking at computer screen for online school
Andria Moore

Nationally, kids whose schools met online in the 2020-2021 year performed 13% lower in math and 8% lower in reading compared with kids who had in-person schooling.

Nhon Ma, co-founder of online tutoring platform Numerade believes that this issue will continue to persist unless more students gain access to tutoring outside the classroom.

Read moreShow less

Kroma Wellness Founder Lisa Odenweller on Breaking Into the Nutrition Industry

Yasmin Nouri

Yasmin is the host of the "Behind Her Empire" podcast, focused on highlighting self-made women leaders and entrepreneurs and how they tackle their career, money, family and life.

Each episode covers their unique hero's journey and what it really takes to build an empire with key lessons learned along the way. The goal of the series is to empower you to see what's possible & inspire you to create financial freedom in your own life.

Kroma Wellness Founder Lisa Odenweller
Image courtesy of Kroma Wellness

On this episode of Behind Her Empire, Lisa Odenweller opens up about her superfood nutrition company, Kroma Wellness, and the difficulties of breaking into the wellness industry.

Odenweller began her career in the wellness space in 2011 when she opened a chain of superfood cafes around Southern California called Beaming Wellness.

Read moreShow less
RELATEDEDITOR'S PICKS
LA TECH JOBS
interchangeLA
Trending