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Korean Air and Thomas Properties Group Reach Major Labor Agreements for the Planned One Billion Dollar, Mixed-Use Wilshire Gran

^{Published on 2010-12-15 09:35:42 - Market Wire}
 

LOS ANGELES--([ BUSINESS WIRE ])--Korean Air and Thomas Properties Group, Inc. (NASDAQ:TPGI) announced today that they have reached agreements with key hotel and building trades unions for the Wilshire Grand redevelopment in downtown Los Angeles. The announcement is a significant milestone in the planned redevelopment of the 3.2-acre site, a full city block in the heart of downtown Los Angeles.

"We are excited about this project and look forward to starting construction once all approvals are granted."

Councilmember Jan Perry, First Deputy Mayor Austin Beutner and labor leaders Maria Elena Durazo, Executive Secretary-Treasurer, Los Angeles County Federation of Labor, AFL-CIO, Tom Walsh, President UNITE-HERE Local 11, and Richard Slawson, Executive Secretary, Los Angeles-Orange Counties Building and Construction Trades Council, joined developer James A. Thomas, CEO of Thomas Properties, in announcing the agreements.

A precedent setting $10 million closure agreement between the hotel and UNITE-HERE/Local 11 provides the 480 existing hotel workers with severance pay and healthcare benefits and gives them recall rights when the new hotel opens, assuring them of the opportunity to reclaim their previous jobs. The current schedule calls for the hotel to close in December 2011. Demolition will require one year, so construction on the new hotel will begin in December 2012 with expected completion in 2015.

aThis closure agreement is the first of its magnitude in the citya™s recent history,a according to Councilmember Perry. aWith these agreements, Thomas Properties and Korean Air are demonstrating how important it is to them to invest in the people who will build and operate this new landmark.a

aThis is great news for the holidays for all Wilshire Grand staff,a notes Walsh. aThey now can be confident that, when the hotel is shut down, they will be treated with fairness and equity. Moreover, there will be significantly more full-time employment and opportunity with the new hotel,a adds Walsh.

Thomas also announced that the project has pledged to sign a Project Labor Agreement with the Los Angeles-Orange Counties Building and Construction Trades Council. This agreement ensures that the highest trained and highest quality labor force will be used to construct this landmark project. Local hiring, apprenticeship and hospitality training programs are components of the Project Labor Agreement in conjunction with a community benefits program being offered by the developers. As a result, a percentage of the workforce building this two and one-half million-square-foot project on the southwest corner of Wilshire Boulevard and Figueroa Street will be from the local region.

aThe exceptional partnership between Los Angeles labor, Korean Air, and Thomas Properties Group is what made this agreement possible,a Durazo said.aWe are proud of the fact that the Los Angeles labor movement is an active partner in moving development projects and putting people back to work in good jobs. The Wilshire Grand redevelopment project also provides a blueprint for how organized labor and responsible businesses can work together to rebuild our economy.a

The Korean Air a" Thomas Properties Group proposal is to replace the existing 58-year-old complex with two high-rise towers totaling approximately 2.5 million square feet: a 45-story tower housing a luxury hotel of 560 rooms topped by several floors with 100 residential units; and a 1.5 million-square-foot, 65-story office tower; and 275,000 square feet of public spaces including a spa, meeting space, retail shops and other amenities. A major plaza will connect the two buildings and will provide pedestrian walkability throughout the block. The new Wilshire Grand is being designed by A.C. Martin Partners, a leading Los Angeles architectural firm.

The project has been moving through the public process since its announcement in April 2009. It will be reviewed by the Los Angeles Planning Commission on December 16. It will move on to the Los Angeles City Council early next year and, if approved by that body, will start demolition in December 2011.

Korean Air acquired the current Wilshire Grand Hotel in 1989 when it was operated as Hilton Hotel & Towers. The airline also owns three hotels in Korea and another in Hawaii.

