L.A. City Council gives OK to long-stalled Hollywood office project [Updated]

The Los Angeles City Council on Wednesday approved a major new Hollywood office project after years of delay and controversy centering on dueling land appraisals, the ability of the developer to deliver and the future of a popular burger stand on the site.

With council President Eric Garcetti championing the plan, the council voted to approve the 1601 N. Vine Office Project, to be constructed at Vine Street and Selma Avenue, in the heart of Hollywood, next to the Ricardo Montalban Theatre. The names of movie stars who are part of the Hollywood Walk of Fame are embedded the sidewalk in front the lot of where the building is to go up.

Garcetti labeled the project the “best chance to build some Class A office space that Hollywood has seen in 25 years.” He and other supporters decried a lack of quality office buildings in the historic entertainment district.

[Corrected, 10:04 p.m.: An earlier version of this post incorrectly quoted Garcetti as saying this was the “best chance to build some Class A office space that Hollywood hasn’t seen in 25 years.”]

The eight-story project will cost $60 million, Hal Katersky, the Santa Monica-based developer, told the council. Katersky said he hoped to break ground in the fall.

Several union officials also praised the project for the jobs it will create during the roughly two years of construction.

During debate on the project, Katersky defended his ability to construct a first-class structure amid reports of lawsuits, financial problems and runaway production surrounding his business, Pacifica Ventures. Katersky’s attorney, William Delvac, called the council action “a big step forward in a long process in creating a very important project.”

Garcetti said his doubts about the plan had been allayed, but he pledged that the project would be “aggressively scrutinized.”

The blueprint dates from 2006, when the city's redevelopment agency moved to purchase the land for $5.45 million. But officials later learned of a second appraisal that put the value at $4.07 million. The differing appraisals continue to raise questions about the conduct of redevelopment officials.

Further fanning doubts is the fact that the plan calls for the parcel to be sold back to the developer for $825,000, more than $4 million less than the redevelopment agency paid for it. Katersky says he has already invested more than $4 million for design, architecture, legal fees and other costs.

On Wednesday, Garcetti said he was convinced that the city paid a “defensible” price for the land, despite the two appraisals.

The site is mostly a vacant lot, but one tenant is a busy hamburger stand. Molly’s Charbroiler, a 20-stool eatery, has become a neighborhood fixture but would be demolished under project plans.

As part of the agreement, Molly’s owners will receive about $1.1 million in compensation, including $700,000 from the developer and $400,000 from the city redevelopment authorities.

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Taking a burger stand

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-- Patrick J. McDonnell at Los Angeles City Hall

Comments

[kuruc]

redevelopment agency? wasting taxpayers money again! the unions are happy.

[gnomic]

This project is the poster child for governor Brown's plan to cut off redevelopment agencies. Buy private property for $5 million, sell to private developer for $825k, pay off private owner $400k. All so we can have a private office building in Hollywood.

[dangermouse]

God knows - government workers need yet another piece of real estate to eat donuts in.

[Scott Zwartz]

Since Garcetti says that no one knows what happened in 2006 (yeah right !), His field deputy Allison Becker was in on the deal and then she transferred to the CRA where she still worked on 1610 N Vine and she still works for CRA. Thus, it is another lie that everyone is gone.

The target of a criminal probe will not be Katersky but Garcetti. It turns out that Katersky did not put up one cent of his own money. He was a mere conduit. Garcetti knows that katersky lied when he said all his litigation. The court records to prove the falsehood have been provided to the City and the CRA, but Garcetti conveniently omitted that information when addressing the council.

Although his Daddy is the ex-DA, the real question is how far will Obama go in restraining the FBI and the US Justice Department. Oh well, there still is hyper-partisan Bill O to take a stab at it.

[Rick Abrams]

One problem with the CRA is that its drive away decent projects. When the CRA is throwing around hundreds of millions of dollars, developers flock to the CRA. In way it is hard to blame them.

Suppose you want to build something in Hollywood. You could ignore Garcetti and the CRA and go nowhere.

Or you could stop by Garcetti's office or meet in a dark alley and you'll get a few extra million for your effort. Of course, the CRA will take over and you'll have a project that is 300% over budget like Hollywood-Highland. $625 M to construct, then sold to CIM Group for $201 M plus a Friend of Garcetti bonus of $30 M to rehab the new Kodak Theater.

Without the CRA, decent projects would be built and they would then add to the property tax base for the city so we would not have to close fires stations and libraries.

1601 N Vine highlight how corrupt the city has become. Abolish the CRA!