Sam Nazarian is learning the hard way that the path to becoming a nightclub magnate in Los Angeles isn't all glitter and glam.
The budding nightlife entrepreneur's company, SBE Entertainment Inc., is attempting to weave together a network of flashy restaurants, swanky clubs and hotels across L.A. County most styled by renowned designer Philippe Starck.
However, Hollywood, of all places, may be jeopardizing that vision. The community, which has been revitalized by nightclubs, is giving Nazarian's company its fiercest resistance yet to a $10 million, three-story nightclub at 6363 Hollywood Blvd. called Shelter II.
Nazarian's company directed all calls to Reza Roohi, president of SBE's restaurant subsidiary, who acknowledged that the firm had never witnessed such resistance.
"Everybody is opposing it," said Roohi, who was locked in meetings last week drumming up support for the project. "Everybody is going crazy."
The opposition will come to a head Tuesday when the Hollywood zoning administrator holds a critical hearing, with interests ranging from other club owners to some prominent property owners and neighborhood activists planning to testify against it. The project can't move forward without approval, though any decision will likely be appealed.
Opponents complain Hollywood can't sustain another nightclub. At 2 a.m., when the nightclubs and bars close, the main thoroughfares come to a standstill as 30,000 to 40,000 people try to leave the area simultaneously and rowdy sometimes inebriated club goers strain the police force.
"This isn't about Sam Nazarian; it's clubs in general," said Chris Breed, an L.A. nightlife veteran who owns the Hollywood club White Lotus. "There's an overabundance of them and Sam has come in too late."
However, Nazarian isn't without his supporters. Council President Eric Garcetti, whose 13th District includes the proposed site of the nightclub, favors the project.
Garcetti spokesman Josh Kamensky said SBE has cleared every hurdle the council office had set for the project. That includes securing parking, opening a restaurant for lunch and dinner and including a daytime community art program.
"He has been very responsive," Kamensky said. "The Nazarian proposal is an interesting project and we have worked closely with him and set high thresholds that the developer has met along the way."
The new crop of high-end nightclubs was a welcome site a decade ago in Hollywood. The establishments attracted crowds and celebrities to a long-neglected community that was starved for investment.
The clubs installed security and better lighting around their properties, which by many accounts contributed toward making the area a safer nighttime destination.
However, the clubs have also exacerbated Hollywood's challenges, according to Officer Michael Rose, who works Hollywood vice and is the station's alcohol beverage control coordinator. The nightclubs have led to increased instances of public intoxication, fighting, aggravated assaults, date rape and driving under the influence, he said.
"The nightclub owners realize they've created the boom and they've created the monster," Rose said. "If we plan to keep all our interests afloat, they have to help slay the beast and deal with these problems."
There are 430 state issued alcohol permits in Hollywood and 80 permits in the blocks between La Brea Avenue and Gower Street, and Yucca Street and Selma Avenue, according to Rose.
As alcohol-related problems began to rise, the number of alcohol permits issued by the California Alcohol Control Board has been restricted to restaurants as local officials have put their foot down. Last month a San Diego nightclub owner failed to get approval for a venue at the former Frederick's of Hollywood flagship store.
Still, SBE believes it will be able to get a permit. As of last Thursday, despite Rose's concerns, the Los Angeles Police Department hadn't yet taken a position on whether to support or oppose SBE's plans.
Parking is another divisive issue. Most lots have exclusive agreements with three or four venues to provide parking spaces. "If the lots try to fulfill those contracts, they would be operating at 400 percent capacity," Rose said.
But Roohi said SBE has satisfied its parking requirements and has an exclusive lease for 180 spaces in a parking lot on Vine Street just north of Hollywood Boulevard 20 more spots than it is required to provide.
Other clubs can continue using the lot until Shelter II opens in roughly a year, but then those clubs would be displaced, Roohi said. SBE also has pledged to support the Holly Trolley, a bus service designed to get club goers around Hollywood without having to move their cars.
"We have more than enough parking," he said. "We have done everything that's been asked of us."
Rose isn't so sure. Nazarian's club will be allowed to hold 1,400 people, and on a busy night, Rose believes the destination could add roughly 700 cars to the area. "You don't see too many cars with more than two people in them," he said.
Meanwhile, Breed and others argue it's unfair that SBE is taking over the parking spaces of clubs that had been open longer and taken early risks on Hollywood. Club owners have been labeling SBE the "Wal-Mart of nightclub operators," because they believe Shelter II is so large it would put smaller clubs out of business.
Elizabeth Peterson, owner of a Hollywood land use consulting firm, said in order to not displace existing venues, any new nightclub should have to build its own parking. "You can't just displace other venues," Peterson said. "That's going to make a bad situation worse."
Nazarian's Hollywood club is destined to make a stir.
SBE, which signed a 30-year lease with the property's owners, has already spent millions of dollars on designing and engineering the nightclub.
The club would convert a one-story, wood-frame store into a steel reinforced two-story nightclub, where the rooftop would be outfitted with a restaurant and a bar. Broad storefront windows would contain elaborate displays that will change seasonally.
"Hollywood Boulevard during the day time looks like a ghost town," Roohi said. "We want to dress it up a little bit."
Not all nightlife venue owners are against SBE's proposal. Mike Malin, a principal in the Dolce Group, which owns hotspot restaurants Geisha House and Bella on Hollywood Boulevard, said he would like to see Nazarian prevail.
Malin said business only gets better every time a nightclub opens. Clubgoers come to Hollywood early to eat dinner before going dancing, he said. "The more nightclubs, the happier me and my partners are."
Still, Breed would like to see a moratorium on permits for nightclubs in Hollywood. He believes that would force out-of-area operators to buy existing clubs and therefore maintain a balance.
Roohi said the proposal is a farce aimed at forcing SBE to pay inflated prices for existing locations. He said several club owners who oppose SBE's plan have been offering to sell their venues to the company. "That seems to be a pretty clear conflict of interest," he said.
And if SBE doesn't get approval from the zoning administrator this week, Roohi said SBE could walk away from the project.
"It's crazy to see the investment we're putting forward and the problems we're running into with other people," he said. "It's getting to the point where I would recommend to my partners that if we're not wanted, then why waste our time and our $10 million investment."
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