A new player is trying to develop a prime stretch of Wilshire Boulevard in Beverly Hills that’s been vacant for 30 years.
Legacy Partners Inc. has filed plans with the city to build a six-story mixed-use complex at 9200 Wilshire Blvd., between Maple and Palm drives. The complex would have 53 condominiums above 14,000 square feet of shops and three levels of underground parking.
Before filing its plans, the Foster City-based company appeased homeowner groups by making alterations, such as minimizing traffic on surrounding side streets, moving loading docks inside to reduce noise and putting a swimming pool on top of the building, where it won’t be visible from the street.
Even so, the project would be 60-feet high, requiring special permission from the City Council to break Beverly Hills’ 45-foot height cap.
City officials say they have two concerns. First, Beverly Hills is in the midst of rewriting its planning and zoning codes to take into account the influx of mixed-use developments. Officials also worry that the city could lose a valuable revenue stream. The parcel is zoned for an office building and would generate business license fees.
“We have to decide what the city wants to do with the economic component,” said attorney Mark Eggerman, a former Beverly Hills councilman and mayor. “With residential, there’s no business license fees, and then for the housing component, do we want to incentive-ize condos or apartments or a combination of both?”
To address those concerns, Legacy hired Wald Realty Advisors for a study on the economic consequences and found that its project would have a comparable impact to an office building.
The Wald study found that the annual revenue to Beverly Hills would be $352,500, while an office building with the same retail space would generate $329,200. An office building with the maximum allowable retail space would annually generate $386,100.
Unlike a commercial project, the Legacy development would result in residential construction fees of $225,000, plus school district fees and a dwelling unit tax of $72,000.
J.J. Abraham, a Legacy vice president, said that while Beverly Hills has some of the strongest office rents in Los Angeles County, they are still not high enough to make the cost of building pencil out. Meanwhile, he said Legacy can afford to hold the property for only so long before it too would have to sell.
“We need to have our entitlements and start construction by the end of the year,” he said.
The site, along the stretch of Wilshire Boulevard west of Doheny Drive, was once owned by radio broadcasting mogul Willet Brown.
In 1999 the land was sold to a developer with plans to build a 133-room hotel. The project won council approval, despite objections of neighbors concerned about traffic, but plans were withdrawn when investors failed to back new hotels after the 9/11 terrorist attacks.
The site was sold again in June 2003 to a British firm that proposed building a Mercedes dealership. The city rejected those plans and the site was sold to Legacy last May for more than $13 million.
Legacy is going before the City Council at the end of April for permission to begin its environmental impact report, a process that could take six months.
Amy Perrone, a 16-year Maple Drive resident, said for the most part neighbors of the Legacy site approve of the project and have been appreciative of the developer’s attention to their concerns. “Some people are bothered by one thing or another but I think we see it as a smart development,” said Perrone, who led neighbors against previous proposals for the site.
Rock On
MTV has renewed and expanded operations at its West Coast headquarters on the eastern border of Santa Monica at 2600 Colorado Ave.
The company inked a roughly 10-year lease for 130,000 square feet that at current Santa Monica market rents of $3 a foot would be worth $46.8 million, according to sources familiar with the transaction.
Rick Buckley, a partner at brokerage firm Madison Partners who represented the building’s owner, Prudential Real Estate Investors, confirmed that the lease had been signed but declined to comment further.
Sources said the Viacom Inc.-owned cable channel expanded its space in the building by about 25,000 square feet. MTV now accounts for nearly half the 300,000 square feet in the property.
Madison Partners principal Hunt Barnett co-represented the landlord along with Buckley. Cushman & Wakefield Inc.’s Brad Feld represented Viacom/MTV.
Koreatown Sale
A group of investors led by David Chang is buying a 2.5-acre surface lot on Wilshire Boulevard, across from Lafayette Park, with plans to build a 22-story tower.
Chang’s group, incorporated as Wil-Tower LLC, paid $11.3 million for the lot near the corner of Wilshire Boulevard and Hoover Street.
The parcel is now a location for Midway Car Rental. The seller, Taiwan-based Right Hero Industries USA, took a $3.7 million loss on the property, which it bought in 1991.
The building would include retail and possibly a movie theater on the ground floor with condominiums rising above.
The developers will need city approvals and will also have to contend with naturally occurring oil seepage. Like many Wilshire Boulevard buildings east of Fairfax Avenue, underground pumps would be needed to collect the crude.
“You can drive by today and see it,” said Matthew Artukovich, a senior vice president with Lee & Associates, who represented the seller along with colleagues Mollie Dietsch and Anita Artukovich. “The oil below it is just bubbling out of the ground.”
Chang’s group was represented by Campbell and Jack Cline, also of Lee & Associates.
Warner Wrapped
RREFF is cornering the Warner Center.
LNR Property Corp. has sold the third phase of its LNR Warner Center to the German fund manager for $105 million, according to sources close to the deal. The transaction follows on the heels of RREEF buying the LNR Warner Center phases one and two in January for $155 million.
RREEF is buying the two-office building development, a 130,000-square-foot building at 5700 Canoga Blvd. and a 260,000-square-foot building at 21301 Burbank Blvd.
The deal, which works out to about $291 a foot, was expected to close late last week. The building wasn’t listed on the market and the transaction was brokered by CB Richard Ellis Inc.
The deal was first reported by trade publication Real Estate Alert.
Staff reporter Andy Fixmer can be reached by phone at (323) 549-5225, ext. 263, or by e-mail at
[email protected]
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