Four years and $615 million after getting the green light from the city, a massive Hollywood project mixing retail, entertainment and dining is nearing completion and other projects waiting in the wings rest on its fate.
At the corner of Hollywood Boulevard and Highland Avenue, TrizecHahn Development Corp.’s Hollywood & Highland is a 645,000-square-foot kick in the pants for a neighborhood that has needed something to show it the way back.
History:
Once the physical and symbolic heart of the entertainment industry and playground of the stars, Hollywood lost the studios and, subsequently, its luster.
The neighborhood has been trying to regain some of its lost sparkle for several years. Walt Disney Co. restored the El Capitan Theatre, but earlier attempts to remake other properties met with community opposition or lack of money. Many credit former city Councilwoman Jackie Goldberg in helping create the Hollywood Entertainment District Property Owners Association, which served as a turning point for the comeback. The association, a business improvement district, has done wonders for street cleanliness, safety and organization. The renewed attitude means renewed interest from investors, developers and entrepreneurs.
Concept:
The Los Angeles Community Redevelopment Agency picked TrizecHahn in March 1997 to erect a monument to Hollywood’s revival adjacent to Mann’s Chinese Theater. Hollywood & Highland would be an entertainment-oriented development to include the 180,000-square-foot Kodak Theatre, the new home of the Academy Awards. There also will be a 2,000-seat six-plex movie theater and a 40,000-square-foot ballroom, catered by Wolfgang Puck.
A 640-room, 600,000 square foot Renaissance Hollywood Hotel, operated by Marriott International Inc., is scheduled to open later this year.
Slated to open in November, it is not your typical mall. The structure will have an entertainment news ticker wrapping around the corner at its namesake intersection and an arch framing the famous Hollywood sign to the north.
Financing:
Initially targeted at $385 million, the price tag has climbed. With the addition of the $175 million Renaissance Hotel and increased costs, the total cost is now at $615 million, according to David Malmuth, senior vice president at TrizecHahn Development Corp. Financing for the project includes $100 million from the Los Angeles Community Redevelopment Agency for a parking facility, a $150 million loan and $190 million in equity. TrizecHahn already has announced plans to sell the property in the next couple of years.
Pros and cons:
The developer reportedly had to make serious concessions on tenant improvements and kick-out clauses to lure the tenants. TrizecHahn officials denied they had to do anything unusual to secure tenants and claim that rent rates are well above market for Hollywood.
By building atop a Metropolitan Transportation Authority subway station, the developer could be lessening the impact of increased traffic in an overly congested area. The subway could take some cars off the street and perhaps even alter the way Angelenos look at public transportation.
By shooting so high, said Larry Kosmont, a partner in the real estate consulting firm Kosmont Partners, TrizecHahn is betting that Hollywood is ready to return to glory.
Outlook:
The developer estimates up to $265 million in economic impact to be generated by Hollywood & Highland, including $7.7 million in new tax revenues to Los Angeles, $22 million in new spending in Hollywood and adjacent communities, and 2,430 permanent jobs.
“The climate changed dramatically after that project was announced,” said Leron Gubler, president and chief executive of the Hollywood Chamber of Commerce.
