Money talks in battle for hotel project
Beverly Hills being what it is, and the luxury hotel and condo market being what it is, spending more than $6 million to pass a city ballot initiative to secure approval for a major project would seem like a bargain.
Chump change, in fact, when weighed against the $700-million price tag on the project itself.
So one can imagine why developer Beny Alagem chose to bypass a prolonged, costly and possibly painful city planning review of his proposed recordbreaking 26-story condo tower and bring the project directly to the voters.
In doing so, however, Alagem has created a political maelstrom in Beverly Hills, while raising the prospect that developerfunded initiative campaigns will soon render obsolete the kind of professional municipal planning that keeps cities livable.
“This is not the way city planning should work,” laments David Abel, a Los Angeles land-use consultant and publisher of the Planning Report, a real estate development newsletter.
Measure HH, as Alagem’s initiative will appear on November’s city ballot, seeks voters’ approval of a major change to a redevelopment plan they narrowly approved in 2008 for the Beverly Hilton Hotel site at the corner of Wilshire and Santa Monica boulevards. At that time, Alagem, who owns the hotel and grounds, was proposing two condo towers of eight and 18 stories and a new luxury hotel adjacent to the Beverly Hilton.
The economic crash foiled those plans. When the Israeli-born Alagem, who made his fortune as founder of Packard Bell Electronics in the 1980s, revived the project, he decided to stack the condo towers one atop the other, creating a single 375-foot, 26-story tower. This would be twice the height of any other structure in Beverly Hills. But because it would occupy a spot on the edge of the city, just across Santa Monica Boulevard from development-mad Century City, it seemed compatible enough with its surroundings. (The luxury hotel envisioned in the original plan is scheduled to open as a Waldorf Astoria in March.)
Alagem says the combined tower will be less obtrusive than the original two-tower design, and allow
for the expansion of a 1.7acre publicly accessible garden on the premises. If Measure HH fails at the polls, Alagem still has the right to complete his original project and has hinted that he’ll proceed.
But he says “this is a much better plan, and I am going directly to the residents to let them make the decision.”
It doesn’t seem that way to an important neighbor, however. That’s One Beverly Hills, a hotel-condo complex proposed for a parcel just to the west on Santa Monica Boulevard, wedged between the Hilton property and the Los Angeles Country Club.
Its developer is Wanda Beverly Hills Properties, a subsidiary of China’s Wanda Group. The group is controlled by Wang Jianlin, the richest man in China and an entertainment industry investor whose footprint in Hollywood expanded with his acquisition of Legendary Entertainment, a studio for which he paid $3.5 billion earlier this year.
Alagem and Wanda are now locked in a pair of conflicts — one over the Hilton redevelopment itself, and the other focused on Measure HH. Wanda Beverly Hills launched the No on HH campaign in August with a contribution of $1.2 million. Its formal argument is that it’s unhealthy for the city to allow a project of the Hilton’s magnitude to go ahead without review by the Planning Commission or City Council or any public input.
The Wanda project, by contrast, was subjected to repeated public scrutiny — it received Planning Commission approval only on Wednesday, and now will go before the City Council. But Rohan a’Beckett, the deputy general manager of Wanda Beverly Hills, says his firm opposes HH “not because we’re at a disadvantage, but the city as a whole is at a disadvantage.”
Beverly Hills Mayor John Mirisch agrees, which has led to accusations that he favors the Wanda proposal as an alternative to Alagem’s. He says he’s “neutral” on the Wanda plan but objects to the Hilton plan both because it’s “out of scale for our community” and because Alagem is trying to circumvent city planners and mislead residents. “This is a skyscraper masquerading as an openspace initiative.” (Indeed, Alagem has dubbed Measure HH the “Beverly Hills Garden and Open Space Initiative.”)
The conflicts between the two development firms don’t overtly turn on whether local demand for luxury condo and hotel space is great enough to accommodate both; the developers agree that it is. Peaceful coexistence is a different question.
The two firms have been hectoring each other about the details of their plans ceaselessly. Alagem’s group complains that Wanda’s proposal would place a loading dock for One Beverly Hills directly across from the entryway for the Beverly Hilton, creating an eyesore and fostering traffic congestion on narrow Merv Griffin Way, a jointly owned thoroughfare that provides access to both properties. Meanwhile, A’Beckett fears the new Hilton tower will cast an ugly shadow over his property.
The transformation of the Hilton project from a redevelopment proposal into the grist of a political campaign leaves voters hopelessly bereft of hard information to judge whether it belongs in their city at all. Anyone trying to determine what the 375-foot tower even would look like will have to make do with fantasy.
The website promoting Measure HH mostly depicts a lush park adjoining the existing Beverly Hilton, with a rendering of the 26-story tower visible only fleetingly in the distance in a promotional video. Wanda filled the vacuum for its No on HH site with its own imaginative rendering, which manages to make the Hilton tower resemble a prison block under the Stalin regime. Wanda’s depiction, according to Alagem spokeswoman Marie Garvey, is “not based on our architect’s drawings or facts.”
The debate over the ballot measure has veered far away from land-use issues. The union representing workers at the Hilton, Unite Here Local 11, alleged in a complaint to the state Fair Political Practices Commission that Wanda’s $1.2-million war chest originated in China but was laundered as a loan from a Wanda subsidiary in Chicago. That would make it an illegal foreign political contribution. The FPPC blew off the complaint as unsubstantiated.
Spending on the ballot measure may well blow through Beverly Hills records, however. The Yes on HH committee’s spending, which is fueled by contributions from Alagem and his development partner, Oasis West Realty, already has reached $6.4 million — all that to persuade at most 22,000 registered voters, of whom fewer than 8,000 or 9,000 typically turn out for municipal elections.
Measure HH appears to be unprecedented in Beverly Hills history, say local authorities: It’s the first time voters will be asked to OK a project that wasn’t fully vetted first by the Planning Commission and City Council. Other proposals, including Alagem’s 2008 plan, have gone to the voters, but as referendums on decisions the City Council already had made rather than initiatives.
It’s a big step to take the city Planning Commission and City Council out of the loop, as Measure HH would do. Alagem says administrative scrutiny isn’t necessary for a project he claims is a barely perceptible alteration of the original plan. But if he gets his way, another blow will be struck against the very concept of professional land-use planning in every city, not just Beverly Hills.
“This all takes place in the vacuum of city leadership and the lack of support for the function of coherent city planning,” Abel says.
Mirisch says the state Legislature should outlaw initiatives on development proposals unless local planning officials and city council members have weighed in first. He’s right.
The less that planning departments are given to do, the more they will shrivel away. Billion-dollar real estate projects will rise or fall based only on whether proponents have enough cash to spend on campaigns and more skill at bamboozling the public. The developers will almost always win, and sooner or later, the voters will be sorry.