The Housing Chronicles Blog: Goodbye Century Plaza Hotel?

Thursday, December 18, 2008

Goodbye Century Plaza Hotel?

Developer Michael Rosenfeld, who bought the 1960s era Century Plaza Hotel earlier this year for $366.5 million in May, is now proposing to knock it down in order to replace it with a $2 billion, mixed-use project headlined by twin 50-story towers encompassing condos, offices, retail space and a smaller but high-end luxury hotel. So what do locals think, and what are his chances of getting this built? From an L.A. Times story:

The new owner of the Century Plaza hotel has revealed bold plans to demolish the renowned facility and replace it with two sleek skyscrapers containing condominiums, stores, offices and a smaller luxury hotel.

The Century City proposal comes during a crushing downturn in both the commercial and residential real estate markets. And the $2-billion plan, which has yet to make its way through the grueling city approval process, is sure to alarm many Westside residents, who say the area is already too crowded...

The proposal by Los Angeles developer Michael Rosenfeld, who bought the property for $366.5 million in May, calls for razing the 19-story arc-shaped hotel on Avenue of the Stars and erecting two 50-story towers in its place. At 600 feet, they would be the tallest buildings in Century City and among the tallest in the region, with 293 condominiums, 100,000 square feet of office space, 106,000 square feet of retail space and a 240-room luxury hotel...

The proposal won praise Wednesday from Los Angeles Mayor Antonio Villaraigosa, who through a spokesman said it could "transform an aging hotel into an iconic destination and a state-of-the-art, mixed-use development in the heart of our Westside."

But the development is certain to face scrutiny from neighbors worried that the Westside is becoming overbuilt. Traffic is already a nightmare much of the time, and city resources such as water and emergency services are stretched to their limits.

Some opponents signaled that they would fight to protect the existing hotel.

"We're seeing an assault on the '60s," said Linda Dishman, executive director of the Los Angeles Conservancy and one of several preservationists who increasingly are focusing their efforts on structures from the 1960s imperiled by new development. "If you look at Los Angeles in the '60s, the Century Plaza was one of the most significant projects," she said.

Rosenfeld faces the worst climate for real estate since the early 1990s.

The D.E. Shaw Group, Rosenfeld's financial partner in acquiring the hotel, will back the new development, said Francis Cappello, a senior vice president at D.E. Shaw, an international investment firm.

But the firm is among large Wall Street hedge funds caught up in the scandal around the $50-billion fraudulent investment scheme allegedly run by former Nasdaq chief Bernard Madoff, and has stopped redemptions of some of its funds. Cappello could not be reached for comment late Wednesday, but Rosenfeld said the firm's real estate fund was not one of the affected funds. "This is wholly unrelated," he said...

Rosenfeld has a strong track record in large-scale projects. His real estate investment company, Woodridge Capital Partners, has substantial hotel, residential and office assets in the U.S. and Canada, including a 3.5-million-square-foot, mixed-use project being developed in Calgary. Last year he sold the luxury Carlyle condominium tower under construction on Wilshire Boulevard near Westwood for almost $150 million.

By the time the new Century Plaza project is completed in 2015, Rosenfeld said, the economy is likely to have turned around. "This is a great opportunity to plan for the future," he said.

Click here for full story.

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