Wilshire Grand will be a model for sustainability and transit-oriented development. It is located adjacent to the 7^th Street/Metro Center station where the Blue, Red and Purple Lines converge and will be built to LEED Silver Certification standards.

aIt has been a tough couple of years for the building trades but this project will offer thousands of good jobs for three or more years,a points out Slawson. aWe are giving our enthusiastic support to the project and encourage the city to move it forward as quickly as possible so we can begin to realize its benefits.a

The Wilshire Grand redevelopment will create approximately 7,200 construction jobs and an estimated 5,000 construction-related indirect jobs.

Thomas Properties Group purchased the nearby 2.7 million-square-foot City National Plaza in 2003 and completed a thorough restoration and repositioning of the iconic property which received LEED Gold Certification in 2010. The firm is a leader in the management and development of sustainable and high-performance buildings.

aOur company has a longtime commitment to ensuring high quality workmanship in construction and in permanent building operations. Working hand-in-hand with the unions and with an enlightened owner such as Korean Air, we are pleased to continue making downtown a compelling destination,a noted Thomas. aThis is an unequalled opportunity to create a landmark for Los Angeles that will attract residents, visitors and new employers.a

When completed the Wilshire Grand is projected to generate more than $23 million in annual tax revenue to the City of Los Angeles and have the capacity for more than 5,400 on-site permanent jobs.

aThis project is a great example of what happens when we all -- labor, government, business and the community -- work together to create jobs in Los Angeles. Everyone will benefit from this project," statedAustin Beutner, First Deputy Mayor and Chief Executive for Economic and Business Policy. "Thomas Properties and Korean Air are visionary corporate citizens who put the city and its citizens at the top of their priority list. Wilshire Grand is a great example of first-rate planning and first-rate attention to those who will be working here.a

Los Angeles has been the center of Korean Aira™s operations in North and South America since its first transpacific flight in 1972. The airline is now the largest transpacific carrier out of LAX and serves Los Angeles with about 100 international passenger and cargo flights each week.

aLos Angeles is our U.S. headquarters and we are committed to this great city and its future,a said Y.H. Cho, Korean Aira™s Chairman and CEO. aWe are excited about this project and look forward to starting construction once all approvals are granted.a

About Korean Air: Korean Air is a subsidiary of the Hanjin Group, one of the worlda™s largest logistics companies. The airline, with a fleet of 132 aircraft, is one of the world's top 20 airlines, and operates almost 400 passenger flights per day to 114 cities in 39 countries. It is the largest Asian airline in America and flies from more cities in the Americas to more cities in Asia than any other airline. It is a founding member of the Sky Team alliance that, with its 13 members, offers almost 400 million annual passengers a worldwide system of more than 13,000 daily flights covering 898 destinations in 169 countries. More on Korean Air's programs, routes, frequency and partners is available at [ www.koreanair.com ].

About Thomas Properties Group

Thomas Properties Group, Inc., based in Los Angeles, is a full-service real estate company that owns, acquires, develops and manages primarily office, as well as mixed-use and residential properties on a nationwide basis. The companya™s primary areas of focus are the acquisition and ownership of premier properties, both on a consolidated basis and through its strategic joint ventures, property development and redevelopment, and property management activities. The company seeks to capitalize on opportunities for above-average risk-adjusted investment returns from real estate ownership, while managing the volatility associated with the real estate industry through joint-venture ownership structures. For more information on Thomas Properties Group, Inc., visit [ www.tpgre.com ]

Forward-Looking Statements:

Statements made in this press release that are not historical may contain forward-looking statements. Although TPGI believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, these statements are subject to numerous risks and uncertainties. Factors that could cause actual results to differ materially from TPGI's expectations include actual and perceived trends in various national and economic conditions that affect global and regional markets for commercial real estate services including interest rates, the availability of credit and equity investors to finance commercial real estate transactions, their ability to enter into or renew leases at favorable rates, which can be impacted by the financial condition of their tenants, risks associated with the success of their development and property redevelopment projects, general volatility in the securities and credit markets, and the impact of tax laws affecting real estate. For a discussion of some of the factors that may cause results to differ from management's expectations, see the information under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations - Factors That May Influence Future Results of Operations" in TPGI's Form 10-K for the year ended December 31, 2009 and in TPGI's quarterly reports on Form 10-Q for 2010, which are filed with the SEC. TPGI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.