Casden’s Troubles Throw Westwood Project Into Doubt

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Casden’s Troubles Throw Westwood Project Into Doubt

By DANNY KING

Staff Reporter

Now what?

That’s the question Westwood residents and real estate executives have been asking since last week’s announcement that developer Alan Casden was a target in an investigation into campaign finance wrongdoing.

Casden, through Casden Glendon LLC, wants to develop a long-fallow 4.25-acre Glendon Avenue site as a mixed-use development of 350 apartments and 115,000 square feet of retail space called Palazzo Westwood. The 528,000-square-foot project needs city approval to exceed the 370,000-square-foot maximum allowed under the site’s zoning overlay.

But the revelation of the investigation appears to have stopped those plans in their tracks, prolonging a redevelopment process already a decade in the making.

The prospect that the project, as conceived, could stall before the city council has other developers and real estate agents starting to circle the prime property.

One is Rick Caruso, chief executive of Caruso Affiliated Holdings. The developer of the Grove said he had bid unsuccessfully for the site in each of the two times it came available in the last decade and that he was still interested.

“I would love to do something in Westwood,” said Caruso. “If the project ends up on the market, I’d have to take a look at it.”

Developer Nansay Corp. USA had planned to build a hotel there before selling the site to investor Ira Smedra in 1995, who proposed a 450,000-square-foot retail and entertainment complex called Village Center Westwood.

That project faltered, and Smedra sold the site to Casden in early 2000. While no purchase price was disclosed, the 13 parcels making up the site were valued at a combined $19 million, or about $100 a foot, at the time of the sale, according to the county assessor’s office.

Last year, Apartment Investment and Management Co. completed its $1.1 billion purchase of Casden Properties. As part of the deal, Casden would develop Palazzo Westwood and sell it for at least $201 million to Aimco once it was 60 percent occupied, according to Aimco filings with the Securities and Exchange Commission.

Several limited liability corporations using the Glendon name are listed in Aimco’s March 10k filing as subsidiary companies. Aimco officials did not return calls.

Factoring a 370,000-square-foot development, the maximum allowed under current zoning, the property is easily worth the $201 million price tag, said Matthew May, president of May Realty Advisors. Even if the project were to be strictly residential, the 300 units that could be built within that square footage would justify the price.

“I could bring (Casden) an offer for that today,” said May. “Maybe I will.”

Further delays

It may be some time before the site hits the market. Casden, said spokeswoman Barbara Casey, has no plans to change the scope or pursuit of the project.

But with the announcement of the indictments, approval faced another political hurdle.

Councilman Jack Weiss, in whose district the property sits and who was a beneficiary of some of the political contributions alleged to have been raised illegally, last week came out publicly against the project. Weiss denied any knowledge of illegal contributions.

“It’s bad public policy and bad for the city for this project to be considered anymore,” he said. “Because of serious questions about its effect on the community, because of insufficient community outreach and, ultimately, because of the criminal indictments.”

Weiss is one of three members of the council’s planning and land use management committee, which has to approve the project before sending it on to the council as a whole for a vote.

While pleased Weiss had come out against the plan, representatives of two neighborhood groups questioned both the motive and timing of the opposition.

“Weiss’ turnaround is like a deathbed confession,” said Laura Lake, co-president of Save Westwood Village, which has opposed the project since its draft environmental impact report was completed in February 2002. The Los Angeles Department of City Planning is reviewing Palazzo Westwood’s final environmental impact report, which was completed in August.

Though Weiss’ first public comment against the project came after the indictments, the councilman sent a letter on Oct. 1 to both the planning department and Department of Transportation stating his concerns about traffic and density.

The letter came about five weeks after a widely reported search of Casden’s Beverly Hills offices by investigators from the district attorney’s office as part of a probe into campaign finance violations. That investigation started in August 2002, according to Jane Robison, a spokeswoman for the district attorney’s office.

Asked if he would support a smaller development proposed by Casden, Weiss said, “I’m not going to speculate on the hypothetical.”

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