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Old Posted Jun 1, 2005, 7:44 PM
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Location: Long Beach
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June 01, 2005

Background: Christopher A. Joseph & Associates prepared the environmental documentation for the Hollywood and Vine Project.

Lead Agency: City of Los Angeles
Project Applicant: Legacy Partners and City of Los Angeles

Daily News
June 1, 2005

Looking to add to the glitz and glamour of the restored Hollywood area, the Los Angeles City Council on Tuesday approved a $325 million public-private partnership to build a 296-room W Hotel as well as condominiums, apartments and retail space.

In its 13-0 vote, the council agreed to put $4.8 million of public funds into the project -- mostly for land acquisition costs in the Hollywood and Vine area. It is in addition to some $40 million already spent on various projects in Hollywood.

"People ask me, why we're doing this, what is the value to the city when we are already seeing good development," said Councilman Eric Garcetti, who represents the area.

"Well, the answer is that for a $40 million investment we have leveraged $1 billion in economic development. And that's more tax dollars into our coffers to hire police, to build parks, to provide services."

The Metropolitan Transportation Authority controls about 75 percent of the land needed to accommodate the project -- the MTA has a Red Line subway station at the intersection -- and the total public investment would be about $4.8 million, mostly for land acquisition, according to the city's Community Redevelopment Agency.

Legacy Partners would develop 350 apartments, including 74 units reserved for low-income renters.

Gatehouse Capital and its equity partner, HEI Hospitality Fund Acquisition, would build the W Hotel, a boutique chain owned by Starwood Hotel & Resorts Worldwide.

The only other W Hotel in the Los Angeles area is in Westwood. The brand is known for chic, modern rooms and amenities such as spas and personal trainers.

The city's past investments in Hollywood have had mixed success, with its biggest failure at the Hollywood and Highland Development, with the original developers selling out for a fraction of the initial cost, and the city losing money on its investment in a parking structure.

Garcetti said the city has learned from its mistakes and has done well overall with its participation in Hollywood.

Still, some owners of small businesses oppose the project, which would abut a $300 million mixed-used project planned by The Nederlander Organization.

Robert B. Blue, whose family trust owns the vintage 1929 Herman Building at 1642 N. Vine Street, said the development would kill his business, Bernard Luggage, at the same location since 1950.

"It is very hard for a business to stay in business after moving from a long-term, established location," he told the council.

"The developers for this project are big boys and girls and can perform the project on a smaller scale, or on the same scale, without taxpayer handouts and government assistance. Just follow the leads of the neighbor across the street, the Nederlander family."

Leron Gubler, head of the Hollywood Chamber of Commerce, defended the project.

"We believe this is a real win-win project for Hollywood and Los Angeles, a tremendous public-private opportunity," he said. "We're having a $325 million project with relatively low public investment. It will be the catalytic project for the Hollywood and Vine area."

(Excerpt copyright 2005 Daily News)
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