The W hotel and residential project in Hollywood keeps getting bigger, denser and costlier.
After the latest of many design revisions, developers have increased the number of apartments and condominiums in the project Hollywood’s largest mixed-use development in the works.
The project is now slated to have 375 apartments, up from the original 262, and 150 condos, up from 98. “The increasing scope of this project and the increasing costs provided an opportunity to increase the density,” said J.J. Abraham, vice president of development and acquisitions at Legacy Partners of Foster City. Legacy Partners, Gatehouse Capital Corp. of Dallas and HEI Hospitality of Norwalk, Conn., are the developers.
With the additional units, the price tag is estimated at $400 million, up from $327 million before the latest density spike. The initial cost estimate was $213 million.
The apartments and condos are just a part of the highly anticipated development, which takes up nearly five acres on the block bounded by Hollywood Boulevard on the north, Selma Avenue on the south, Argyle Avenue on the east and Vine Street on the west. The historic Taft Building, on the corner of Vine Street and Hollywood Boulevard, is the only existing structure on the block that will remain intact when the project is completed.
The development’s signature piece is a 300-room W hotel by Starwood Hotels & Resorts Worldwide Inc. that will face Hollywood Boulevard. The project includes 60,000 square feet of retail, including restaurants and retail stores that will line the ground floor.
So far, Abraham said the apartment and condo changes haven’t pushed back the construction schedule. Developers are expected to break ground in the third or fourth quarter of this year, in time to finish the project in 2008.
When the project was first proposed five years ago, government officials and local business owners prodded developers to beef up the residential units to reflect Hollywood’s urban growth. But now the area has several projects recently completed or under way, and the higher density raises concerns about traffic congestion and parking availability.
Among other projects: a mixed-use development on the southeast corner Selma Avenue and Vine Street that will include a Whole Foods store and a residential loft redo of the former Broadway Department Store site on Hollywood Boulevard and Vine Street.
L.A. City Councilman Eric Garcetti, who has called for environmentally responsible development that places housing near public transit, is lending his support to the W hotel and residential project, which will provide a bus layover facility and is close to the Hollywood/Vine Metro station.
To cope with the onslaught of cars, developers are building large parking lots with their projects. At the W project, the number of parking spaces has increased to 1,400 from 1,200, and additional lots are being built nearby.
Still, officials at the city’s Department of Transportation have brought up the issue of traffic along Vine Street and Hollywood Boulevard. At a recent zoning hearing on the W project, it was suggested that turn lanes be added to ease traffic problems. However, new lanes are a long shot because they could impact the historic Hollywood Walk of Fame.
Moving Forward
Despite the concerns, developers, redevelopment officials and the chamber are confident that the project won’t need any more substantial alterations. Abraham said the density increase was within the purview of approved project plans and shouldn’t affect the project getting its final permit to build. “The changes have been very well received by the (city) agencies,” he said.
Isabel Rivero, a manager at the Community Redevelopment Agency, said the CRA has worked with developers to make sure that the revisions are appropriate. “It has been a logical progression from what we approved initially,” she said.
But there is at least one large impediment remaining: ridding the site of its current property owners. Developers have to strike deals with them to acquire properties, or tap the CRA to use its power of eminent domain to force a sale before construction begins. Eminent domain allows government agencies to require the owners to sell their property for the projects with public benefits.
Four property owners control about 25 percent of the site, with the Metropolitan Transportation Authority owning the remaining 75 percent. Helmi Hisserich, the CRA’s Hollywood administrator, said deals have been struck with two out of the four owners, but Abraham said the holdouts are proving a tough sell.
Developers have until next March to make a deposit of $9.6 million to the city to gain access to at least $4.8 million of CRA funds for acquisitions, and Hisserich said she expected the deposit shortly. The CRA’s contribution is capped at $6.5 million.
Some of the site’s current property owners and tenants have complained that they have been told little of the project’s plans and have been in limbo while construction details are being hashed out. They’ve been critical of the city for siding with big developers over smaller, local businesses that stayed in Hollywood during bleak periods.
To finally clear the way for the W project development, the CRA may rely on eminent domain, something that Hisserich said would only be a last resort. In anticipation of that possibility, though, the City Council renewed the CRA’s ability to use eminent domain after that power had lapsed from 1998 to 2003.
Eminent domain has been used twice before in Hollywood: With a dilapidated property on Hollywood Boulevard and Western Avenue that was turned into affordable housing, and with the Egyptian Theater, also on Hollywood Boulevard. Typically, eminent domain is a bargaining chip to bring property owners to the negotiating table and isn’t often invoked.
“Obviously, it would be in everyone’s interest to resolve it amicably,” said Leron Gubler, president of the Hollywood Chamber of Commerce, which backed the project from the start. “It is the critical center of Hollywood there,” he said.
